Tag Archives: newsletter

Summary: China’s trade concessions seem modest, but little discussion of US concessions. Reports suggest Trump is set to sign a new executive order to investigate trade practices in steel, aluminum, and maybe household appliances. Trade imbalances and floating currencies are not mutually exclusive. Last week’s meeting between the US and China’s Presidents did not produce much fireworks or headlines. The...

Where’s the growth going to come from as the dominant generation makes less, borrows less, spends less, saves more and turns away from long commutes, malls and suburban living and abandons the worship of private vehicles? If anything defined the postwar economy between 1946 and 1999, it was the exodus of the middle class from cities to suburbs and the glorification of what Jim Kunstler calls Happy Motoring: freeways,...

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...

The Swiss National Bank has updated its exchange rate indices. In an SNB Economic Studies paper, Robert Müller describes how. The upshot is that the SNB considers the Swiss Franc slightly less overvalued than before. From the abstract: The key aspects of the revision are: the application of the weighting method used by the IMF, which takes into account so-called third-market effects; continuous updating of the...

Daniel Humm – Source: Facebook_chefdanielhumm 24 Heures. A Swiss chef from Aargau came first in this year’s ranking of the world’s 50 best restaurants. Daniel Humm, co-owner of the restaurant Eleven Madison Park, comes from Strengelbach in Switzerland, and earned his first Michelin star at 24. In 2003, he moved to the United States to become a chef at Campton Place in San Francisco. Three years later, he moved to New...

Swiss Franc EUR/CHF - Euro Swiss Franc, April 12(see more posts on EUR/CHF, ) - Click to enlarge FX Rates Markets are calmer today.  The significant movers yesterday have stabilized.  The dollar has been unable to resurface above JPY110, but after plumbing to new lows near JPY109.35 in Asia, the dollar has recovered back levels since in North America late yesterday.   The decline in the US 10-year yield was...

Bundesrepublik Deutscheland Finanzagentur GmbH (German Finance Agency) was created on September 19, 2000, in order to manage the German government’s short run liquidity needs. GFA took over the task after three separate agencies (Federal Ministry of Finance, Federal Securities Administration, and Deutsche Bundesbank) had previously shared responsibility for it. On September 17, 2014, almost exactly fourteen years...

Summary: FOMC minutes increased likelihood that Fed will begin reducing its balance sheet late this year. There does not seem to be a consensus on other issues. The strength of the ADP report contrasts with softness seen in the ISM and PMI non-manufacturing surveys. The FOMC minutes were clear that officials are contemplating beginning address the balance sheet, which is another sign of confidence in the...

See the introduction and the video for the terms gold basis, co-basis, backwardation and contango. Input Data Errors Dear Readers, I owe you an apology. I made a mistake. I am writing this letter in the first person, because I made the mistake. Let me explain what happened. I wrote software to calculate the gold basis and co-basis (and of course silver too). The app does not just calculate the near contract. It...

There were no celebrations; no horn or trumpets, nary a sound, but an important shift took place last week. The shift was signaled by two events. The first was the US strike on Syria, and the second was investors’ willingness to look past Q1 economic data. The US missile strike on Syria was significant even if it fails to change the dynamics on the ground. It undermines the Trump Administration’s ability to “reset” the...