5 Market Axioms Lose Reliability: Financial Times

Systemic changes are underway in markets, and spreading nationalism may put economic globalization on pause. Allianz economist Mohamed El-Erian warns that investors cannot depend on globalization expanding markets and efficiency, emerging economies catching up with advanced economies, robust liquidity stabilizing markets, policies limiting economic downturns, or governance supporting the global of law. “Each tenet is subject to considerable uncertainty, adding to the need to review medium-term investment approaches on account of accelerating technological innovations, climate change and demographic trends,” he explains. “The possibility of years of deglobalisation — where barriers reduce the free flow of trade and investment — remains substantial.” Investors can expect disruptions in development and foreign investment along with political influence over economic and monetary policies. Some investors benefit from volatility for now, but negative rates, increased risk-taking, bubbles, political instability, deglobalization and lack of respect for the rule of law pose long-term challenges for global markets. – YaleGlobal

5 Market Axioms Lose Reliability: Financial Times

Rising nationalism threatens investors’ assumptions about globalization and the ability of policies to fix problems; systemic problems may be on the horizon
Mohamed El-Erian
Thursday, November 14, 2019

Read the article from Financial Times about systemic changes and assumptions no longer sure for investors.

Mohamed El-Erian is Allianz’s chief economic adviser and president-elect of Queens’ College, University of Cambridge.

 World Justice Project Selected Nations and Rankings Denmark, 1 Germany, 6 Canada, 9 -- UK, 12 Japan, 15 Hong Kong, 16 France, 17 Korea, 18 US, 20 ---- Italy, 28 Greece, 36 --- South Africa, 47 Brazil, 58 Indonesia, 62 India, 68 ----- China, 82 Russia, 88 Philippine, 90 Guatemala, 96 Mexico, 99 Iran, 102 Nigeria, 106 Turkey, 109 Bangladesh, 112 Pakistan, 117 Ethiopia, 118 Egypt, 121 Cambodia, 125 Venezuela, 126

Comparing rule of law: The index examines constraints on government power, corruption, open government, fundamental rights, order and security, regulatory enforcement, civil and criminal justice; less than one-fifth of nations ranked have strong adherence to the rule of law (Rule of Law Index 2019, World Justice Project)

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