Green shoots or advanced mould?
This was the question posed by Justin Urquhart Stewart of Seven Investment Management at yesterday’s 2020 annual conference. In an entertaining speech Justin gave us his views, some of which I thought might be useful to share:
- The UK is damaged but not doomed
- Unemployment improving
- Housing market stronger
- Lots of corporate cash
- Confidence surveys are improving
- Increase in “Re-shoring” – bringing production back to the UK
- UK is the world’s 8th largest manufacturer
- Europe still poses a major risk but the emergency has been pushed down the road a bit
- Germany needs Europe
- Growth expected throughout Europe in 2014 (even Greece, Spain and Portugal)
As it’s topical, there was an interesting slant on understanding the US fiscal cliff:
| US Tax revenue: | $2,170,000,000,000 |
| Fed budget: | $3,820,000,000,000 |
| New debt: | $1,650,000,000,000 |
| National debt: | $14,271,000,000,000 |
| Recent budget cuts: | $38,500,000,000 |
Now let’s remove the eight zero’s and pretend it’s a household budget…..
| Annual family income: | $21,700 |
| Money the family spent: | $38,200 |
| New debt on the credit card: | $16,500 |
| Outstanding balance on that card: | $142,710 |
| Total budget cuts so far: | $38.50 |
Puts it into some perspective!
Doing a similar thing for the UK we would see the following position:
| Annual family income: | £612 |
| Money the family spent: | £720 |
| New debt on the credit card: | £108 |
| Outstanding balance on that card: | £1,153 |
| Total budget cuts so far: | £35 |
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