Tag Archives: China

The US dollar’s downtrend is extending.  The euro traded above $1.16 for the first time since last August. With Japanese markets closed for the second half of the Golden Week holidays, perhaps participants felt less hampered by the risk of intervention and pushed the dollar to almost JPY105.50.  Despite an unexpectedly large fall in the UK’s manufacturing PMI (49.2 from 50.7), sterling has pushed to its highest level in four months (~$1.4770). The Australian dollar is the main exception. ...

Yesterday, China announced one of the most important tax reforms of the past twenty years.  It is replacing a business tax on gross revenue for non-manufacturing companies with a VAT.   Manufacturing companies have been subject to a VAT approach for a few years.  The reform extends it from manufacturing and a few services in a pilot program to industry-wide application. It will now cover construction, real estate, finance and consumer services. The shift to the VAT is expected to reduce...

In an interesting interview with Finanz und Wirtschaft, Bianco Research president Jim Bianco discusses a variety of topics such as negative interest rates turning the entire credit process upside down, bank balance sheets being even more complex and concentrated than before the financial crisis, energy loans being an accident waiting to happen, the markets having veto power over the Fed, and gold having more room to run. * * * Mr. Bianco, negative interest are causing a lot of stir at the...

Nice sentence: Tears won’t be confined to Wall Street however: let’s not forget that none other than the Swiss National Bank is also long some 10.4 million shares of AAPL. First it was the banks reporting horrendous numbers — largely, we were told, because of their exposure to recently-cratered energy companies. Now it’s Big Tech, which is a much harder thing to explain. The FAANGs (Facebook, Apple, Amazon, Netflix and Google) own their niches and not so long ago were expected to...

Economic forecasting, no matter how complex the underlying model may be, is essentially about extrapolating historical trends. We showed last week how economic models completely fail to pick up on structural shifts using Japan as an example. On the other hand, if an economy doesn’t really change much, as in the case of Australia over the last thirty years, model “forecast” are generally quite accurate. However, spending millions of dollars to do the job of a ruler doesn’t seem like wise...

The global economy struggled through a difficult year in 2015, leaving a range of challenges for policymakers hoping to avoid a third leg of the financial crisis, panelists at the Credit Suisse 2016 Asian Investment Conference (AIC) said.   The Federal Reserve’s moderation in monetary tightening is crucial to sustaining fragile global economic growth in 2016, while structural reforms in China, India, and other countries are essential if struggling emerging economies are to regain their...

Politicians around the world are working hard to build this emerging prison planet. But it’s still possible to escape. We recently released a video to show you how. Click here to watch it now. If you’ve never heard of the Foreign Account Tax Compliance Act (FATCA), you’re not alone. Few people have, and even fewer fully grasp the terrible things it foreshadows. FATCA is a U.S. law that forces every financial institution in the world to give the IRS information about its American...

Macroview As growth fails to attain a stronger trajectory and deflation remains a threat, the credibility of central banks has begun to suffer. Yet we remain relatively upbeat on prospects for world growth although we expect continued volatility in some asset classes. April insights from Pictet Wealth Management's Asset Allocation & Macro Research team The current decline in US profit margins would usually herald a recession. The continued decline in earnings expectations is a concern,...

Earlier today, China launched its first gold fix.  It will offer a fixing twice a day going forward yuan. The Shanghai Gold Exchange established the fix the same way it is done in London and New York, by prices submitted by financial institutions.  In China’s case, 18 institutions, including two foreign banks, participate in the process. The key question for investors is if there is some larger implication of this development that they should be aware?    China is the world’s largest...

There has been much confusion, at time quite angry, how in the aftermath of the Soros-funded Panama Papers revelations few, if any, prominent U.S. name emerged as a result of the biggest offshore tax leak in history. Now, thanks to McClatchy more U.S. names are finally being revealed and it will probably come as little surprise that many of the newly revealed names have connection to both Bill and Hillary Clinton. Connections to Bill and Hillary Clinton As McClatchy writes, donors to...