The year continues where it left off with a plunging oil price causing all sorts of economic tensions for oil producers and benefits for oil importers (although materialising more gradually). Terrorist attacks in Paris connected to the Islamic State conflict in Syria and Iraq caused shock and revulsion around the World.
I think Ineos should drill as many wells as possible across Scotland to develop the UK shale oil revolution. It’s self-sufficiency staring us in the face. It won’t be like the US boom and regulators and environmentalists can and will play their part. Luddites and statists should stop moaning and realise the opportunity- if they still harbour their dreams-a vibrant shale oil and gas sector along with North Sea and the West of Shetland oil fields, wind, solar and tidal projects elsewhere Scotland could be a powerful self-sufficient exporter of energy.
Where are we headed is the question?
Will oil be the issue of 2015 or Eurozone deflation?
There’s been some volatility in recent months for financial markets were the VIX index, referred to as the fear index for markets, showed larger peaks appearing as investor concerns rose over issues like the ending of QE in the US, weak Eurozone demand or Russian actions over the Ukraine and more over.
Will the Cradle of Civilisation Ever Recover its Illustrious Past: US Starts Bombing Iraq to Rid the Region of the Islamic State.
Once again the US Air Force has commenced a bombing campaign in Iraq. This time in support of the Kurdish Peshmerga forces fighting in north western Iraq against the Islamic State in Iraq and the Levant (now simply called IS). The RAF sent Tornado fighter bombers to conduct surveillance missions with a combat role now beginning.
According to Albert Einstein “Nationalism is an infantile disease; it’s the measles of mankind.” I couldn’t agree more.
The Scottish independence referendum 2014 has entered its final phase of campaigning with polling day on September 18th fast approaching.
How To Do It and How Not: Peaceful Separation or A Changed Union for The UK Opposed to Chaos in The Middle East and Despicable Actions in Ukraine.
The friendly Commonwealth Games are underway in Glasgow. The Test Series between former British colony and now Commonwealth partner India continues in Southampton in Hampshire. The Golf Open and Wimbledon Tennis Championships are already past. The UK is enjoying some pleasant summer weather along with economic growth and GDP finally back above 2008 levels (though not per capita).
Peace, Hope and Progress versus Strife, Despair and Calamity: Any Predictions How These Will Turn Out?
In June 2014, I attended the 105th AGM of the Scottish Mortgage Investment Trust PLC (SMT), a fund of nearly £3 Billion of assets spread around the world with a total return objective. It’s managed by Baillie Gifford (BG) here in Edinburgh. As a small shareholder it’s useful to meet who governs and directs one’s portfolio from time to time and I would recommend attending such events on occasions, being an active shareholder is something a private investor should enjoy and not just for the coffee and sandwiches. I happened to know one of the directors as he’s from where I grew up and another Professor John Kay is a regular columnist and worthwhile read in the Financial Times. The board are usually available after an AGM to pose a couple of questions over those cups of coffee I mentioned.
In my April blog I mention using the low interest rate environment for governments and their agencies to borrow cheaply to invest in infrastructure projects. Pension funds and life-assurance companies are also being encouraged, especially by UK Chancellor of the Exchequer George Osborne, to invest their cash in infrastructure projects to match their long term liabilities to policy holders with reliable cash-flows from projects lasting up to 30 years or more.
Since July 2013 the FTSE100, the leading UK share index, has ranged between 6400 and 6800 points. While the larger US S&P 500 index has moved from 1600 points up to record highs, closing above the 1850 level on several occasions, notably since January the S&P 500 has traded in a more sideways fashion. Perhaps this indicates a top in the market or a pause for good reason- reported earnings weaknesses or Fed tapering – however it’s still an impressive increase from the market lows during the 2007-2009 financial crisis. The bulls and bears react to positive or negative news and information which forms investor sentiment to drive the markets on their trajectories and so forth.
A crisis in the Crimea and growing volatility in the world’s markets – it’s been quite a 1st quarter for 2014.
Back in January it was hoped that global equities may repeat some of 2013 rally. However, the US Federal Reserve increasing tendency to taper remains firmly part of the US financial agenda. China property bubbles and debt defaults have started to concern investors. Yet so far the Chinese authorities have bailed out government entities and kept a lid on a more general panic in view of the vast quantities of property related-debt. Vladimir Putin put on a good show with the Sochi Winter Olympics, where some of his now sanctioned oligarchs made a few (billion) now devalued roubles, while plotting and executing a, relatively harmless welcomed by many, annexation of the Crimean Peninsula.