SNB & CHF

Investec Switzerland. © Vividrange | Dreamstime.com The value of the Swiss National Bank’s U.S. stock portfolio jumped to a record in June, helped by equity market gains. The holdings climbed to $61.8 billion from $54.5 billion at the end of March, according to calculations by Bloomberg based on the central bank’s regulatory filing to the U.S. Securities and Exchange Commission and published on...

Investec Switzerland. © Vividrange | Dreamstime.com The value of the Swiss National Bank’s U.S. stock portfolio jumped to a record in June, helped by equity market gains. The holdings climbed to $61.8 billion from $54.5 billion at the end of March, according to calculations by Bloomberg based on the central bank’s regulatory filing to the U.S. Securities and Exchange Commission and published on...

Summary: China’s excess capacity is one of the most formidable challenges the China and the world face. Unexpectedly, China’s steel industry reported a profit in H1 16. M&A for industry rationalization and foreign markets seem to be the main ways China is trying to address the excess capacity. Americans have a saying about an 800-pound gorilla in a room.  It refers to a person or organization so...

Swiss Franc The euro appreciated against both Swiss Franc and dollar. Swiss retail sales was again very weak, but emphasize our last month comment: The measurement of retail sales (and also GDP) ignore the active second-hand markets in Switzerland. The Swiss SVME PMI was at 50.1 close to contraction, another piece of bad data. Click to enlarge. FX Rates The US dollar is offered against the major currencies, but...

  “Bad” Monopolies? An argument against absolutely free markets comes up often. What about so-called natural monopolies? So-called infrastructure projects (e.g. sewage plants) have high barriers to entry, and are a challenge to true competition. Therefore, if left to private companies, they would become bad monopolies. So it is best for the government to provide them.  I think there are answers on several levels....

Summary: Service prices are rising, while goods prices have steadily fallen. Non-durable goods prices are stabilizing, while durable goods prices are still falling. The decline in durable goods prices is an important economic development. The rust line is service prices.  They are steadily increasing.  No deflation or disinflation here.  Think about rent, medical services, education, and entertainment. The three...