Economic and financial analysis by Michala Marcussen, Group Chief Economist.
The fear of “no game in town”
Will 2019 see the start of a recession? Consensus says no, but the financial market slump in December shows that investors are now demanding higher risk premia. To our minds, this is not so much a reflection of changing real economic fundamentals but rather a deeper-rooted concern that we are shifting from the situation where central banks were “the only game in town” to one with “no game in town”.
The paradox of uncertainty
A certain level of uncertainty is part of life, and insurance (both private and public) and precautionary savings help manage this so that we can go about our lives unabated. At times, however, uncertainty increases well beyond these levels, often driven by political events. Faced with such uncertainty shocks, business managers will often freeze new investment and hiring decisions, while consumers delay spending on big ticket items such as cars or the purchase of a new home.
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Bitcoins, cash and tulips
Bitcoins generated much excitement in 2017, starting off the year valued at just over $1 000 per bitcoin and closing the year at around $10 000, having peaked at close to $19 000 in mid-December 2017. While the extreme volatility of Bitcoin generates both spectacular gains and devastating losses, it significantly reduces the ability of the crypto-currency to serve as a means of payment; the purpose for which it was originally designed. Michala Marcussen, Group Chief Economist, explains the latest trends around the bitcoin.
US tax reform: Europe must be vigilant
The text of the US tax reform bill passed by the Senate during the night of December 1 now has to be reconciled with the version passed by the House of Representatives on November 16, before the final bill is presented for vote by both Houses, and signed by the White House. The Republicans are hoping to finalize this process before Christmas.
What is the economic environment as Macron’s term begins?
Whereas the two previous five-year presidential terms had been marked by major slumps – a global recession in 2008 and 2009 and the euro zone crisis in 2011 and 2013 – the new French president will benefit from a far healthier economy as his term begins.
The Economic Research Department analyses, monitors and drafts forecasts/scenarios regarding global economic and financial developments on behalf of the Societe Generale group as a whole. Its experts share their vision through economic, financial and socio-political studies and articles.