Monthly Archive: March 2020

Coronavirus: the fallibility of fatality rates

2020-03-28

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2020-03-28

Naturally, many of us would like to know the fatality rate of Covid-19. But at this stage it is guesswork. Here are some of the problems with two of the most popular fatality rates. The most popular calculation involves dividing the number deaths by the number of cases. Epidemiologists call this a naive case fatality rate (CFR). There are two ways to calculate this rate.

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No Further Comment Necessary At This Point

2020-03-28

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2020-03-28

Primary Dealer Repo Fails (UST), 2017-2020
I would write something snarky about bank reserves, but why bother at this point? It’s already been said. If Jay Powell doesn’t mention collateral, no one else does even though it’s the whole ballgame right now. Note: FRBNY’s updated figures shown below are for last week.

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Diversification versus Risk

2020-03-28

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2020-03-28

It is widely held that financial asset prices fully reflect all available and relevant information, and that adjustments to new information is virtually instantaneous. This way of thinking which is known as the Efficient Market Hypothesis (EMH) is closely linked with the modern portfolio theory (MPT), which postulates that market participants are at least as good at price forecasting as any model that a financial market scholar can come up with,...

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Corona-Krise – Eine machbare, vertretbare Lösung

2020-03-28

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2020-03-28

Nachdem ich mich systematisch mit den verschiedenen Teilproblemen beschäftigt habe, bin ich nun überzeugt, eine machbare, vertretbare und rasche Lösung für das Corona-Problem gefunden zu haben.

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FX Daily, March 27: Nervousness Ahead of the Weekend

2020-03-27

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2020-03-27

Overview: Officials appear to have persuaded investors that they have put into place measures that will cushion the economic blow and ensure that the financial system continues to function. After seemingly goading officials into action, investors are choosing not to resist. Moreover, there is a recognition that many programs are scalable.

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USD/CHF Price Analysis: Dollar easing further from monthly tops, approaching 0.9600 figure vs. CHF

2020-03-27

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2020-03-27

USD/CHF daily chart
USD/CHF is trading down for the fourth consecutive day. The level to beat for bears is the 0.9600 support. USD/CHF is easing from the monthly highs as the spot drops below the main SMAs on the daily chart. The US dollar is down against most currencies this Thursday.

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Coronavirus: a test to see if you’ve had it is in the pipeline

2020-03-27

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2020-03-27

Coronavirus testing has been rationed in Switzerland, reserving it for high risk more severe cases, although doctors retain discretion to have anyone tested. It is likely those that have been infected and have recovered will have immunity and no longer be able to act as carriers of the disease.

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ECB Approaching its Bazooka Moment

2020-03-27

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2020-03-27

ECB Balance Sheet Total Assets, 2010-2019
The ECB appears to be moving closer to activating Outright Monetary Transactions (OMT).  Despite being part of Draghi’s “whatever it takes” moment, OMT has never been used.  If the Fed’s open-ended QE is seen as dollar-negative, then OMT should be seen as euro-negative.

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Is gold still a safe haven?

2020-03-27

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2020-03-27

There have been moments in recent months when many gold owners, myself included, have asked themselves whether gold might have lost its safe haven status, at least in the western world. Was it enough for two generations, who grew up in a paper money system, to forget the history and the 5000-year-old status of gold as real money? 

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Central Bankers Are Running Out of Options

2020-03-27

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2020-03-27

Corona fears have shifted the world’s central banks into hyperdrive. Talk more, do more, lend more—and buy everything that moves. One after the other, the major central banks took to the barricades, manned the canons, fired their bazookas, and every other military metaphor you can think of.

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FX Daily, March 26: Rumor Bought, Fact Sold

2020-03-26

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2020-03-26

Overview: Speculation that the US Senate would pass the large stimulus bill worth around 10% of US GDP is thought to have fueled a bounce in equities in recent days. The bill was approved and will now go to the House, where a vote is expected tomorrow. If the rumor was bought, the fact has been sold. The first to crack was the Asia Pacific region.

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Was mache ich wenn ich 1’000’000 CHF Nettovermögen erreiche? ???‍♂️

2020-03-26

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2020-03-26

Diese Frage stelle ich mir tatsächlich sehr selten, aber Bekannte und Freunde fragen gerne mal. Was machst du wenn du die 1‘000‘000 CHF Nettovermögen erreichst? Kaufst du dir dann zur Feier etwas? Meine Antwort ist immer etwas ernüchternd, es geht normal weiter wie bisher, es ist nur eine Zahl.

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FINMA unterstützt das Liquiditätspaket des Bundesrats und rollt weitere Massnahmen aus

2020-03-26

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2020-03-26

Die Eidgenössische Finanzmarktaufsicht FINMA begrüsst ausdrücklich das heute vom Bundesrat verabschiedete Massnahmenpaket des Bundes. Dieses sieht eine rasche und unbürokratische Versorgung der Realwirtschaft mit Liquidität via die Banken vor. Um die bestehende Robustheit der Schweizer Finanzinstitute beizubehalten, ruft die FINMA diese zu einer umsichtigen Ausschüttungspolitik auf.

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Corona-Krise: SNB stellt Banken zusätzliche Liquidität zur Verfügung

2020-03-26

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2020-03-26

Der Bund, die Nationalbank (SNB und die Eidgenössische Finanzmarktaufsicht (FINMA) haben infolge der schweren Belastung der Schweizer Wirtschaft durch die Corona-Pandemie gemeinsam mit den Banken ein Massnahmenpaket geschnürt. In diesem Rahmen führt die SNB die neue SNB-COVID-19-Refinanzierungsfazilität (CRF) ein.

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Global curbs on medical exports imperil poor nations

2020-03-26

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2020-03-26

Around 50 countries have introduced curbs on exports of medical supplies, including ventilators. This poses a major risk for poor countries, a Swiss study has revealed. The past fortnight has seen nations around the world scrambling for medical supplies and equipment to combat the fast-spreading coronavirus.

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The European Central Bank Is Being Stretched to Its Breaking Point in Italy

2020-03-26

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2020-03-26

Investment/GDP in Italy, 2000-2019
When Mario Draghi’s tenure was approaching its end, I argued for a sterner governor for the European Central Bank (ECB); hence, I was not even slightly enthusiastic when Draghi’s successor turned out to be Christine Lagarde—a patent dove, as can be inferred from her ideological proximity to a famous Keynesian like Olivier Blanchard.

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The Pandemic Is Accelerating the Breakdown That Began a Decade Ago

2020-03-26

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2020-03-26

Personal Savings Rate, 1960-2020
The feedback loop has reversed: by saving more, people will spend, borrow and speculate less, draining the fuel from any broadbased expansion. In eras of confidence and certainty, people save less and spend more freely. 

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Diseases Are Bad. Government-Forced Shutdowns Are Often Worse.

2020-03-26

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2020-03-26

However high the death rate of the COVID-19 coronavirus becomes, the governmental response to the threat will be even more dangerous. If the current blockade of economic life continues, more people will die from the countermeasures than from the virus itself. In a short time, the basic supply of everyday goods will be at risk. By interrupting the global transport and supply chains, important medicines will be missing and food supplies will be...

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SNB sets up refinancing facility and deactivates counter-cyclical buffer

2020-03-25

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2020-03-25

There is no upper limit for virus fund. Drawdowns can be made at any time. Says interest rates to correspond to the SNB policy rate (-0.50%). Will be available from tomorrow.

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FX Daily, March 25: Relief, but…

2020-03-25

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2020-03-25

Overview: Global equities are marching higher. While the Dow Jones Industrials posted its biggest advance since 1933, the US is lagging behind other leading benchmarks. The MSCI Asia Pacific advanced, led by Japan's Nikkei's 8% gain. It was third consecutive gain, during which time the Nikkei has rallied 17%. Europe's Dow Jones Stoxx 600 is up about 3.5% after bouncing 8.4% yesterday.

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