BROAD SPECTRUM

After the Anticipation, Disillusion. Government Plan Disappoints and Perturbs Simultaneously

The new mantra. Not universally admired.

Prime minister Boris Johnson addressed the nation, revealing the much vaunted ‘roadmap out of lockdown’. The anticipation encouraged by government sources ahead of the statement had created the perfect conditions for disappointment, which was duly delivered. An expected outcome for anyone who had considered the finely balanced options open to the government.

The Slow Fuse of Euro Destruction is Burning

Inherent Euro flaws can no longer be obscured

The German Constitutional Court (Verfassungsgericht) ruled the European Central Bank’s mass bond buying programme is in violation of German law (grundgesetz) and in breach of EU treaties. The ruling, made in Karlsruhe, Baden-Wurtemberg states that the ECB, in purchasing over €2.2 trillion of government bonds since 2015 has “manifestly” flouted EU treaty and exceeded its legal mandate. The court’s findings express a blatant rebuke to the ECJ and their ruling in support of the ECB asset purchase programme. Declaring the ECJ ‘ultra vires’ (acting beyond legal power or authority) is a clear reassertion of German national judicial supremacy.

Bank of England Prophesy Worst Economic Slump in 300 Years.

Bank Publishes Deeply Despondent Economic Forecast for 2020. Optimistic Predictions For Recovery Are Made Through A Glass Darkly

The UK economy will contract by 25% in the Second Quarter 2020 the Bank of England cautioned today, before staging a recovery “relatively rapidly” through the second half of the year, assuming lock down restrictions are significantly eased.

This equates to a decline in GDP of 14% year-on-year. A recovery of 15% in 2021 is optimistically conjectured, predicated on a central expectation of the economy returning to a sustainable form of normality.

Who Will Spearhead the Promised Recovery?

Marvelling as stock markets recover from their precipitous declines, swiftly regaining ‘Bull Market’ status, while reading prognostications of economic ‘bounce back’ and returning normality, one is overwhelmed by incredulity.

China Resorts to ‘Helicopter’ Shopping Vouchers

China’s economy shrank 6.8% in the first quarter of 2020, official data shows, the first such decline since at least 1992, when Chinese publication of GDP records began. The historic slump in the world’s second largest economy has prompted the government to issue free shopping vouchers, in an attempt to incentivise consumer spending.

Eurozone Fiscal Fault Lines

The vexed question of pan Eurozone bond issuance sits at the epicentre of the vainglorious Euro project. No currency area can function coherently or sustainably without a central treasury and the political unity this represents.

Long Shadows

The long shadows of the 2008 financial crisis have left the global economy uniquely ill prepared for the unfolding economic catastrophe. Sovereigns, corporates and individuals alike have been actively encouraged to gorge on cheap lending, prompting a decade of ever spiralling debt simultaneous to a collapse in cash reserves, to maintain the illusion of economic health.