An independent and global perspective
of the financial markets and the world economy


The Pain Report provides an independent perspective on the outlook for the global financial markets and world economy, free of Wall Street spin.

I have lived in six countries and travelled to over fifty and have a fascination with how the world works and what it will look like in the decades ahead.

Having spent 25 years in the investment industry I have seen a number of ‘bubbles’ and seen how the banks and the money managers have created them, denied them and then walked away from them.  Each manic episode has revealed the frailty of human nature,  the brutal reality of greed and fear, the madness of crowds, and the irrational behaviour of the brightest and best on Wall Street.

The Wall Street marketing machine is an overwhelming force which dominates many of our channels of information, TV, newspapers, radio and virtually every financial publication. Most people lead busy lives and look to the experts for guidance and advice, so when Wall Street said buy technology stocks in late 1999 and early 2000, trillions of dollars poured into Tech funds. When they said, in 1990, that Japanese house prices couldn’t decline, people believed them.

In 2005 the prevailing consensus was that there was no bubble in American house prices and the experts mass produced toxic securities predicated upon the belief that house prices don’t go down.

As the American debt bubble grew, the investment industry, banks, money managers  et al went into a collective, hyperactive campaign of mass denial  that there was a  bubble, and those of us who shouted out loud that the emperor has no clothes were vilified as doomsayers.

In January 2006,  a Pain Report entitled, ‘Consumed by Asia’, stated, “The imbalances in the U.S are simply unsustainable. The housing market is set to fall which in turn will weaken the economy; America has spent too much and saved too little. In contrast Asia has spent too little and saved too much. Over the next decade these trends will, through necessity, be reversed.”

In all my speeches through 2005 and 2006 I used the phrase “Too many Americans have gorged at the debt trough for far too long.” I took NINJA (no income, no job or assets required) mortgage advertisements from American newspapers and read them out at my speeches.  I remember thinking as I looked at every audience that no one wanted to hear this.

As the Great Financial Crisis, as it is now known, first erupted in August 2007, I wrote in a Pain Report on August 4th 2007, entitled, ‘From the Sublime to the Subprime”, “My first big picture observation is that we have moved from a period of credit expansion to one of credit contraction. Growth is set to slow significantly in the months ahead and I now believe an American recession lies ahead in the next 12 months. I hope I’m wrong.”

In a Pain Report published in November 2007 I said, “We need to ring the alarm bell on what we see in the U.K and Spanish housing markets. The U.K housing market has just peaked and is set for a nasty correction”.

In a Pain Report special edition written on September 16 2008, following the collapse of Lehman Brothers and just weeks before the October 2008 crash, I wrote, “The events of the past few weeks serve only to reinforce and moreover accelerate the credit contraction that the Pain Report has been highlighting for the past year. In essence we are in a bear market that has further to run. The pain in Wall Street has now migrated to Main Street and the economic outlook has therefore worsened…We are in a secular bear market and corporate earnings forecasts for the next 12 months remain ridiculously high…The economic adjustment that we face, particularly in the Anglo Saxon world , will be difficult  but very necessary. It is the adjustment we had to have and ultimately the world will be a better place and the days of shameful, and moreover, predatory lending will be abolished.”  Wishful thinking some might say!

More recently, and just to prove that I am not a perma- bear I wrote in March 27 2009,

“I have been very impressed by the performance of equity markets since their March lows and as I said earlier, this rally looks set to impress and has some legs. It is always comforting being the contrarian that I am, to have seen the capitulation by bottom up equity analysts and various economists and their proclamations of doom in March 2009. Where were they in 2007 and 2008? As the saying goes, the trend is your friend and stay with it until proven otherwise.”

In summary, I am a self- confessed market and economic data junkie who spends far too many hours thinking about what the world will look like in the years ahead.

Areas of special interest to me are developing Asia, particularly China and India, the Middle East (where I lived for 9 years) and oil. For many, many years I have spoken about the remarkable rise of the two most populous nations on earth and how the centre of economic gravity is shifting inexorably from west to east. This simply put, is the new reality. Similarly we need to keep a close eye on events in the Middle East and look behind the bumper sticker headlines that we are fed in the western media. This region of the world will have a significant impact upon your lives as it is home to two thirds of the world’s oil. I invite you to see the world through a very different prism, one that will challenge conventional wisdom and one that will lift the lid on the sugar coated version that we are spoon fed by the banks and the money managers and most of the media.

The Pain Report will provide you with an independent and global perspective of the financial markets, free of spin and bias. I will call it the way I see it in the firm belief that we are set for more extraordinary times ahead.

All the very best,

Jonathan Pain