During a discussion over forward planning at CNBC’s London offices on Thursday our Assignments Editor told me we have been on 103 outside broadcasts in Europe and the Middle East alone in the first half of the year.
The story of where we have reported from gives a very clear overview of how market and political factors have dominated market sentiment creating huge uncertainty and posing big questions about where we go from here.
We started the year by hitting the road to discuss the euro zone debt crisis but the focus quickly turned to other areas once the Portuguese bailout was signed off by the European Union and the International Monetary Fund. This would not last but the debt crisis quickly took a back seat as North Africa exploded into revolution.
For the last seven years I have spent the last few days of January in Davos Switzerland covering the World Economic Forum for CNBC. This year the meeting was overtaken by events in Cairo but before reflecting on the Jasmine Revolution let me remind you of what people where telling the world.
Tim Geithner was wrong when he told delegates that the US economy was on a sustainable path to recovery.
Jean-Claude Trichet’s confidence in the rebound in euro zone growth was to prove wide of the mark when the Greek debt crisis began to weight on sentiment.
Nouriel Roubini was on the money telling CNBC that the US would need to act on spending and that whatever US policy on debt reduction the Chinese would have no option but to keep on funding the US deficit.
Events in Cairo quickly began to dominate the yearly meeting of the world’s elite in Davos and by the second day we where scrambling to get a team into Cairo from our Bahrain offices.
It was impossible at that point to know where events in Cairo would lead but the hope felt by many on the streets of Cairo would quickly turn to war in Libya, suppression of dissent in countries like Bahrain, Saudi Arabia and Syria and revolution in Egypt and Tunisia.
Market Focus Shifting
With oil prices spiking as Libyan exports came off the market Saudi Arabia become the focus for global markets.
The Saudis started pumping more oil but banned a much- hyped day of rage, cracking down on any sign of dissent and ultimately drawing a line in the sand and ending fears that a revolution was about to sweep the oil fields of the Gulf.
We are nowhere near the end game on this story but the market has other things to focus on at the moment, one of which is dealing with the impact of the natural disaster in Japan which sparked a nuclear disaster and disrupted the global supply chain to the point where Jim O’Neil from Goldman Sachs Asset Management told me one company, Toyota, was having a noticeable impact on global GDP growth.
It still sends shivers down my spine listening to CNBC’s Tokyo Bureau chief Kaori Enjoji report live about the human tragedy from the scene of the disaster. The market impact was huge, with stocks across the world selling off so aggressively that panic selling hardly did the price action justice.
The global sell-off following the Japanese crisis quickly turned around so that by early April the FTSE 100 was back at levels seen before the disaster.
Having been off the front pages since early January, the debt crisis began to resurface with talk of a Greek default, chaotic communication on what to do about with Germany and the ECB deciding to hold a very public debate on who should bare the brunt of losses on a Greek restructuring.
Three months of uncertainty raised the prospect of Greece defaulting but even the US credit rating began to be a worry for investors as S&P warned it could downgrade American debt if talks on raising the debt ceiling did not end in a credible agreement.
The jury remains out on both Greece and the US debt talks and both issues are likely to remain close to the surface in the second half of the year as we approach the Aug. 2 deadline on the debt ceiling and the bond vigilantes test the latest plaster placed on the Greek crisis by the EU and IMF.
Adding to the uncertainty is the slowdown in the US, Germany and potentially China.
Over the coming months we will see if dramatic fall in US data is down to temporary factors like the Japanese disaster or high oil prices or a sign of something more dangerous, a return to recession when many are questioning the ability of the world’s major central banks to stimulate demand via unconventional monetary policy.
Money Printing Had Little Impact
Alan Greenspan told CNBC last night that the second round of money-printing or quantitative easing, QE2, had little or no impact.
"There is no evidence that huge inflow of money into the system basically worked” said the former Fed governor in an interview with Maria Bartiromo.
If he is right and the bulls are wrong on the economy then what can policy makers do to get us back on track? Loosening the fiscal purse strings does not look like a viable option given fears over the debt burdens in Europe and the US.
Printing more money is looking like a busted flush and Washington is about to enter a presidential election cycle earlier than at any time in history, for what is likely to be an ugly battle for the White House.
It must be hoped that the slowdown is indeed temporary or the only game in town might be the Chinese currency reserves.
The next six months are likely to keep investors on their toes.
Watch events in Bahrain for clues on whether revolution will spread to the Gulf as Saudi Arabia and Iran square up in the tiny island state.
Watch the commodities market for volatility and signs of market participants getting into trouble and watch second quarter earnings for evidence of whether corporate profit growth is sustainable in such uncertain times.
Simon Derrick, the head of currency research at Bank of New York Mellon in London has been worrying all year about whether 2011 is turning into 2008.
Let’s hope his worst fears are proven wrong but mark his words from April 6.
“If the loans extended to Northern Rock and Bear Stearns collectively amounted to somewhere in the region of 72.5 billion euros, then how does this compare to the bailouts of Greece and Ireland?”