Tag Archives: newsletter

Swiss Franc EUR/CHF - Euro Swiss Franc, April 27(see more posts on EUR/CHF, ) - Click to enlarge FX Rates The ECB meeting and the press conference that follows it is the main event.  However, it has had to compete with the Bank of Japan and Riksbank meetings, as well as the further reflection of the tax reform proposals by the Trump Administration yesterday.  Also, after a misdirection over pulling out of...

Summary: Draghi confirms rate on hold and maintains easing bias. Growth risks are becoming more balanced. Inflation has yet to get on a sustained upward path. As widely expected, the ECB left its key rates and asset purchase plan intact. It reiterated its forward guidance that rates will remain at present levels or lower. Draghi was more confident about the economy, suggesting that the downside risks had...

Retail Debt Debacles The retail sector has replaced the oil sector in a sense, and not in a good way. It is the sector that is most likely to see a large surge in bankruptcies this year. Junk bonds issued by retailers are performing dismally, and within the group the bonds of companies that were subject to leveraged buyouts by private equity firms seem to be doing the worst (a function of their outsized debt loads)....

Who’s going to pay bubble-valuation prices for the millions of suburban homes Baby Boomers will be off-loading in the coming decade as they retire/ downsize? Longtime readers know I follow the work of urbanist Richard Florida, whose recent book was the topic of Are Cities the Incubators of Decentralized Solutions?(March 14, 2017). Florida’s thesis–that urban zones are the primary incubators of technological and...

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 increases, while REER assumes constant productivity in comparison to trade partners. On the other side, a rising trade surplus may also be caused by a higher savings rate while the trade partners decided to...

Swiss Franc EURCHF - Euro Swiss Franc, April 26(see more posts on EUR/CHF, ) - Click to enlarge GBP/CHF Last week Theresa May called a snap General election due to take place on 8th June. Historically a snap election has caused the currency in question to weaken, however on this occasion Sterling strengthened. It was a shrewd move by May to call an election while the competition is so weak. A conservative...

  Slightly Premature Victory Laps The nightmare of nightmares of the globalist elites and France’s political establishment has been avoided: as the polls had indicated, Emmanuel Macron and Marine Le Pen are moving on to the run-off election; Jean-Luc Mélenchon’s late surge in popularity did not suffice to make him a contender – it did however push the established Socialist Party deeper into the dustbin of history. That...

We’ve been persuaded that the state-cartel Plantation Economy is “capitalist,” but it isn’t. It’s a rentier skimming machine. I have often discussed the manner in which the U.S. economy is a Plantation Economy, meaning it has a built-in financial hierarchy with corporations at the top dominating a vast populace of debt-serfs/ wage slaves with little functional freedom to escape the system’s neofeudal bonds. Since I...

The Swiss consumption indicator by UBS shows improvements. The indicator is still distant from the highs in 2012. At the time stronger growth in Emerging Markets and the weaker franc helped the Swiss economy. The UBS consumption indicator registered at 1.50 points in March, indicating private consumption growth around the long-term average. Solid automotive demand drove this figure. Domestic tourism, on the other...

See the introduction and the video for the terms gold basis, co-basis, backwardation and contango. The Mathematics of Frexitology This was also a holiday-shorted week. As we write this, the big news comes from the election in France. The leading candidate is a banker named Emmanuel Macron, with about 24% of the vote in a 4-candidate race. The anti-euro Marine Le Pen came in second with just over 21%. From the sharp...