Opinion

For the first time since 2002, the euro trades at parity with the dollar. In the summer of 2008, one euro was worth as much as 1.6 dollars. But with the eurozone on the front line in the war in Ukraine and the ECB simultaneously cautious about raising interest rates because of fragmentation risks, the euro seems to have only one way to go and that is down. The rapid decline of the euro is a harbinger of the next euro crisis. 

The ISM Manufacturing Index, also known as the purchasing managers› index, fell more than expected in June. The index dropped to 53 where a reading of 54.5 was expected. This was not really a surprise, as the regional sentiment indicators had already fallen significantly. 

In fact, they pointed to an ISM Manufacturing of only just above 50.

Fifteen years ago, I bought my first iPhone in Denver, Colorado. Not entirely coincidentally, I was on holiday in the US. I did not have to queue up, but walked into the Apple store in the afternoon. The iPhones with 4 and 8 Gb flash memory were sold out, but the one with 16 Gb was still for sale.

Dans le secteur financier luxembourgeois, «le nouvel Ucits» est un label informel mais largement reconnu, synonyme d’innovation et de changement prometteur. Elle fait référence au succès de la législation sur les investissements des années 1980, qui a offert un passeport européen aux fonds d’investissement Ucits, provoquant un boom de plusieurs décennies dans le secteur financier, faisant du Luxembourg le premier centre européen de fonds d’investissement et remplaçant l’industrie sidérurgique comme principal moteur économique du pays.

Daniel Kahneman et Amos Tversky (deux des psychologues les plus importants) ont apporté dans les années 70 d’importantes contributions à des théories économiques. Ils ont en effet montré que les individus (ou les investisseurs) manifestent face à une perte une réaction négative d’intensité plus forte que celle de la réaction positive provoquée par le gain correspondant. Autrement dit, ils n’accordent pas la même valeur à la perte de 50 euros qu’au bonheur d’en gagner 50.

German consumer confidence has fallen to its lowest level ever, it became clear last week. Never before have German consumers been so negative about the economy and their financial prospects. And Germany is not alone.

Far from it. In the United States, the United Kingdom and the Netherlands too, consumer confidence recently reached an all-time low. The extremely negative sentiment among consumers is a global phenomenon caused by another global phenomenon: extremely high inflation.

Dire que le premier semestre n’a pas été bon est l’euphémisme de l’année 2022 sur les marchés financiers. Mais qu’apportera le second semestre ? 

Le premier semestre 2022 a été le pire depuis 1970 pour le S&P, le pire depuis la bulle Internet de 2002 pour le Nasdaq et le pire depuis 2008 pour l’Eurostoxx 600.

More economic growth means more population growth, according to Thomas Malthus. The demographer and preacher believed that food production is linear and population growth exponential, and as such are the limits to growth. An overpopulated society leads to famines. Epidemics and wars were insufficient to control the growing population, according to Malthus.

The Atlanta Fed GDPNow real GDP forecast for the second quarter stands at exactly 0 percent. So no growth expected. Something economists certainly do not take into account.

The Atlanta Fed GDPNow forecast is a growth forecast based solely on published macro data during the quarter. This differs from the forecasts of most economists, who usually only give one number that may or may not be revised.

The Federal Reserve is doing something else than what it says it is doing. At last week’s FOMC meeting, Fed chief Jerome Powell said that “the committee is not trying to cause a recession”. Yet it is clear that the Fed is directly linking a recession to lower inflation risks and that the Fed does want to fight inflation.