Roger bootle presentation nma 2011

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  • Used Annual European Hotel as the template
  • Used Annual European Hotel as the template
  • Roger bootle presentation nma 2011

    1. 1. Economic Recovery or Relapse? The Implications for Investment By Roger Bootle
    2. 2. 1. World GDP (% y/y) (1966 – 2012) Sources: Maddisson, IMF, Capital Economics
    3. 3. Source: OECD 2. Spare Capacity (as a % of GDP, 2010)
    4. 4. 3. Capital Economics Emerging Markets GDP Forecasts (% y/y) – Year Average 2009 2010 2011 2012 China 9.1 10.3 9.3 9.0 India 7.0 9.0 8.0 8.5 Em. Asia ex. China & India 0.8 6.2 4.5 5.1 Em. Europe -6.0 4.2 4.5 2.0 LatAm -1.7 6.0 4.3 3.5
    5. 5. 4. GDP Per Capita as a % of US GDP Per Capita (Mkt. Exchange Rates, 2010) Sources: IMF, Capital Economics
    6. 6. 5. Capital Economics G7 GDP Forecasts (% y/y) – Year Average 2009 2010 2011 2012 US -2.6 2.9 2.0 2.0 Canada -2.5 3.2 2.7 1.5 Euro-zone -4.0 1.7 1.7 0.5 UK -4.9 1.4 1.0 1.5 Japan -6.3 4.0 -0.2 2.5
    7. 7. <ul><li>The effects of earlier policy stimulus are wearing off – and/or the stimulus is being reversed. </li></ul><ul><li>Consumer balance sheets are very stretched in the Anglo-Saxon countries. </li></ul><ul><li>The banks remain weak and reluctant to lend. </li></ul><ul><li>Global imbalances. </li></ul><ul><li>The rumbling financial crisis in the euro-zone. </li></ul><ul><li>The threat from higher commodity prices? </li></ul>6. Reasons to expect slow growth in the developed world
    8. 8. 7. Bank Lending (% y/y) (2000 - 2011) (Latest = Jul) Source: Thomson Datastream
    9. 9. 8. The Reluctant Spenders <ul><li>The oil producers – oil prices might fall. </li></ul><ul><li>China and emerging Asia – trade surpluses are the route to growth. </li></ul><ul><li>Germany and her close neighbours – surpluses are a sign of virtue: ‘if only the rest of the world could be like us’. </li></ul><ul><li>China and Germany are similar – ‘Chermany’ – a large trade surplus, an undervalued currency and weak consumption. </li></ul>
    10. 10. 9. Current Account Balance ($bn, 2010) Source: IMF
    11. 11. 10. OECD CPI (% y/y) (1971 – 2011) (Latest = June) Source: Thomson Datastream
    12. 12. Source: Capital Economics, IMF 11. Government Debt (% of GDP) (2011)
    13. 13. Source: ECB 12. Unit Labour Costs (1999 = 100)
    14. 14. Source: Thomson Datastream 13. Current Account Balance (as a % of GDP) (2010)
    15. 15. Source: Thomson Datastream 14. Real Consumer Spending (1999 - 2011) (1999 = 100) (Latest = Q2)
    16. 16. 15. The dimensions of the euro crisis <ul><li>High public indebtedness. </li></ul><ul><li>Lack of competitiveness in the peripheral countries. </li></ul><ul><li>Weak banking systems. </li></ul><ul><li>Property prices still too high. </li></ul><ul><li>The political impasse. </li></ul>
    17. 17. 16. UK Headline & Core CPI (2004 – 2013) (Latest = July) Sources: Thomson Datastream, Capital Economics
    18. 18. 17. Sterling Trade-Weighted Effective Exchange Rate (1990 – 2011) (Latest = 1 September) Sources: Thomson Datastream, Capital Economics
    19. 19. 18. £ vs. US$ and Euro (2007 – 2011) (Latest = 2 Sep) Sources: Thomson Datastream, Capital Economics
    20. 20. 19. Market Interest Rate Expectations (%) (2000 – 2012) (Latest = 17 May) Source: Bloomberg
    21. 21. 20. CE Interest Rate Expectations (%) (2008 – 2012) Sources: Bloomberg, Capital Economics
    22. 22. 21. Bank Rate and Market Expectations (%) Sources: Bloomberg, Thomson Datastream
    23. 23. Sources: Thomson Datastream, Capital Economics 22. UK Gilt Yields & Inflation (1990 – 2013) (Latest = 31 Aug)
    24. 24. Source: Thomson Datastream 23. S&P GSCI By Category (Jan. 2000 = 100)
    25. 25. Sources: Thomson Datastream, Capital Economics 24. Brent Crude ($ Per Barrel)
    26. 26. Sources: Thomson Datastream, Capital Economics 25. Gold ($ per oz, 2000-2013)
    27. 27. 26. All-Property Initial Yields and Equity Dividend Yields (%) (1994 -2012) (Latest = July) Sources: Thomson Datastream, IPD
    28. 28. 27. US PE Ratio (Earnings 10 Year Average, Real Terms) (1881 – 2011) (Latest = 2 Sep) Sources: Shiller, Capital Economics
    29. 29. 28. UK PE Ratio (Earnings 10 Year Average, Real Terms) (Datastream All Share) (1975 – 2011) (Latest = 1 Sep) Sources: Thomson Datastream
    30. 30. Economic Recovery or Relapse? The Implications for Investment By Roger Bootle

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