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George Dorgan

George Dorgan

George Dorgan (penname) predicted the end of the EUR/CHF peg at the CFA Society and at many occasions on SeekingAlpha.com and on this blog. Several Swiss and international financial advisors support the site. These firms aim to deliver independent advice from the often misleading mainstream of banks and asset managers. George is FinTech entrepreneur, financial author and alternative economist. He speak seven languages fluently.

Articles by George Dorgan

Swiss Trade Balance Q2 2021: export record

13 days ago

We do not like Purchasing Power or Real Effective Exchange Rate (REER) as measurement for currencies. For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity gains, while the REER assumes constant productivity in comparison to trade partners.
Who has read Michael Pettis, knows that a rising trade surplus may also be caused by a higher savings rate while the trade partners decided to spend more. This is partially true. Recently Europeans started to increase their savings rate, while Americans reduced it. This has led to a rising trade and current surplus for the Europeans. But also to a massive Swiss trade surplus with the United States, that lifted Switzerland on the U.S. currency manipulation watch list.
To

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Swiss Trade Balance Q1 2021: exports go back above their pre-Covid-19 level

April 23, 2021

We do not like Purchasing Power or Real Effective Exchange Rate (REER) as measurement for currencies. For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity gains, while the REER assumes constant productivity in comparison to trade partners.
Who has read Michael Pettis, knows that a rising trade surplus may also be caused by a higher savings rate while the trade partners decided to spend more. This is partially true. Recently Europeans started to increase their savings rate, while Americans reduced it. This has led to a rising trade and current surplus for the Europeans. But also to a massive Swiss trade surplus with the United States, that lifted Switzerland on the U.S. currency manipulation watch list.
To

Read More »

Weekly SNB Sight Deposits and Speculative Positions: SNB selling euros and dollars – March 29, 2021

March 29, 2021

Update March 29 2021: SNB selling euros and dollars
Sight Deposits have fallen: The change is -0.2 bn. compared to last week, this means the SNB is selling euros and dollars.
Speculative Positioning: Speculators are long CHF against USD. Since March 13, they have shifted to a long EUR position against USD.
The following shows the recent developments.
Sight Deposits, i.e. SNB interventions
FX rates
Speculative positions CHF: Since April, speculators are long CHF against USD.

Week ending in (+ link to source)
Events…………………….
avg. EUR/CHF during period
avg. USD/CHF during period
Net Speculative PositionCHF vs USD
Net speculative Position
EUR vs USD
Delta sight deposits
if >0 then SNB intervention
Total Sight Deposits
Sight Deposits @SNB from Swiss

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Swiss Trade Balance An exceptional year 2020: border crossings closed and online commerce booming

March 4, 2021

We do not like Purchasing Power or Real Effective Exchange Rate (REER) as measurement for currencies. For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity gains, while the REER assumes constant productivity in comparison to trade partners.
Who has read Michael Pettis, knows that a rising trade surplus may also be caused by a higher savings rate while the trade partners decided to spend more. This is partially true. Recently Europeans started to increase their savings rate, while Americans reduced it. This has led to a rising trade and current surplus for the Europeans. But also to a massive Swiss trade surplus with the United States, that lifted Switzerland on the U.S. currency manipulation watch list.
To

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The Swiss National Bank reports a profit of CHF 20.9 billion for 2020 (2019: CHF 48.9 billion).

March 1, 2021

The increasing volatility of SNB Earnings
Annual results are not really definite. Given that the SNB accumulates foreign currencies with interventions, they have huge swings.
But the SNB may lose 50 billion in one year and win 60 billion in the next year or vice verse.
Low Inflation, Crashes and Central Bank Money Printing
The crisis caused by the Covid19 virus,is a typical crisis with low inflation (at least for now). During such a crisis, central bank money printing helps asset price to rise again.
This applies to all assets on the SNB balance sheet:
Government and corporate bonds
Stocks
Gold
The Corona crisis is just one of these low inflation crisis.
Therefore SNB profits have recovered; this time far more quickly than during the Financial Crisis. As

Read More »

Swiss Trade Balance January 2021: foreign trade starts the year on a positive note

February 18, 2021

We do not like Purchasing Power or Real Effective Exchange Rate (REER) as measurement for currencies. For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity gains, while the REER assumes constant productivity in comparison to trade partners.
Who has read Michael Pettis, knows that a rising trade surplus may also be caused by a higher savings rate while the trade partners decided to spend more. This is partially true. Recently Europeans started to increase their savings rate, while Americans reduced it. This has led to a rising trade and current surplus for the Europeans. But also to a massive Swiss trade surplus with the United States, that lifted Switzerland on the U.S. currency manipulation watch list.
To

Read More »

Swiss Trade Balance Foreign trade 2020: historic decline against the backdrop of a pandemic

January 28, 2021

We do not like Purchasing Power or Real Effective Exchange Rate (REER) as measurement for currencies. For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity gains, while the REER assumes constant productivity in comparison to trade partners.
Who has read Michael Pettis, knows that a rising trade surplus may also be caused by a higher savings rate while the trade partners decided to spend more. This is partially true. Recently Europeans started to increase their savings rate, while Americans reduced it. This has led to a rising trade and current surplus for the Europeans. But also to a massive Swiss trade surplus with the United States, that lifted Switzerland on the U.S. currency manipulation watch list.
To

Read More »

Swiss Producer and Import Price Index in November 2020: -2.3 percent YoY, -0.5 percent MoM

January 19, 2021

The Producer Price Index (PPI) or officially named “Producer and Import Price Index” describes the changes in prices for producers and importers. For us it is interesting because it is used in the formula for the Real Effective Exchange Rate. When producers and importers profit on lower price changes when compared to other countries, then the Swiss Franc reduces its overvaluation. The Swiss PPI values of -6% in 2015 (see below), compared to -3% in Europe or -1% in the U.S., diminished the overvaluation. In 2017, however, producer prices are rising again – in both Europe and Switzerland. See more in Is the Swiss Franc overvalued?
19.01.2021 – The Producer and Import Price Index rose in December 2020 by 0.5% compared with the previous month, reaching 98.4 points

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Swiss balance of payments and international investment position: Q3 2020

January 5, 2021

In the third quarter of 2020, the current account surplus amounted to CHF 9 billion, CHF 3 billion less than in the same quarter of 2019. This decline was particularly due to the lower receipts surplus in trade in goods and services. In the case of the goods trade, the decline was attributable to gold trading. This decrease was curbed by the expenses surplus for primary and secondary income, which decreased compared to Q3 2019.
In the financial account, reported transactions in the third quarter of 2020 showed a net acquisition of financial assets (CHF 40 billion) and a net incurrence of liabilities (CHF 27 billion). The acquisition on the assets side was the result of intragroup lending (direct investment) and the SNB’s purchases of foreign currency (reserve

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Swiss Trade Balance November 2020: exports are on the rise

December 17, 2020

We do not like Purchasing Power or Real Effective Exchange Rate (REER) as measurement for currencies. For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity gains, while the REER assumes constant productivity in comparison to trade partners.
Who has read Michael Pettis, knows that a rising trade surplus may also be caused by a higher savings rate while the trade partners decided to spend more. This is partially true. Recently Europeans started to increase their savings rate, while Americans reduced it. This has led to a rising trade and current surplus for the Europeans. But also to a massive Swiss trade surplus with the United States, that lifted Switzerland on the U.S. currency manipulation watch list.
To

Read More »

Swiss Producer and Import Price Index in November 2020: -2.7 percent YoY, -0.1 percent MoM

December 15, 2020

The Producer Price Index (PPI) or officially named “Producer and Import Price Index” describes the changes in prices for producers and importers. For us it is interesting because it is used in the formula for the Real Effective Exchange Rate. When producers and importers profit on lower price changes when compared to other countries, then the Swiss Franc reduces its overvaluation. The Swiss PPI values of -6% in 2015 (see below), compared to -3% in Europe or -1% in the U.S., diminished the overvaluation. In 2017, however, producer prices are rising again – in both Europe and Switzerland. See more in Is the Swiss Franc overvalued?

15.12.2020 – The Producer and Import Price Index fell by 0.1% in November 2020 compared with the previous month. The index stood at 97.9

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Swiss Trade Balance October 2020: foreign trade falters

November 19, 2020

We do not like Purchasing Power or Real Effective Exchange Rate (REER) as measurement for currencies. For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity gains, while the REER assumes constant productivity in comparison to trade partners.
Who has read Michael Pettis, knows that a rising trade surplus may also be caused by a higher savings rate while the trade partners decided to spend more. This is partially true. Recently Europeans started to increase their savings rate, while Americans reduced it. This has led to a rising trade and current surplus for the Europeans. But also to a massive Swiss trade surplus with the United States, that lifted Switzerland on the U.S. currency manipulation watch list.
To

Read More »

Covid, November 19: Swiss ICU numbers reach new peak as infection rate moderates

November 18, 2020

Deaths because of and with Covid19
Over the last 48 hours, Switzerland’s Federal Office of Public Health (FOPH) reported a further 227 deaths among laboratory-confirmed Covid-19 cases, bringing the death toll to 1,654 since summer and 3,385 since the beginning of the year.
Total Covid-19 deaths in Switzerland since the beginning of the pandemic have now reached 3,696 of which 3,385 were laboratory confirmed infections.
Hospitalisations
The are currently 543 Covid-19 patients in intensive care in Switzerland, a number above the peak of 527 reached during the first wave, reported to SRF based data supplied by ICU monitoring.
Postponing regular hospital operations has so far allowed Swiss hospitals, in aggregate, to operate with some intensive care beds in reserve.

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Covid, November 16: 198 deaths in Switzerland over weekend as infection rate slows

November 16, 2020

Deaths because of and with Covid19
Over the last 72 hours, Switzerland’s Federal Office of Public Health (FOPH) reported 198 deaths among laboratory-confirmed Covid-19 cases, bringing the death toll to 1,427 since summer and 3,158 since the beginning of the year.
Total Covid-19 deaths in Switzerland since the beginning of the pandemic have now reached 3,496 of which 3,158 were laboratory confirmed infections.
Hospitalisations
At 4,000, the number of hospitalised Covid-19 patients remains high in Switzerland, based on figures published by RTS. During the first wave, this figure peaked at 2,409.
Scaling back regular hospital operations has so far allowed Swiss hospitals, in aggregate, to avoid intensive care overload. Currently, 75% of current intensive care

Read More »

Covid, November 13: 553 deaths in Switzerland this week as infection rate slows

November 13, 2020

Deaths because of and with Covid19
Over the 7 days to 13 November 2020, Switzerland’s Federal Office of Public Health (FOPH) reported 553 deaths among laboratory-confirmed Covid-19 cases, bringing the death toll to 1,229 since summer and 2,960 since the beginning of the year.
The 553 reported deaths this week represent 19% of the total so far, making the last 7 days the deadliest 7-day period since the virus arrived in Switzerland.
There are currently 3,945 Covid-19 patients in hospitals across Switzerland, according to FOPH figures published by RTS, a number significantly above the peak during the first wave.
Total Covid-19 deaths in Switzerland since the beginning of the pandemic have now reached 3,235, of which 2,960 were laboratory confirmed infections.

Read More »

Covid, November 10: no time to relax, says minister as 3-day Swiss case number returns to 17,000

November 9, 2020

New Infections
On 9 November 2020, Switzerland’s Federal Office of Public Health (FOPH) reported 17,309 new laboratory-confirmed Covid-19 cases over 72 hours, bringing the total to 229,222.
The 24-hour average number of new cases of 5,770 recorded over the weekend is lower than the previous weekend when it was 7,309 (21,926 over 72 hours).
However, Alain Berset, the minister in charge of health care in Switzerland, told an audience in Jura that now is not the time to relax, according to RTS. Hospitals and nursing homes are under great stress, said the minister. Certain cantons are being forced to transfer patients to other cantons as they have reached the limit of their intensive care capacity.

Daily Reported Cases Switzerland, November 10 Source:

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Covid, Nov6: 62 new deaths as hospitalisations rise in Switzerland

November 6, 2020

Deaths because of and with Covid19
On 5 November 2020, Switzerland’s Federal Office of Public Health (FOPH) reported 62 deaths among laboratory-confirmed cases of Covid over 24 hours, bringing the total death toll since summer to 606.
Current daily deaths are not far from the peak level reached during the first wave over spring, according to FOPH data.
Total deaths in Switzerland since the beginning of the pandemic have reached 2,622, of which 2,337 were laboratory confirmed.

.

Hospitalisations
In addition, FOPH reported a further 399 hospitalisations over 24 hours. There are currently 3,428 Covid-19 patients in hospitals across Switzerland, according to FOPH figures published by RTS.
Across Switzerland, 23% (241) of Switzerland’s intensive care capacity

Read More »

SNB Profit in Q1 to Q3 2020: CHF 15.1 billion Despite Covid19

October 31, 2020

The increasing volatility of SNB Earnings
Annual results are not really definite. Given that the SNB accumulates foreign currencies with interventions, they have huge swings.
But the SNB may lose 50 billion in one year and win 60 billion in the next year or vice verse.

Low Inflation, Crashes and Central Bank Money Printing
The crisis caused by the Covid19 virus,is a typical crisis with low inflation (at least for now). During such a crisis, central bank money printing helps asset price to rise again.
This applies to all assets on the SNB balance sheet:
Government and corporate bonds
Stocks
Gold
The Corona crisis is just one of these low inflation crisis.
Therefore SNB profits have recovered; this time far more quickly than during the Financial Crisis. As

Read More »

Second Covid Wave in Europe, Rest of the World still Unaffected

October 21, 2020

Second Covid Wave in Europe
The second wave of the Coronavirus is currently raging in Europe. 
The attached image shows the number of newly infected people in European countries on a linear scale. In particular in the Czech republic, but also in Switzerland, France or Spain, one can see a tendency towards exponential growth.

New cases in Europe – Click to enlarge

Multiplier between Newly Infected and Newly  Recovered
Many people quickly recover after having contracted Coronavirus, they are not infectious any more after about 10 days. Therefore one must compare the number of newly infected people with the number of recovered people. This gives a delta.

Unfortunately some countries like the UK or Spain do not publish the number of newly recovered.
The

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Swiss Trade Balance Q3 2020: foreign trade regains color

October 20, 2020

We do not like Purchasing Power or Real Effective Exchange Rate (REER) as measurement for currencies. For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity gains, while the REER assumes constant productivity in comparison to trade partners.
Who has read Michael Pettis, knows that a rising trade surplus may also be caused by a higher savings rate while the trade partners decided to spend more. This is partially true. Recently Europeans started to increase their savings rate, while Americans reduced it. This has led to a rising trade and current surplus for the Europeans. But also to a massive Swiss trade surplus with the United States, that lifted Switzerland on the U.S. currency manipulation watch list.
To

Read More »

Swiss Producer and Import Price Index in September 2020: -3.1 percent YoY, +0.1 percent MoM

October 15, 2020

The Producer Price Index (PPI) or officially named “Producer and Import Price Index” describes the changes in prices for producers and importers. For us it is interesting because it is used in the formula for the Real Effective Exchange Rate. When producers and importers profit on lower price changes when compared to other countries, then the Swiss Franc reduces its overvaluation. The Swiss PPI values of -6% in 2015 (see below), compared to -3% in Europe or -1% in the U.S., diminished the overvaluation. In 2017, however, producer prices are rising again – in both Europe and Switzerland. See more in Is the Swiss Franc overvalued?

15.10.2020 – The Producer and Import Price Index rose in September 2020 by 0.1% compared with the previous month, reaching 98.0 points

Read More »

Swiss balance of payments and international investment position: Q2 2020

September 23, 2020

Current Account

Key figures:
Current Account: Down 52.14% against Q2/2019 to 9.878 bn. CHF
of which Goods Trade Balance: Minus 13.55% against Q2/2019 to 15.193 bn.
of which the Services Balance: Minus 39.69% to 1.158 bn.
of which Investment Income: Minus 70.07% to 3.012 bn. CHF.

Current Account Switzerland Q2 2020(see more posts on Switzerland Balance of Payments, Switzerland Capital Account, Switzerland Current Account, Switzerland Financial Account, ) Source: snb.ch – Click to enlarge
In the second quarter of 2020, the current account surplus amounted to CHF 10 billion; in the same quarter of 2019 it was CHF 21 billion. This decline was principally due to lower receipts from direct investment abroad. While the goods trade balance and the services trade

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Swiss Producer and Import Price Index in August 2020: -3.5 percent YoY, -0.4 percent MoM

September 16, 2020

The Producer Price Index (PPI) or officially named “Producer and Import Price Index” describes the changes in prices for producers and importers. For us it is interesting because it is used in the formula for the Real Effective Exchange Rate. When producers and importers profit on lower price changes when compared to other countries, then the Swiss Franc reduces its overvaluation. The Swiss PPI values of -6% in 2015 (see below), compared to -3% in Europe or -1% in the U.S., diminished the overvaluation. In 2017, however, producer prices are rising again – in both Europe and Switzerland. See more in Is the Swiss Franc overvalued?
15.09.2020 – The Producer and Import Price Index fell in August 2020 by 0.4% compared with the previous month, reaching 97.9 points

Read More »

Swiss Balance of Payments and International Investment Position: Q1 2020

June 29, 2020

Current Account

Key figures:
Current Account: Down 13.72% against Q1/2019 to 17.4 bn. CHF
of which Goods Trade Balance: Plus 8.05% against Q1/2019 to 17.4 bn.
of which the Services Balance: Minus 53.84% to 3.02 bn.
of which Investment Income: Minus 0.54% to 6.3 bn. CHF.

Current Account Switzerland Q1 2020(see more posts on Switzerland Balance of Payments, Switzerland Capital Account, Switzerland Current Account, Switzerland Financial Account, ) Source: snb.ch – Click to enlarge
In the first quarter of 2020, the current account surplus amounted to CHF 17 billion, CHF 3 billion less than in the same quarter of 2019. This decline was principally due to trade in services, particularly licence fees, telecommunications, computer and information services, and

Read More »

Swiss Trade Balance May 2020: signs of recovery in foreign trade

June 18, 2020

We do not like Purchasing Power or Real Effective Exchange Rate (REER) as measurement for currencies. For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity gains, while the REER assumes constant productivity in comparison to trade partners.
Who has read Michael Pettis, knows that a rising trade surplus may also be caused by a higher savings rate while the trade partners decided to spend more. This is partially true. Recently Europeans started to increase their savings rate, while Americans reduced it. This has led to a rising trade and current surplus for the Europeans. But also to a massive Swiss trade surplus with the United States, that lifted Switzerland on the U.S. currency manipulation watch list.
To

Read More »

Swiss Producer and Import Price Index in May 2020: -4.5 percent YoY, -0.5 percent MoM

June 15, 2020

The Producer Price Index (PPI) or officially named “Producer and Import Price Index” describes the changes in prices for producers and importers. For us it is interesting because it is used in the formula for the Real Effective Exchange Rate. When producers and importers profit on lower price changes when compared to other countries, then the Swiss Franc reduces its overvaluation. The Swiss PPI values of -6% in 2015 (see below), compared to -3% in Europe or -1% in the U.S., diminished the overvaluation. In 2017, however, producer prices are rising again – in both Europe and Switzerland. See more in Is the Swiss Franc overvalued?
15.06.2020 – The Producer and Import Price Index fell in May 2020 by 0.5% compared with the previous month, reaching 97.6 points

Read More »

Swiss Trade Balance April 2020: foreign trade collapses

May 26, 2020

We do not like Purchasing Power or Real Effective Exchange Rate (REER) as measurement for currencies. For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity gains, while the REER assumes constant productivity in comparison to trade partners.
Who has read Michael Pettis, knows that a rising trade surplus may also be caused by a higher savings rate while the trade partners decided to spend more. This is partially true. Recently Europeans started to increase their savings rate, while Americans reduced it. This has led to a rising trade and current surplus for the Europeans. But also to a massive Swiss trade surplus with the United States, that lifted Switzerland on the U.S. currency manipulation watch list.
To

Read More »

Swiss Producer and Import Price Index in April 2020: -4.0 percent YoY, -1.3 percent MoM

May 14, 2020

The Producer Price Index (PPI) or officially named “Producer and Import Price Index” describes the changes in prices for producers and importers. For us it is interesting because it is used in the formula for the Real Effective Exchange Rate. When producers and importers profit on lower price changes when compared to other countries, then the Swiss Franc reduces its overvaluation. The Swiss PPI values of -6% in 2015 (see below), compared to -3% in Europe or -1% in the U.S., diminished the overvaluation. In 2017, however, producer prices are rising again – in both Europe and Switzerland. See more in Is the Swiss Franc overvalued?

14.05.2020 – The Producer and Import Price Index fell in April 2020 by 1.3% compared with the previous month, reaching 98.1 points

Read More »

REIT Return and Dividend Yield

May 11, 2020

Ticker
Name
Div Yld
Holdings
Expense Ratio
Beta
1Y Return
5Y Return
Mrk
Cap
USRT
iShares Core U.S. REIT ETF
4.2%

0.08%

-15.30%
9.39%
1.71B
IFEU
iShares Europe Developed Real Estate ETF

0.48%

-15.57%
-6.99%

REZ
iShares Residential Real Estate ETF

0.48%

-13.27%
17.37%

DRV
Direxion Daily MSCI Real Estate Bear 3x Shares

1.10%

-38.88%
-81.74%

RWR
SPDR Dow Jones REIT ETF

0.25%
0.86
-18.84%
1.08%

RORE
Hartford Multifactor REIT ETF

0.45%

-22.28%

NURE
Nuveen Short-Term REIT ETF

0.35%

-19.43%

SRET
Global X SuperDividend REIT ETF

0.58%

-48.17%
-28.29%

* Assets in thousands of U.S. Dollars. Assets and Average Volume as of 2020-05-11 16:20:04 -0400
source

Symbol

ETF Name

Asset Class

Total Assets*

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SNB Interim Results: -38 Billion, An Analysis

April 24, 2020

The increasing volatility of SNB Earnings
Annual results are not really definite. Given that the SNB accumulates foreign currencies with interventions, they have huge swings.
But the SNB may lose 50 billion in one year and win 60 billion in the next year or vice verse.

Franc will rise again with crisis or inflation
With a new financial crisis or a with a big rise of inflation, the run into the Swiss franc will start again.
Deflationary period (e.g. Corona Crisis)
During deflationary periods and recessions, the SNB will strongly intervene, similarly as she did in 2008/2009.
During the Corona Crisis, the SNB intervened at 1.05 – 1.06 for a euro, in 2009 even for 1.50 These high intervention levels pave the way for later losses, which are the inflationary periods.

Read More »