News of the death of I.M.Pei the inspirational architect at the age of 102 late last night. At this time of US Sino stresses it is worth looking at the simply staggering array of work produced by Pei the son of a bank manager born in Canton(Guangzhou) China and who arrived in the USA where he was educated at Harvard and MIT before building his iconic career. A true collaboration.
As highlighted last month the 2018 Italian debt position is 132% of GDP which is due to rise to 133% this year and 135% next. This is in contravention of EU rules that insist that such a deficit must be reduced but Italy is going in the opposite direction. 10 year Italian Government Bonds now yield 2.75% versus that of Germany’s which yield….Minus 0.7%. Deputy PM Salvini has indicated that Italy  is ready to break those rules which calls into question the EU financial rules structure and hence the value of EUR. Markets have sold EUR while they watch the Italian government and the EU closely as to how they deal with this.
Saudi Arabia and the Oil Price
In the past 8 years the oil price has halved to $60 and this has resulted in Saudi Arabia borrowing $10billion in 2016 to meet their budget gap and reducing supply to even maintain the oil price even at this level. Last week we wrote that there is the prospect of a $15 oil price due to huge advances in the production of shale oil combined with a reduction in demand. Growth in the Kingdom is still at 2% but contrast that with the healthy 9% that the aspirational and growing and young population had become accustomed to. A new (huge) revenue source is required and quickly. The size of the Saudi economy makes the rest of the Gulf economies a relative side show so expect that region to feature heavily in the news in the next five years-and not in a good way.
Monet and Les Meules-Giant Haystacks
In 1986 it would have taken a brave heart to have written a cheque for $2.53 million for this painting. In 8 minutes and with a reserve price of $55 million, that savvy investment from the heart paid off with someone this week paying $110 million for this depiction of a stack of harvested wheat. In the 33 years that the previous owner of the painting enjoyed the painting-assuming it was not stored in a vault-as a US resident it might have been a matter of supreme indifference to them that at one time that $110 million was worth GBP 92 million and at another GBP 52 million. Quite a swing. For the rest of us 25 quid at myartprints.co.uk will buy you a nice poster of a similar looking Monet haystack!
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Eurozone That was a surprise: yesterday the EU announced that inflation had fallen to 2.4% which was considerably better than the 2.7% that markets had expected. Despite the ECB saying it was far too early to cut rates, the market has pencilled in the first cut for April. Before getting carried away it should be […]
Dutch Election What the Hard Right under Geert Wilders winning by the largest number of seats(37) means for Europe will become clear in the next months but for the Netherlands the composition of their new coalition government is expected to take a month and will likely comprise 4 or even 5 parties. This may or […]
British Pound Two days after the Autumn Budget Statement, the Pound is hanging in there and is looking firm. Why? Despite some attempts to talk it up on the grounds of the economy not in fact contracting, but merely marking time, the real reason is that while not being shouted from the rooftops, but definitely […]