Food for thought this morning – two links:
- HSBC’s research warning that the monetary policies-based liquidity pyramid is shaky: http://finance.yahoo.com/news/hsbc-thinks-world-economy-titanic-120044852.html?soc_src=mediacontentstory&soc_trk=tw and that this time around, the shakes are systemic. Key point here: Central Banks are out of ammunition, while economy is not anywhere near being on solid footing.
- Meanwhile, MoneyWeek spots three bubbles (the UK-centric property bubble is not unique to London, but is present in a large number of economies, from Canada to Australia and beyond): http://moneyweek.com/three-bubbles-that-are-ready-to-pop/
Note, first link above cites low worker productivity. Here’s a slide from my recent (this week) presentation on same:
And here is my view on the Irish property bubble (in development, but not yet fully manifested):
What is interesting about the Irish property markets is that whilst price and activity levels are not yet at concern points, the rates of increases in commercial rents and declines in yields, and rates of rises in residential property prices in Dublin are clearly fuelling a massive hype by real estate agents and the media. This is hardly consistent with a ‘healthy’ market.
I will be speaking about the financial valuations bubbles, focusing on M&As and strategy for avoiding these, next week at http://rebel.alltech.com/ so stay tuned for slides on that next week.