The highly interconnected and complex economic system forces events to trickle down to every corner of the financial market: bond yields foreshadow stock price movements, political decisions impact foreign exchanges, central bank policies create a flood of money looking for a return. This information spreads rapidly and manifests exciting reactions from investors. My goal is to paint a vivid picture of how local financial shocks are interpreted and transformed into global events. Furthermore, exploring what caused these shocks and what led to the repercussions will be a key focus amongst all articles.
In the context of this website, a regime refers to the interaction between social, political and market forces that create a particular economic environment. The figure below represents the four different regimes of modern time.
The first segment is called Back in Time – a fundamental breakdown of the three regimes that dominated the modern financial era. The story starts in the 1940s and captures the main shifts from a pegged exchange rate, to the Great Inflation and finally reaching the advent of globalisation. Understanding the historical forces that governed previous regimes is crucial to understanding why financial markets function the way they do. As always, interpreting past performance is crucial to understanding future behaviour.
All other segments discuss the intriguing world of the financial markets – outlining interesting developments across industries, countries and financial sectors.