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   Investment Thoughts - Macro Observations

The Collapse In Global Trade Has Been Greatly Exaggerated
The value of world trade fell in 2015 for the first time since the crisis. However, this reversal was not in trade, but in the dollar price of goods sold for export abroad.

World Trade

Source: Thomson Reuters Datastream / Fathom Consulting

Refresh the chart in your browser | Edit chart in Datastream

As our chart shows, the US dollar value of world trade has fallen over the past year or so, though by much less than it fell through the crisis. And the fact that the decline coincided with a collapse in the US dollar price of crude oil tells us much about its cause. Measured in volume terms, world trade has continued to grow steadily. What is undeniably true is that the pace of growth in world trade has slowed since the financial crisis. And more recently, demand from emerging markets appears to have stalled. This should not come as a great surprise, given that Chinas slowdown, together with the resulting falls in commodities prices, is putting severe pressure on many of these economies. But this weakness is confined to developing economies. Indeed in 2015, import growth in advanced economies was the strongest since the bounce back in 2010.


Fathom Consulting, Chart Of The Week, February 29, 2016

29.02.2016


Themes

Asia

Bonds

Bubbles and Crashes

Business Cycles
Central Banks

China

Commodities
Contrarian

Corporates

Creative Destruction
Credit Crunch

Currencies

Current Account

Deflation
Depression

Equity
Europe
Financial Crisis
Fiscal Policy

Germany

Gloom and Doom
Gold

Government Debt

Historical Patterns

Household Debt
Inflation

Interest Rates

Japan

Market Timing

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Monetary Policy
Oil
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Permabears
PIIGS
Predictions

Productivity
Real Estate

Seasonality

Sovereign Bonds
Systemic Risk

Switzerland

Tail Risk

Technology

Tipping Point
Trade Balance

U.S.A.
Uncertainty

Valuations

Yield