2019 is going to be horrid

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I am by nature an optimist. I temper this by never hoping for too much. But I undoubtedly live in hope. Until it comes to 2019, that is.

I promise, I tried to be upbeat when thinking about the coming year. There is a section for being so in the mind-map that follows. But I overwhelmingly failed. Of course, all predictions are wrong and my sense of foreboding may be misplaced. But I doubt it. 2019 is going to be horrid. Let’s not pretend otherwise. This is why (click on the mind-map to open it in a separate page and then click it again for a large version):

For those who want the laid out version, this is it, but it’s not as easy to read (in my opinion).

2019 risks

  1. Political
    • Brexit
      • The collapse of effective government in the UK
      • The risk of unrest given almost any outcome
      • The possibility of economic turmoil, created by choice, which is unprecedented
      • The absence of effective political leadership
      • The risk of the U.K. breaking up into two and maybe three parts
    • Trump
      • The choice not to govern in the USA and indifference to the rule of law
    • Populism
      • The act of looking to extremes for solutions
    • EU
      • German drift
      • French floundering
      • Elections and growing extremes
      • Hungary and the fall of democracy
      • Italy and the rise of the right
    • Migration
      • The continuing global stress
    • China
      • The threat of the alternative
    • Russia
      • Putin’s continued passive aggressiveness
    • The Middle East
      • Israeli elections
      • Stresses in Iraq and Iran
      • The ongoing risk in Syria
      • Spillover risk in Turkey
        • The continuing risk of Erdogan
      • The unreliability of Saudi Arabia
  1. Economic
    • Brexit
      • The economic unpredictability of the world’s sixth largest economy schooling economic melt-down
    • The USA
      • The threat from rising interest rates
      • Inverted yield curve - short term rates being higher than long term dates suggests recession is likely
      • The likelihood of trade war fuelling recession, populism and political stress simultaneously
    • The EU
      • Germany’s continued failure to take the lead in redistribution
      • French floundering
      • Italian stress
      • The risk of QE withdrawal
    • Oil
      • Unpredictability of pricing
      • Inability to predict supply
      • A roller coaster is likely
    • Stock markets
      • The withdrawal of QE is meant to reduce asset prices. This may well happen.
      • Uncertainty created by US interest rate policy, in particular
      • Stock market crashes do not create recessions but the change moods. Volatility is already high. A crash is possible.
    • Property markets
      • House prices are falling, and not just in the U.K. This is a trend resulting from the ending of QE. This does not need to create recession in itself. But it does not help the mood.
    • Developing markets
      • US interest rates rising causing major spillover risks and the chance of default in many countries where debt is denominated in dollars
    • Debt
      • There is just too much of it
      • Major threat in countries like Italy and China but a potential threat almost anywhere, especially if asset prices fall as QE works out of the system and political uncertainty rises
      • The return of the zombie bank is all too possible
      • There is evidence that debt concerns are now hitting consumer spending and that retailing is being hit hard as a result. This could be enough to create recession by itself.
    • Climate change
      • Nothing is happening
    • Philosophy
      • Those in charge still think they can find solutions in neoliberalism
    • Inequality
      • Will grow. Neoliberalism ensures it.
    • Wages
      • Will remain broadly stagnant. Neoliberalism ensures it.
    • Insecurity
      • Will grow. Neoliberalism ensures it.
  1. The upsides
    • Awareness of the need to tackle climate change
      • The Green New Deal
    • Awareness of the dangers of inequality
      • All the major economic international organisations now see the threat
    • There are attempts at new economic thinking
    • Some measures to tackle tax abuse are working