Hello. I’m Burnham Banks and I studied economics in the late 80s and early 90s. I’m still studying economics today and am still no wiser. This blog is a journal, a record of my thoughts and experiences. If we are destined to repeat our mistakes, we should at least repeat them faithfully. If not, then perhaps the past is a mischievous guide and we should try something new.
Friday, 06 January 2023 | 5:42 pm
2022 was the first time since 1969 that equities and bonds fell in unison in a calendar year. The proximate cause of the declines was rising interest rates as central banks tightened financial conditions to rein in higher inflation. Rising interest rates affect both profitability and asset valuations via higher discount rates applied to future
Friday, 02 December 2022 | 12:42 pm
There once was a fool who prized being right above being rich. He placed his bets to hedge the pain he might suffer for his failings and, fool that he was, was more often right than wrong, and therefore succeeded in being more right than rich.
Friday, 02 December 2022 | 10:29 am
I’ve written about this elsewhere, always part of a wider survey of inflation and rates, but I really need to record this in one place now as it may be important later. The Gibson Paradox observes that rates and inflation seem to be positively related more than can be explained by lag effects. I therefore
Thursday, 27 October 2022 | 1:26 pm
Current Observations: On the positive side of the ledger: Economic growth is still strong. Household & bank balance sheets are strong. Corporate balance sheets are fairly strong. Fiscal policy is still fairly expansionary. Green capex momentum is strong. Equities are fairly valued. On the negative side: Inflation is persistent. Central banks are tightening. Governments are
Thursday, 29 September 2022 | 4:47 pm
I was trawling around London soliciting views mostly from the main beneficiaries of the Chancellor’s tax cuts announced 23 September. How? Why? What? The problem with the budget is not that it doesn’t make sense, we can make anything sensible given enough experts’ opinions. The problem was marketing, communications, governance, those sorts of inconveniences. A