The View | What does 2018 have in store for bitcoin, Chinese growth and Hong Kong property prices?

Thank goodness – the season of goodwill has faded and we can get back to normal, which means being cynical, or maybe just realistic. In this vein, I’d like to offer some reflections on the year that’s about to expire and some thoughts on what’s to come.

There’s nothing new under the sun – that famous Old Testament phrase is a reliable guide to the wonderful world of investment, where fads and crazes rise and fall with staggering similarity. This year’s biggest investment craze has definitely been bitcoin, and although absolute predictions in the world of investment are generally unwise, it requires only the smallest of crystal balls to predict that the bitcoin boom will be followed by a bitcoin bust.

The political environment has been oversold – while it is perfectly true to say that changes at a political level always have some impact on the markets, the past year has shown that investors have become far less exercised by what politicians do and say and far more interested in what happens in the underlying economy. Thus the madness in the White House has failed to deter US stock investors, who saw an oversold market with strong growth potential. With characteristic bombast, President

Trump has claimed credit for share-price rises. Let’s see if he will claim equal responsibility when the markets fall. Meanwhile in Europe the political turbulence in Britain, Spain, the Netherlands and Germany, not forgetting the upheavals in many Eastern European states, have largely been shrugged off by investors who take the view that political manoeuvres can safely be ignored, except in the case of Britain where a campaign of national suicide seems to be underway.

Gravity can be defied, but not indefinitely – this basic law of more or less everything has been proven time and again, yet China’s four decades of economic growth have indeed been gravity-defying. The economy is still in growth mode, albeit at a lower rate. Those predicting a setback for the Chinese economy have not looked so good. Yet the clouds are gathering and, precisely because the bulls are so confident about prospects for the coming year, it’s a fair bet that bears will be looking rather better in the near future.

A Hong Kong prediction that’s a no-brainer – in a place where property prices are nothing short of a popular obsession and where, at regular intervals, the government claims to be doing something to make home ownership more affordable, the singular lack of success in the past clearly points to a similar lack of success in the future as new schemes are hatched. At core the local administration is terrified of alienating the property tycoons, yet realises that their rapacious behaviour is deeply unpopular. This leads to a vicious cycle that cannot be broken except by external pressures.