See my Globe and Mail Economy Lab post here
I’d like to think I am ahead of the trends, but on this one maybe I’m not: I have a new book coming out in January, and I will be self-publishing it. I’m on my own – and I like it so far.
This book is titled Economorphics: The Trends Changing Today into Tomorrow, and it will be my third. Thefirst two were put out by ‘real’ publishing companies, and it was an okay process. They had editors, they had distribution, they had tables where I sat for meetings and felt excited to be part of a new project. I didn’t stomp away saying I hated everything about those companies, and if one were to wave an offer in my face today, I’d probably consider it. But it is unlikely that one will, not without a whole lot of effort on my part, effort that I could better use just writing and marketing a book.
The first publishing company I used is long gone. In fact, they were real trend-setters, going out of business nearly ten years ago, before it was fashionable for publishing companies to do so. They second still exists, but their presence has been scaled back a lot. I haven’t pitched them anything in years, but I can imagine they would be very, very, very careful about saying yes to anything that wasn’t a guaranteed get-rich-quick book or a tell-all by a Real-Housewife-of-Someplace.
And that’s what surprised by so much during my last book publishing experience: just how weirdly risk-averse the companies were. And I am talking about something that happened seven or eight years ago, before the industry really got slammed. Yes, I got a contract but not before detailing just exactly how I was going to market the book, providing a list of everyone I knew in the media who might interview me, and pretty much providing a list of everyone I knew who might buy it. Earlier in my career I worked in banking, and had the opportunity to work in an actual Risk Management division for a very large financial institution. Believe me, the bankers had nothing on the publishing companies when it came to risk aversion.
And so I decided not to pitch anything for a while, and see what happened. Luckily for me, what happened is that the industry changed some more and now someone like me can write a book and publish it all by myself. There are great people (let loose from publishing companies) available to help with editing and distribution and marketing, and lots of resources to get books online. And I like managing projects so don’t mind being at the helm of this one.
So wait for it – Economorphics comes out in January 2014, and I expect to learn a lot between now and then as I figure out how to be both author and publisher.
The protests over the World Cup in Brazil may be a leading indicator of the way things are going to go in the years ahead. Read my post for the Globe and Mail’s Economy Lab here
See my Globe and Mail blog here
The U.S. jobs report is still fresh on everyone’s minds, and now China is adding to the malaise with some dismal trade numbers. No wonder everyone is waiting for big things from Mr. Bernanke Read more →
September really is like a New Year. Not only does school get into full swing, but everyone is back and work – and the real trading begins. Maybe that’s the reason that financial crises are more likely to start in the Autumn than in any other season.
Let’s be clear: I am not looking for a wholesale world economic crisis to unfold anytime soon. I do, however, think that the world economy is a little shaky right now, and there are a lot of things that are going to come together to cause some volatility over the next few months, and that investors need to understand them.
Here are my top five ‘Things That Could be a Problem for the Global Economy’ :
Well, what else could I start with? Yes, the policy-makers have pledged to make things work, and yes the most recent plan by the ECB to buy bonds will help. Still, Europe is in recession and the Eurozone is unlikely to look the way it does now a few years from now. That means the risks coming from Europe are not over, not by a long shot.
With Europe as weak as it is, the rest of the world desperately needs China to a source of strength. Sadly, the last batch of numbers shows this economic powerhouse struggling and growth at the lowest in three years. Policymakers have made some effort to boost growth – in July they cut the key lending rate for the second time in a month – but they are moving slowly lest they re-ignite an already crazy property market.
It is so far so good for commodity prices (and stocks) but a little more slowing from China could hit hard.
3. The U.S. Fiscal Cliff
Tick-tock: unless some major compromises are reached in Washington, the U.S. falls off the ‘fiscal cliff’ in a matter of months. The term refers to the menu of tax hikes and spending cuts that will go into effect at the beginning of 2013 as a deficit measure, and the corresponding havoc they would cause. Unless something changes, the U.S. is headed into at least a short recession- or maybe a longer one – in 2013.
Chances are there will be some kind of band-aid measures to stop the worst of the damage – but look for some slowing just the same.
4. Oil Prices
Since the end of the Second World War, there have been 11 U.S. recessions – and eleven of them have been preceded by sharply higher oil prices. Which makes sense: the U.S. consumer sector accounts for about 70 perent of total U.S. GDP, and the generally speaking, there is not a whole lot of room in U.S. budgets to pay more to fill up the car (let alone the SUV).
If the U.S. sees a surge in growth and incomes, rising oil prices may not matter too much. Barring that scenario, even if Europe and China keep chugging along and there is a compromise reached on the fiscal cliff, high oil prices could pull the U.S. economy into a downturn anyway.
5. Lender Caution
Not that you can really blame them, but since the end of the last recession lender have been notoriously careful about issuing credit. That’s why interest rates at generational lows – and even at zero in some cases – are not sparking global growth the way they should be. Canada, by the way is a bit of an exception ot the rule – the Bank of Canada’s second quarter Senior Loan Officer Survey showed lending standards loosening up a bit – but that’s probably because our lenders were cautious to start with.
If things get shakier over the next few months, credit could get squeezed even more –in North America, and around the world too. That is not good news for the economy or the markets.
Now, none of this is to scare anyone out of the market or to have them pulling their money out of financial institutions. Still, better to understand and monitor the risks than to blindsided if Autumn gives us more than falling leaves.
The first chapter of my book Economorphics deals with the closing of the ‘demographic window’. Taking things a bit further, in this Commentary piece for the Macdonald Laurier Institute I look at the implication for Canada of a closing window- and how the country can maybe open economic doors as that happens. Of course, this problem [...]
Coca Cola’s results (NYSE: KO) disappointed…and looking at the demographics I’d say there is more disappointment to come. See my piece on Seeking Altpha here