SNB & CHF

Wicked Don Giovanni GUALFIN, Argentina – Tuesday evening, we went to the main opera house in Buenos Aires, the Teatro Colón, to see Mozart’s Don Giovanni. On our way over, our taxi driver told us that Luciano Pavarotti rated it as the second best opera house in the world (after La Scala in Milan). The Teatro Colón in Buenos Aires. Sorry, chaps, only second best. Still, that makes it the best this side of the great pond. Photo credit: Arnaldo Colombaroli Your editor’s wife has a tendency...

What Differentiates Gold from Silver? Well that was an interesting week. Gold went down over thirty bucks and silver went up over thirty cents. How much longer can this silver rally continue in the face of gold’s non-participation? Will speculators really be comfortable bidding silver up to $20 while gold sits at $1200? Do the fundamentals support a higher silver price? Gold, active June futures contract over the past week – click to enlarge. How is silver different from gold? Aside...

Oil producers failed to reach an agreement yesterday at the meeting in Doha.  That is the main spur to today’s activity.  It is not that the outcome was a surprise.  One newswire poll found around half of the respondents thought an agreement was elusive.   Although not oil experts by any stretch, we too thought political considerations made it unlikely that Saudi Arabia would be willing to sacrifice market share to its rival Iran.  We also understood why Iran could not accept a freeze on...

It is never easy, but the week ahead may be particularly difficult for market participants. It will first have to respond to weekend developments.   First, the front page of the NY Times on Saturday was a report that the Saudi Arabia warned the US if a bill making its way through Congress that would allow it (Saudi Arabia) to be held responsible in American court for the terrorist strike on 9/1, the sheikdom would forced to sell its Treasury holdings, and other US assets, which otherwise...

Speculators were undeterred by the threat of BOJ intervention. In the CFTC reporting period ending April 12, speculators boosted their net and gross long yen positions to new record highs. The bulls added 2k contracts to their gross long position to give them 100.1k yen futures contracts. The bulls, who had tried picking a bottom over the past two reporting periods, gave up and reduced their gross short position by 4.1k contracts to 33.9k. The resulted in a 6k increase in the net long...

Barely a day had passed since the historic admission of gold and silver price rigging by Deutsche bank, which as we reported on Thursday was settled with not only "valuable monetary consideration", but Deutsche's "cooperation in pursuing claims" against other members of the cartel, i.e., exposing the manipulation of other cartel members, and the class action lawsuits have begun. Overnight, two class action lawsuits seeking $1 billion in damages on behalf of Canadian gold and silver...

The US dollar turned in a mixed performance last week, which given the softer than expected inflation, retail sales data, and industrial output figures, coupled with the poor technical backdrop, could be a signal that its decline in recent months has run its course.    The dollar-bloc continued its advance, led by the Australian dollar’s nearly 2% gain.   Higher commodity prices (the sixth weekly advance for the CRB Index in the last eight week) may have helped.  The persistent strength...

  Consumer Ambivalence Photo credit: Pixelrobot What’s up with U.S. consumers?  They seem to have come to their senses at the worst possible time.  They can no longer be counted on to push economic growth up and to the right.  Specifically, they’re not spending money on stuff.A little public service on etymology: “Double whammy” was reportedly first used in a 1941 Oakland Tribune article related to boxing. It means a devastating blow, setback or catastrophe. In today’s economy, it often...

A year ago today, European equities hit their highest levels ever. But, as Bloomberg reports, the euphoria about Mario Draghi’s stimulus program didn’t last, and trader skepticism is now rampant. The Stoxx Europe 600 Index has lost 17% since its record, and investors who piled in last year are now unwinding bets at the fastest rate since 2013 as analysts predict an earnings contraction. The trading pattern looks familiar: a fast run to just over 400 on the gauge, then disaster... To...

At the IMF/World Bank meetings this week, Chinese officials are again pushing for greater use of the IMF’s unit of account, Special Drawing Rights.   It is China’s turn as the rotating host of the G20, which gives it greater influence over its agenda. For its part, the IMF is concerned about global financial stability and must be open-minded.  It wants to strengthen the financial system.   It is only prudent to examine all reform ideas. Last September, the IMF agreed to include the yuan...