The VP Blog

A blog about financial markets and the VP investing framework

Australian mining is both cyclically and structurally exposed to a slowdown in China

One of the world’s biggest commodity producers, BHP Billiton, recently got a lot of attention by suggesting that the so far insatiable Chinese demand for commodities may have come to an end. The argument is simple enough: the rate of growth in China is slowing. However, the implications for commodity exporters, such as Australia, who have invested dizzying sums of money in expanding capacity to reflect an ever higher increase in Chinese commodity hunger, may be very big indeed.

read more

US Labour Market Fundamentals Still Poor

Looking beyond cyclical variations, a lingering concern is the structural undercurrents of a continuing falling labour force participation rate and a high long-term unemployment rate. Both paint a rather bleakpicture of the US labour market.

read more

UK Inflation Set to Start Rising Again

UK inflation has been falling, driven mainly by a fall in consumer demand, and last year’s VAT increase falling out of the year-on-year comparisons. Looking under the bonnet, however, reveals a disconnect between inflation of ‘necessary’ and ‘discretionary’ goods.

read more

Monetary Contraction Continues in Europe

Simon Ward at Money Moves Markets updates us on the latest monetary aggregates from the eurozone and despite strong global growth in excess liquidity and central bank expansion, money growth remains weak in Europe. Going out of 2011, 6 month nominal M1 growth in the...

read more

The Slowdown in China Takes a Turn for the Worse

The market has recently taken relief from the decision by China to lower the reserve requirement ratio (RRR) as well as the signal that it will be the first of a series of cuts. The real story however is that the shift comes in response to a sharp slowdown in both domestic and external demand in the first quarter of 2012 and thus it seems that investors may have taken too much comfort in the strong Q4-11 GDP print.

read more

CNBC – Squawk Box, Guest Host Appearance

Variant Perception’s Jonathan Tepper will be appearing as a Guest Host on Squawk Box Europe, tomorrow (Tuesday 21st February) from 7am – 9am GMT.

[Updated] See our Press page for part of the interview.

read more

EMAIL UPDATES

Company Story