Tag Archives: newsletter

Sometimes the mountain looks clearer from the plain the summit to paraphrase a American-Lebanese poet.   The dollar appears to have entered a new phase on May 3.  On that day, it reversed higher against the euro, yen, and sterling for lows not seen in a while.     It is tempting to construct a fundamental narrative for the change.  However, the usual drivers are noticeable by their absence.  The US economic data has been mixed, including the employment report that often sets the tone for...

The current financial market volatility increasingly reflects loss of faith in policy makers. Celebrity central bankers are learning that they must constantly produce new miracles for their followers. First, the measures implemented since 2009 created an artificial stability and an asset price boom in many markets. But the absolute rate of GDP expansion and level of price changes is inadequate to solve global debt problems. Second, new initiatives seem the risky response of clever...

  Political Correctness Comedy How to most effectively create a “safe space” on campus Cartoon by Nate Beeler We have recently come across a video that is simply too funny not be shared. It also happens to dovetail nicely with our friend Claudio’s recent essay on political correctness and cultural Marxism. Since this is generally a rather depressing topic, we have concluded that having a good laugh at it might not be the worst idea. It is especially funny (or terrifying, depending on...

A Loss of Momentum Photo credit: R.P. Visual The price of gold moved down slightly this week, while that of silver dropped more substantially—1.9%. We don’t see much decrease in the enthusiasm yet from this minor setback. This was a shortened week due to the May Day holiday outside the US. Let’s look at the only true picture of supply and demand fundamentals. Gold and silver prices. First, here’s the graph of the metals’ prices. Gold and silver prices – click to enlarge....

A Sudden Turn for the Worse Freddie Mac HQ – a strange time for posting losses Photo via nytstyle.com Freddie Mac posted a loss of $354 million this quarter, versus a $2.16 billion gain the previous quarter.  Fannie Mae did slightly better with net earnings of $1.1 billion, which were still substantially down from $2.5 billion the previous quarter though. Instead of delving into the entrails of the financial statements, I would like to ask a broader question:  Why is Freddie reporting...

“At the end of the day, negative interest rates are taxes in sheep’s clothing. Few economists would ever claim that raising taxes on households will stimulate spending. So why would they think negative interest rates will?” Those are the shocking words of St.Louis Fed Director of Research Christopher Waller whose brief note today will be required reading for everyone at The Bank of Japan, The ECB and every other central banker on the verge of NIRP… If you pick up any principles of...

09.05.2016 09:15  – FSO, Prices (0353-1604-90) Swiss Consumer Price Index in April 2016 Consumer prices increase by 0.3% Neuchâtel, 09.05.2016 (FSO) – The Swiss Consumer Price Index increased by 0.3% in April 2016 compared with the previous month, reaching 100.4 points (December 2015=100). Inflation was -0.4% in comparison with the same month in the previous year. These are the findings of the Federal Statistical Office (FSO). Download this press release (pdf, 129 KB) Bericht CD Bund...

Swiss Consumer Price Index in April 2016 For the second time in a row prices in Switzerland increased by 0.3% against the previous month. Inflation was -0.4% against last year. Still in 2015 inflation was mostly around -1.5% y/y. Will this rising price tendency continue? It will be surely a problem for the SNB. They might need a stronger franc to keep inflation in check. The Swiss asset price bubble has not found yet its way into higher rents. Switzerland has pretty strict...

The SNB increased the equities share from 18% to 20% in Q1/2016. Purchases focused on US equities.It raised holdings in U.S. Equities 32 percent in the first Q1 2016, from $41.3 billion at the end of last year. The S&P 500 rose 0.8 percent over that period. This makes obvious that the central bank goes higher risk. The first risk is the risk on equities, the second one is the dollar that is currently quite expensive. Main Positions: Swiss National Bank, 2007-2013 Still in 2009, the...

The key issue facing the foreign exchange market is whether the modicum of strength the US dollar demonstrated last week is the beginning of a sustainable move.  It is possible that the market is again at a juncture in which the price action will drive the narrative rather than the other way around.  A move above JPY108 and a decline in the euro below $1.1350 signal a start to a broader dollar recovery that may have begun last week with impressive gains against the dollar-bloc. The RBA’s...