Tag Archives: newsletter

  The Cracks in the Economy’s Foundation Become Bigger Decay… Photo credit: bargewanderlust Last week the Bureau of Economic Analysis has updated its gross output data for US industries until the end of Q4 2015. Unfortunately these data are only available with a considerable lag, but they used to be published only once every few years in the past, so the current situation represents a significant improvement. As Ned Piplovic summarizes in his update on the situation on Dr. Mark...

My name is noMy sign is noMy number is noYou need to let it goDebt relief is noGerman stimulus is noECB  easing is noYou need to let it go  German Finance Minister Schaeuble appears to have taken on a new role:  chief obstructionist.  Schaeuble seems to be reveling in the fact that due to Chancellor Merkel’s immigration stance, and perhaps also because of her accommodation of Turkey, her public support has fallen below his.   According to a recent ZDF poll, Merkel is now the fifth most...

There is a debate.  On one hand is Summers, who argues that modern economies have entered an era of secular stagnation.  Full utilization of the factors of production and particularly capital and labor is not possible without stimulating aggregate demand in a way that facilitates bubbles.  The broad strokes of the argument can be found implicitly or explicitly in much of the commentary and economic analysis. The other side of the debate includes economists like Bernanke, and Rogoff and...

The gains the US dollar registered in the second half are being pared, but it is sterling’s strength that stands out.  It is difficult to attribute it to Obama’s push against Brexit, but there does appear to have been a change in sentiment. Sterling is the best-performing currency not only today but for the past five sessions, rising 1.25% against the US dollar to its best level since mid-February.  The next target is $1.4600 and $1.4670, the high from early February.  Sterling is rising...

  The Largest Online Marketplace in the World This company is twice the size of Enron at its peak ($100 billion). Pharmaceutical giant Valeant, which blew up in the last year, was only $90 billion at its peak. Before I get to what the stock is, let me tell you where it is: China. CEO Jack Ma, wagging a finger (bad sign) Photo credit: Kiyoshi Ota / Bloomberg I recently heard an excellent presentation by Anne Stevenson-Yang at Grant’s Spring Investment conference. Stevenson-Yang is the...

Headlines April 2016 Speculative position: Speculators are even longer CHF:  +9410x 125K contracts.Sight Deposits: SNB intervenes for 6.4 bln. CHF in only three weeks. Sight deposits (aka debt) are rising by 1% per month, this is 12% per year. The SNB can never achieve such a yield on investment, her yield is between 1 and 2 percent.6.4 billion is the highest level since January 2016. Why the SNB is driving the EUR/CHF so high is a question, given that both real money and speculators are...

We expect the FOMC statement this week to recognize the improvement in the global conditions that have been an increasing worry for officials over Q1.  At the same, time the soft patch of the US economy is undeniable. We suspect the Fed will look past the weakness of the US economy. The strength of the labor market, with weekly initial jobless claims at their lowest level since 1973 and continuing claims at their lowest level since 2000, it is difficult to get too negative the US...

EM ended last week on a soft note.  Perhaps the main driver was rising US yields, as markets become wary of a more hawkish Fed this Wednesday.  Perhaps it was technical, as the EM rally became over-extended.  Whatever the reasoning, the correction continued into the weekend and is likely to carry over to this week as well.  While we remain cautious on EM at such rich valuations, a significant correction (which we have not seen in quite some time) could make some assets more attractive. ...

The US dollar starts what promises to be an eventful week giving back some the gains score in second half of last week against the euro and yen.    Equity markets are extending their pre-weekend losses.   Commodities are also trading with a heavier bias.  Markets in Australia, New Zealand, and Italy are closed for national holidays. The consolidative tone may not be very surprising give the data to be released in the coming days and the FOMC and BOJ meetings.  Investors will see the first...

  Insulting Mr. Erdoğan Can Be Dangerous Most of our readers are probably aware by now that the German government finds itself in a rather awkward situation over its relations with Turkey’s government again – with which the EU has just struck a widely criticized and very expensive deal to help it stem the flood of refugees. One thing is absolutely certain about Turkey’s president Recep Tayyip Erdoğan: He has no sense of humor whatsoever.  As of early March 2016, 1,845 lawsuits were pending...