The inverted yield curve – or why the American economy might be heading for a recession (followed by the world economy of course)

August 18th, 2019 by Roger Darlington

“Every recession of the last 60 years has been preceded by an inverted yield curve. The term is off-puttingly wonky but it just means investors see trouble ahead.

There’s some argument that the oracular power of inversions ain’t what it used to be thanks to the aggressive monetary policies that have been pursued by central banks around the world.

US treasury bonds are regarded as safe investments. Usually investors expect higher returns for tying their money up in long-term bonds than they do for short-term bonds. When long-term bonds offer lower interest rates than short-term ones, the yield curve has inverted.

This week yields on the 10-year treasuries fell below two-year yields for the first time since 2007. Looking at yield curves, the New York Fed now puts the probability of a recession by July 2020 at 31.5%– close to one in three.

But Gus Faucher, PNC bank’s chief economist, still sees inverted yields as “a very reliable indicator”. Faucher is betting on a slowdown rather than a recession next year but either way he argues inverted yield curves are bad news.”

Quote from today’s “Observer” newspaper

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Actor Jeff Daniels warns of the end of democracy in the United States

August 13th, 2019 by Roger Darlington

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A review of “Fast & Furious: Hobbs & Shaw”

August 11th, 2019 by Roger Darlington

Since the first film in 2001, the “Fast & Furious” series has become Universal’s biggest franchise, currently ranking as the tenth-highest-grossing film series of all time with a combined take of over $5 billion. Now I am not in the demographic at which these films is aimed, but this is the second time that I have allowed a younger friend to take me to a component of the franchise, this one the ninth but the first stand-alone spin-off.

This time eponymous American Luke Hobbs (the huge Dawyne ‘The Rock’ Johnson) and British Deckard Shaw (hard man Jason Statham) are reluctantly compelled to join forces to tackle a scientifically-enhanced villain called Brixton (Idris Elba), each of whom offers and receives considerable bodily violence in the midst of the franchise’s trademark feature of plentiful action sequences usually involving various modes of transport.

We’ve seen Hobbs and Shaw before but a newcomer is Shaw’s sister Hattie played delightfully by Vanessa Kirby and cameo performances come from the likes of Ryan Reynolds, Kevin Hart and Helen Mirren. The action is leavened with much humour and the funny lines continue in a whole series of scenes interspersed in the credits.

Just leave your brain at the door of the cinema and enjoy the ride.

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Interesting use of language

August 11th, 2019 by Roger Darlington

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UK becomes a nation of streamers… but traditional broadcast TV leads the way on UK content.

August 9th, 2019 by Roger Darlington

UAround half of all UK homes now subscribe to TV streaming services, according to a major Ofcom report revealing rapid shifts in the nation’s viewing habits.

Ofcom’s Media Nations report, a comprehensive study of major trends in UK television, radio and audio, published recently finds:

  • The number of UK households signed up to the most popular streaming platforms – Netflix, Amazon Prime Video, Now TV and Disney Life – increased from 11.2m (39%) in 2018 to 13.3m (47%) in 2019.
  • While traditional TV viewing continued to decline in 2018, the UK’s public service broadcasters – BBC, ITV, Channel 4, Channel 5 and S4C – showed more than 100 times more original, homegrown shows than the overseas streaming platforms.
  • Traditional viewing still accounts for most TV time (69% – or 3 hours 12 minutes, on average, per day), but this fell by nine minutes in 2017, and by 11 minutes last year.
  • Viewers now watch 50 minutes less traditional TV each day than in 2010. This shift is most pronounced among younger people (16-24s), whose viewing of traditional TV has halved in that time.

Posted in Cultural issues | Comments (2)

A review of the novel “China Dream” by Ma Jian

August 5th, 2019 by Roger Darlington

Ma Jian was born in the Chinese city of Qingdao in 1953, the same year as Xi Jinping who is now President of China without term limits. Both men were caught up in the horrific events of Mao’s Cultural Revolution which killed anything up to three miliion and ruined the lives of many millions more. Since 2012, Xi Jinping has used the phrase “the Chinese Dream” to describe “the great rejuvenation” of the nation. However, following the publication of his first book in 1987, Ma Jian has had all his work banned in China, where consequently he is unknown, and he now lives in exile in London.

The protagonist of this short and disturbing novel is Ma Daode, the director of the newly created China Dream Bureau, dedicated to ensuring that the Chinese Dream enters the brain of every resident of Ziyang City. Like so many Chinese officials, he is corrupt and a philanderer but working hard to reconcile his personal memories with the contemporary dominant political ideology. He would dearly like to forget the Cultural Revolution which caused the suicide of his parents but is hardly discussed in China today. 

His brainwave is to develop the China Dream Device, a microchip to be implanted into the brain of every citizen so that painful memories can be replaced by the thoughts of the political leadership. Since this is clearly going to take some time to design and his personality is already falling apart with ever-more frequent memories of the Cultural Revolution, he attempts to concoct something called Old Lady’s Dream Broth, a substance with revolting ingredients and dubious efficacy.

This Chinese version of “Brave New World” or “1984” is not going to end well for Ma Jian. But what about for Xi Jinping’s China? I’ve visited the country four times and travelled extensively within it and the simultaneous growth of both the economy and the repressive regime makes one wonder whether the dream might one day become something of a nightmare. 

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My Thought For The Week reaches 1,000

August 4th, 2019 by Roger Darlington

For the last 20 years, week in and week out, I have send out electronically a motivational thought to what is now a list of around 1,500 friends, colleagues and contacts.

It goes out each Sunday and this week’s thought is the 1,000th:

“Do we settle for the world as it is or do we work for the world as it should be?”

Barack Obama as quoted by Michelle Obama in her memoirs “Becoming”

If you would like to see previous Thoughts For The Week, you’ll find them all here.

If you would like to receive my Thought For The Week each Sunday, please e-mail me at:

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Ilhan Omar: so patient, so eloquent, so right

July 31st, 2019 by Roger Darlington

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What would really be involved in a no-deal Brexit and why we should be really worried

July 30th, 2019 by Roger Darlington

In the last few days, a whole bunch of new Cabinet ministers will have been briefed by civil servants on the consequences of a no-deal Brexit and the planning that will be required to mitigate these consequences. These Ministers will now know what a cabal of ex Cabinet Ministers have known for a long time – that a no-deal Brexit would be a enormous risk with consequences that will be terribly hard to manage.

The immediate threat would be to supply chains. A deadline of 31 October is about as bad as it could be: companies are already building up supplies ready for the Christmas market on top of earlier no-Brexit stockpiling and there just won’t be the transport and storage capacity for much more.

Cabinet has been briefed to have five priorities – in order:

  • Life-saving medicines
  • Key medical equipment
  • Fresh food
  • Nuclear power parts
  • Purification chemicals for water companies

After that, fuel and cash are critical components of the planning processes and these are interlinked. The banks need fuel to stock their cash machines and customers need cash to pay for fuel. Once petrol stations run out of supplies or people can’t pay for their fuel, we’re in trouble.

The new technology both helps and hinders the situation. On the one hand, many customers will be able to pay for fuel with credit or debit cards. On the other hand, any shortages – or, more likely, fear of shortages – will instantly be communicated and exaggerated through social media. That could lead to panic buying of fuel – or key foods – and in no time we could have queues and even riots which in turn will be spread all over social media.

At what point do hard-pressed and under-resourced police forces need the help of the military? These decisions cannot be left until panic hits the streets. It takes time to deploy troops and equipment and the timing and circumstances will be highly political considerations. So war-gaming is going on in Whitehall now and Ministers are being pressed for decisions now. Some 8,500 troops are on stand-by to intervene if there are transport blockages or civil unrest.

If the Cabinet gets this wrong and panic grips the nation, the Conservative Party will not be forgiven and will suffer an existential threat whenever the next round of elections comes round.

So what’s going to happen?

If Boris Johnson cannot negotiate a materially better exit deal with the other 27 Members States of the European Union (as seems very likely) and if Parliament makes good on its intention to block a no-deal Brexit (which also seems likely), Boris may well go for a General Election and, from a timing point of view, his options are distinctly limited because of the 31 October deadline and the turning back of the clocks on 27 October. A favoured date could well be 24 October.

Alternatively, Boris could bow to the inevitable and seek a further extension of EU membership under Article 50 in spite of his “do or die” promise.

In any event, it’s going to be a rough ride. Fasten your safety belts!

Posted in British current affairs | Comments (2)

There are still some Americans who think that President Trump is not racist …

July 29th, 2019 by Roger Darlington

They should watch this short clip from Victor Blackwell of CNN – until the end …

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