My own quite speculative view is that Europe as a project is coming apart, and that some of the constituent nations may split into underlying parts in the process, but that this is happening slowly and messily so the world is as yet far from seeing any new equilibrium.
The need for risk management in general and, more specifically, the inability of HNW Chinese otherwise to hedge against RMB exchange risk, is driving them to invest overseas.
In January 2013 the Council of the European Union agreed to allow 11 member states to institute a sweeping financial transaction tax as a matter of "enhanced cooperation." Now, a year later, the EU's tax commissioner, a one-time enthusiast of the idea, is signaling compromise.
There is something inherently perilous in choosing the recipient of any important post by reliance upon the most impressive resume: by that method you can get an endless supply of insiders, confirming that the inside is always the right side.
The good news is that there is a general consensus that QE-infinity is not sustainable. "The notion that QE has distortionary effects is widely accepted," says the CSAM white paper.
The key to understanding the mechanics of bitcoin is that at ten minute intervals the 'miners' gather up the recent proposed transactions and try to add them to the block chain, the universal ledger of bitcoin transactions.
A big story came with Beijing and London datelines on Tuesday, October 15: a deal that may make the City of London a major trading hub in the Chinese yuan, while making life easier for British investors who want to invest directly in China. What does this mean for the U.S. dollar?
In his WSJ piece on Oct. 4, Ferguson said that the "fiscal arithmetic of excessive federal borrowing is nasty even when relatively optimistic assumptions are made about growth and interest rates." Although he made a noteworthy error in expounding on this point, the point itself is solid and important.
Both the total population of ultra high net worth individuals in the world and the amount of wealth they together represent have increased over the past year. The latter metric increased by a little less than $2 trillion.
Christopher Faille talks to James Rickards about U.S.-Russia relations, as Russia reaches parity with the U.S. in the gold-to-GDP ratio.
The key to an equity hedge strategy in the U.S. at present is that “the basket of those stocks generating healthy profits becomes clearer to differentiate from those that are having trouble doing so” through the earnings season. PrevInvest is moderately bullish on this, but not bullish on an event-driven strategy.
We pause to mark the death of a man who, more than any other, was responsible for the creation of a spot market in crude oil in the hectic period after the Yom Kippur War.
Mosler is perfectly willing to have governments create money for their own spending. He does not see that as necessarily inflationary, apparently because the same governments can always tamp down on inflation through the tax system.
The dispute framed by a June 3d debate at Columbia Law School will define the future (and no very-distant future either) of economic policy in the western world and of the fate of all the currencies involved. The question will be: after Keynes, what? We owe thanks to everybody involved in arranging for the Murphy/Mosler debate.
The ongoing process in Europe of bumbling from one crisis to another, with the increase in the centrality and centralization of the ECB that it has brought, may both fatigue and invigorate many of the participants but the image it brings to my mind is of a line of firecrackers setting each other off, each louder than the one before, without apparent end.
Facile parallels notwithstanding, neither the argument Druckenmiller made at Sohn nor any other good reasons that may now exist for shorting the Aussie have a lot to do with the case against the pound in 1992. That tug-of-war occurred in a unique context, not here replicated.
The great success of the Thatcher-era Big Bang was that it shocked the Square Mile out of insularity. The turnover and value of London-based equity transactions increased from roughly £500 million in 1986 to more than £2 billion nine years later.
The present global monetary situation, plainly, is not at equilibrium. Everybody else’s currencies depend upon the dollar, the dollar depends upon petroleum, and petroleum depends upon … whatever. Changes will continue (through a succession of crises if no other way can be developed) until a new equilibrium can be attained.
The notion of a flight to safety has never before sounded so paradoxical. The impending fiscal cliff illustrates the unsustainable fiscal position of the U.S. Treasury, and the uncertainties this creates may generate a flight to the presumed safety of ... U.S. Treasuries.
Either Portugal or Italy could kick off a move toward the use of gold as collateral for sovereign debts. Each country has significant supplies of the stuff. Portugal, for example, has 383 metric tons, equaling 90 percent of its foreign reserves.
IMF economist Manmohan Singh, in a recent working paper for the IMF, makes a case that pledged collateral is a critical financial lubricant, and that since the collapse of Lehman in September 2008 there has been a significant and troubling decline in its supply. Certain measures intended by regulators to enhance financial stability may in fact undermine it, by worsening the supply/demand mismatch, in effect creating a grey market for this pledged collateral.
Financial crises always turn up new risks – and new opportunities. Famously, George Soros bet against the Bank of England during a fiscally challenged time in the early 1990s and pocketed a billion and change for his troubles. Was that a spectacular guess in a geopolitical game of chicken, or was it true alpha? We don't know, because we don't have the data. Currencies didn't much matter then; they do now.
The Commodity Customer Coalition has now issued a white paper presenting its own view of the “background, impacts, and solutions to MF Global’s Demise.”
Chris Brodie has been trading commodities for over 20 years, and set up Krom River in 2006. Scotsman Brodie relocated to Zug in Switzerland several years ago and has no regrets about the move. The fund’s best year so far was 2008 when it rose by 37% while the GSCI fell by two thirds, and it was also up in August of this year. Krom River are running both discretionary and systematic funds, and also have a dedicated agricultural vehicle. We touched on a range of topics that CAIA candidates and charterholders will be familiar with. Krom River is a signatory of the Hedge Fund Standards Board that has been discussed on AAA.
By Christopher Faille Passive and active investments are often contrasted as if the distinction is self-evident. It isn’t. Even for an unambitious long-only equity indexed fund, trades have to be executed in order to maintain the desired balance, and these trades can be executed either well or poorly, in ways that help or hurt the [...]