Currencies

Study Says The Gold Bugs are Right

Aug 23rd, 2015 | Filed under: Currencies, Forex, Gold, Hard metals, Risk management, Today's Post

Gold seems, to a larger extent than silver, and even more so to an extent larger than is true for palladium or platinum, to work as a true financial asset: decoupled from price developments in the commodity markets. It succeeds as a hedge against currency and stock-market trouble.


Eurekahedge: The Markets are Reading the Headlines

Aug 18th, 2015 | Filed under: Alpha Seekers, Alpha Strategies, Commodities, CTA, Currencies, Hedge Fund Strategies, Today's Post

In the three month period that ends with July, Eurekahedge’s Greater China Index (which has 85 constituents) is down 9.39%. That has come about for precisely the reasons that a reader of the pertinent headlines would guess.


Another Southeast Asia Currency Crisis

Aug 17th, 2015 | Filed under: Currencies, Emerging markets, Forex, Today's Post

China's moves in recent days seem likely to set off a new Southeast Asia currency crisis, which will look a lot like the old Southeast Asia currency crisis. This was clear even on August 11th, when traders in the rest of the world were apparently working on the premise that China's move that day was a one-off.


Commodities & Currencies From May to August: How Much Has Changed

Aug 12th, 2015 | Filed under: Commodities, Currencies, Insolvency, Today's Post

What a difference a summer makes! In May of this year it was still taken for granted that the "normalization" of Federal Reserve policy and so of U.S. interest rates approached. Now, that cannot even remotely be taken for granted.


The LIBOR Fixing Scandal Gets a Conviction and a Book

Aug 9th, 2015 | Filed under: Book review, Currencies, Derivatives, Forex, Today's Post

When it all hit the fan, U.S. investigators in particular (the Brits somewhat less so) came to see Hayes as a mastermind behind its digestive generation. But Arvedlund seeks in her new book on the Libor Rigging scandal to place the role Hayes played in context.


The Varoufakis Tape: Part Two

Aug 4th, 2015 | Filed under: AAA Newsreels, Currencies, Today's Post

Faille returns to the matter of a recorded conversation in which a former Greek finance minister talked about German ideas that ought to have the French government worried. Specifically, it is allegedly Werner Schäuble’s intention to scare the French into abandoning sovereignty. Greece is just a pawn.


The Varoufakis Tape: Part One

Aug 3rd, 2015 | Filed under: AAA Newsreels, Currencies, Today's Post

In a newly released recording (of a conversation apparently intended to remain secret somewhat longer), the former finance minister discussed the cloak-and-dagger task force that had drawn up plans for a Grexit. And, looking forward, he talked about German ideas that ought to have the French government worried.


Overtrading and the Danger of Pro Rata

Jul 30th, 2015 | Filed under: Algorithmic and high-frequency trading, Commodities, Currencies, Derivatives, Forex, Today's Post

Guest columnist Ginger Szala looks at pro rata and what happens if...


PwC on Mergers and Acquisitions Activity

Jul 28th, 2015 | Filed under: Agriculture, Alpha Strategies, Currencies, Today's Post

"Not moving is more risky than moving," said one CEO asked about mergers and acquisitions. "We will make more acquisitions, but they’ll probably be larger in nature, more transformative. "


Delivering Alpha Highlights: Part One

Jul 19th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, Conference report, Corporate governance, Currencies, ETFs, Media Coverage of Hedge Funds, Today's Post

Larry Fink is "deeply worried" that the combination of share repo with high-yield debt is "one of the reasons why we have a below trend-line economy. We're not investing in the future as much as we should." Carl Icahn, predictably, has a very different view of what ails us.


Predicting the Re-Creating of the Drachma

Jul 13th, 2015 | Filed under: Currencies, Insolvency, Today's Post

The prime minister has pushed aside the Greek Finance Minister, Varoufakis, and has replaced him with Tsakalatos. Is this change a matter of conciliation? or further defiance?


Bitcoin and Kin: The View from Europe

Jul 1st, 2015 | Filed under: Asset pricing, Currencies, Derivatives, Today's Post, Virtual currencies

Bitcoin's price charts nowadays seem to have settled into an equilibrium between $240 and $220 per. But ESMA, and the authorities in Sweden, are both paying attention.


Fractional Reserve Banking: From First Premises

Jun 24th, 2015 | Filed under: Currencies, Regulatory, Today's Post

Banks are in the liquidity transformation business, and that is a critical role. But the ossification of the institutions that perform that role, by tradition, assumption, and concomitant regulation, is a threat to its success.


Mladina on Peeling the Onion: Looking for Idiosyncratic Skill

Jun 21st, 2015 | Filed under: Currencies, Emerging markets, Indexes, Performance, Analytics & Metrics, Today's Post

Factor models will evolve as researchers untangle what value is to be attributed to what factor. Model selection, then, has to remain flexible to keep pace with such research, and must of course remain useful for the investment decision makers.


Banned in China: High Praise for a Statistics Textbook

May 13th, 2015 | Filed under: Currencies, Forex, Macroeconomics, Today's Post

At this moment, when news from China has turned sober and the monetary/fiscal authorities there seem torn by inconsistent goals, a tweet flutter has reminded us of a boring data-analysis text that was nixed by a publishing house in China for reasons of political sensitivity.


Eurekahedge on Asia in March, and on Asia Over the Years

Apr 28th, 2015 | Filed under: Currencies, Emerging markets, Hedge Fund Strategies, Indexes, Performance, Analytics & Metrics, Today's Post

According to Eurekahedge the hedge fund industry globally returned $54.1 billion in performance gains in the first quarter 2015. This is the greatest first-quarter gain since before the global financial crisis.


Griffin, Bernanke, and the Saud family

Apr 27th, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Currencies, Indexes, Macroeconomics, Today's Post

Why has Ken Griffin, the founder of Citadel, hired former Fed Chair Ben Bernanke as a Senior Advisor? This decision represents a surprise given Griffin's views on "quantitative easing," views he forcefully expressed a couple of years ago.


Some Assets are Hard to Ignore

Apr 23rd, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Currencies, Gold, Hard metals, Infrastructure, Today's Post

Guest columnist Diane Harrison looks at the world of alternatives to alternatives, including stamps, cars, farmland and more...


Larry Fink Thinks ‘The Market Is Wrong’ on Greece

Apr 19th, 2015 | Filed under: Alpha Strategies, Currencies, Today's Post

It is always dangerous to say (of any deep and liquid market) that the market is simply wrong in its valuations. Likewise, if you're sitting at a poker table and you don't know who the sucker is ....


John H. Makin, Hedge Fund Economist/Principal, Defender of U.S. Fed

Apr 8th, 2015 | Filed under: Academic Research, Alpha Hunters, Currencies, Forex, Today's Post

The impression one gets from some of the recent work of Dr. Makin is of a man who decided, late in life, that currency is a state invention, and that the states deputize their central banks to make sure the rest of us use it properly.


Zulauf Sees Unprecedented Risks: Zhou Fears Deflation

Apr 7th, 2015 | Filed under: Currencies, Emerging markets, Macroeconomics, Today's Post

Felix Zulauf is the principal of Zulauf Asset Management, and a former global strategist for the UBS Group. He said that central banks have intervened on such a large scale of late that they have left "global financial markets ... more distorted than ever before and accordingly the risks are very high."


M&A: a Continuing Trend According To Survey

Apr 1st, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Currencies, Today's Post

Intralinks is confident that the ongoing growth in M&A activity will continue through the 2d quarter, fueled by strong performances in EMEA and North America. In North America in particular the drivers include low interest rates and pressure on corporate honchos to generate growth in that low-rate environment.


The Next Big Thing: A Robotic ‘Nexus’ of Contracts

Mar 2nd, 2015 | Filed under: Currencies, Digital currencies, Regulatory, Technology, Today's Post

In some fairly routine middle-critter corporate roles, there may no longer be much need for human managerial involvement. Enter the self-running business entity: another big step toward the obsolescence of human beings some of whom, nonetheless, will get wealthy in the process.


Macroeconomics: The Mainstream and the … Banks

Feb 25th, 2015 | Filed under: Currencies, Macroeconomics, Today's Post

The trade cycle is not a central concern of the reigning general-equilibrium models in macroeconomics. To the extent such models do consider booms and busts, they largely reject money or credit based explanations.


Tsipras Marched Bravely Forward And … Surrendered

Feb 24th, 2015 | Filed under: Alpha Strategies, Currencies, Today's Post

The Greek prime minister's surrender to Germany and the troika has alienated much of his own base in Syriza. You can bet on it. Indeed, finding creative ways to bet on it looks like a sound alpha strategy now.


Meditations on the Eurozone and Secession

Feb 9th, 2015 | Filed under: Currencies, Macroeconomics, Today's Post

Is it possible for a country (let us not name names) currently employing the euro to introduce or re-introduce a fiat national currency with a variable exchange rate vis-à-vis the euro and without either a forced conversion of savings or catastrophe? Faille speculates on an approach.


Who Is Yanis Varoufakis? And Does it Matter?

Jan 27th, 2015 | Filed under: Academic Research, Currencies, Today's Post

Varoufakis believes in the single Eurozone currency. It is unlikely that the government that just appointed him Finance Minister plans to pull out of that zone and bring back the drachma.


Low Energy Prices: Crude and Refined Consequences

Jan 21st, 2015 | Filed under: Currencies, Hedge Fund Industry Trends, Hedge Fund Strategies, Indexes, Today's Post

Eurekahedge tells us that hedge funds were in the black 4.57% in 2014. That's hardly cause for celebration, since the MSCI World Index returned 6.79% over the same year. But all eyes now turn to the still-sliding price of oil.


ECB Beats SNB in race for the Bottom

Jan 19th, 2015 | Filed under: Algorithmic and high-frequency trading, Commodities, Currencies, Today's Post

An SNB announcement caused wild market moves Jan. 15th, not only in Forex but in commodity and equity prices as well. In the wake of the commotion, one key question has to be: why the announcement? Why this sudden change in the policy of Switzerland's central bankers?


The State of Alternative Currencies: Tokyo Police and Future Retailers

Jan 12th, 2015 | Filed under: Currencies, Digital currencies, Today's Post

The publisher of Laissez-Faire Books has made some news in the alternative-currency world, declaring that there is a “silver lining” to the various scams associated with such currencies, because cons tend to develop around industries with a bright future. That sounds like a bit of a stretch.


New Greek Political Crisis Looks Like the Old Greek Crises

Jan 7th, 2015 | Filed under: Alpha Strategies, Currencies, Indexes, Today's Post

The newly called snap elections in Greece will serve as a contest between pro-austerity and anti-austerity forces. Anti-austerity means abandoning the bail-out deal, and that position now seems the likely victor.


Don’t Blame the Swiss: Results Discounted Days Before Vote

Dec 8th, 2014 | Filed under: Commodities, Currencies, Forex, Gold, Hard metals, Today's Post

The price of gold took a swan dive as November ended, just as Swiss voters formally nixed an initiative that would have required the central bank to buy a lot of the stuff. Faille argues that this is not a matter of cause and effect. It is, on the other hand, a fascinating case study in the discounting machinery that is a market.


Extra! Extra! Central Banking the Disease It Affects to Cure

Nov 16th, 2014 | Filed under: Currencies, Forex, Today's Post

The release of Lord Grabiner's report provides evidence going well beyond the conclusions that Grabiner himself is willing to draw, and shows a central bank acting as a wink-and-nod clearing house.


Bitcoin: Three Bits of News on a Microcosm

Nov 13th, 2014 | Filed under: AAA Newsreels, Currencies, Technology, Today's Post, Virtual currencies

A bitcoin-mining fire, a survey of small and medium businesses and their levels of preparedness for bitcoin customers, and a new criminal accusation against an alleged ponzi scheme: all conribute to the sense that bitcoin is a microcosm of the whole financial world, good and bad.


Stop Draghi[ng] My Heart Around

Nov 9th, 2014 | Filed under: Behavioral finance, Currencies, Today's Post

Draghi and Yellen seem to be headed in opposite directions. One is revving up the money-creation engine, the other is 'tapering.' So why is Yellen so publicly supportive of Draghi? And what happened to the rebellion within the ECB?


November Vote: Do the Swiss Believe in Gold?

Oct 22nd, 2014 | Filed under: Currencies, Gold, Hard metals, Today's Post

The Swiss National Bank and the government oppose a pending referendum that would drastically change the country's policy on gold. But of course the anti-establishment nature of the petition is the whole point.


Bitcoin Miners: The Hammer and the Butterfly

Oct 6th, 2014 | Filed under: Currencies, Digital currencies, Editor's Pick, Forex, Today's Post

In the matter of a merchant selling computers that are supposed to mine bitcoin, the FTC alleges that the merchant is a sham, simply using the language of the bitcoin world to find suckers. But the agency might have gotten a bit ahead of itself here.


A Back-Handed Look at ‘Too Big to Fail’

Aug 27th, 2014 | Filed under: Alpha Hunters, Alpha Seekers, Currencies, Insolvency, Today's Post

The significance of the size of bank reserves and deposits as channels for the influence of QE upon macro-economic factors varies bank by bank. Monetary levers don't work on the really big rocks. A word on implications for the equity positions in those banks.


BIS to US Fed: You’re Messing with the World

Aug 25th, 2014 | Filed under: Currencies, Emerging markets, Forex, Today's Post

There are several channels for spill-over effects, whereby the actions of the Federal Reserve and the ECB can have grave consequences around the world. Psychological consequence, in particular herding, is among them.


A Brief History of the Direct Borrowing Power of the U.S. Treasury

Aug 24th, 2014 | Filed under: Currencies, Insolvency, Today's Post

The Federal Reserve practice of the direct purchase of bonds from the U.S. treasury has a fascinating history. Though there have been no direct purchases since 1981, the idea surely is not forgotten. Is indirect purchasing simply a better way for the sovereign and central bankers to assist their cronies?


Markets Work: The Argument from Robert Bork’s Beard

Aug 13th, 2014 | Filed under: Currencies, Hard metals, Today's Post

Markets work. We are warranted in believing this because it has proven itself in human history and we have studied history. Centralized social planning fails. Now, having said all that, let's talk about the Fed.


Volcker: ‘The Kind of Stuff You’re Being Taught’

Jul 17th, 2014 | Filed under: Asset pricing, Currencies, Today's Post

Paul Volcker is obviously entitled to express his concerns when he senses that the well-educated young people of today are taking economics courses full of the wrong lessons: specifically, that they are unaware of just how nasty a dragon inflation was in the U.S. in the 1970s.


Why Yellen is Wrong on ‘Resilience’

Jul 13th, 2014 | Filed under: Currencies, Emerging markets, Today's Post

The Chair of the Federal Reserve cannot with any plausibility look upon market bubbles as something exogenous, something that just happens to the earth, like a meteor shower, something from which she and others in her august circles can seek to protect us.


Japanese Investors Sticking with Hedge Funds, Expect Nikkei Rise

Jun 29th, 2014 | Filed under: Currencies, Hedge Fund Industry Trends, Performance, Analytics & Metrics, Today's Post

Why it is possible that the recent uptick in animal spirits in Japan comes largely from a sense that Abenomics as originally conceived has run its course, and that Abe and the rest of the gang there will have to move on shortly.


Could Crypto-currency Disrupt Money?

Jun 18th, 2014 | Filed under: Currencies, Today's Post, Virtual currencies

If the old line from Cabaret--"money makes the world go around"--is true, what happens when crypto-currencies go around the world? Vikas Shah explores the world of e-monies.


The End of Paper Money

Jun 8th, 2014 | Filed under: Currencies, Technology, Today's Post

Vikas Shah looks at the future of money--paper vs. electronic.


A Nordic View of Banking Union

May 20th, 2014 | Filed under: Currencies, Regulatory, Today's Post

Recently we discussed Dr. Stiglitz' view of the Eurozone, a view offered to an Italian audience, with Italy (and Greece) foremost in mind. Today we complement that with Deputy Governor Hakkarainen's view of the Eurozone. He looks down at the same map from the north, with Finland and Sweden foregrounded.


Stiglitz Against Austerity: For the Consolidation of Europe

May 14th, 2014 | Filed under: Currencies, Today's Post

Stiglitz seems to think the euro can be saved, but that the “structure” of Europe as a political entity has to change. His ideas for a reformed structure sound a lot like a consolidation of Europe into a single nation state.


Chopping Hedge Fund Data and Joining a Choir

May 13th, 2014 | Filed under: Alpha Strategies, Currencies, Indexes, Today's Post

The latest news from Eurekahedge shows a spotty performance for the global hedge fund industry in April, and generally in the year to date. The report also makes a casual remark about low inflation numbers that gives our Christopher Faille an opportunity to grouse about its Keynesian premises.


Payments, Technology, and a Curve with a Kink in It

May 11th, 2014 | Filed under: Academic Research, Alpha Hunters, Alpha Seekers, Currencies, Today's Post

On Barhydt's view, we have to see Bitcoin and other currencies like it as part of an evolution of the whole world of commerce, payments, and exchange, a vast movement of disintermediation that threatens to disrupt the banking and finance industries.