Hold your nerve

The Fed is not going to raise rates. Nor is the Bank of England, or the ECB, or the BoJ or anyone that matters.

The back-up in long term rates is already having an impact on US house sales, and e same will happen  everywhere else. They'll scale back, but then hold at close to 0% for quite a while as the markets get used again to the "old normal" - ie no QE distorting long term interest rates.

And we're back

From a few weeks in Europe. It wasn't all sun, food, rosé and warm but not humid weather. I actually did do a spot of observing along the way, and here is the result....

France - most of southern France is for sale, except no-one is buying, because the semi-communist M Hollande's new tax regime has scared them off. Capital gains tax through the roof, exemptions withdrawn, and wealth taxes being increased.The place is a mess. The only holiday makers appear to be Belgians and Dutch who seem to still be loaded. There were a few Germans too, but relatively few French compared to previous years. Lots of horror stories of people with houses they can't sell or rent, boats that have been for sale for well over a year, in many cases over 2 years, restaurants you normally can't get into for love or money that this year you could just walk up to without a booking and sit down, and generally a pretty depressed feel to the place.

And the restaurants thigh lighted one of France's continuing problems. Total labour inflexibility. The ones with customers were woefully understaffed because under French law you can't just hire someone for a summer season and then fire the, when you don't need them. So instead of hiring, restaurant owners operate with skeleton staff, as does everyone else. Labour inflexibility and tax rates will keep France at the bottom of the European league tables for years to come.

UK - admittedly I was in the London bubble, but that is a place that has a buzz. Streets are full, people are shopping, eating out, having fun and enjoying the summer. There was no feel at all of a recession or even a slowdown.

In short, buy GBP vs sell EUR.

And back to Asia - as many ships as ever parked up out there. Singapore city is a bubble like London, but outside of Singapore I think the slowdown is continuing, Not looking to go long Asia at any time soon.