Tag Archive: newsletter

Repo Crisis Fades Away: For The First Time, A “Turn” Repo Is Not Oversubscribed

2019-12-23

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2019-12-23

It looks like the year-end repocalypse that was predicted by Credit Suisse strategist Zoltan Pozsar is taking a raincheck. Today's Term Repo saw $26.25BN in security submissions ($15.75BN in TSYs, $10.5BN in MBS), below the $35BN in total availability. This was the first "turn" repo that was not fully subscribed (on Monday, there was $54.25BN in demand for $50BN in repos maturing on Jan 17).

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EM Preview for the Week Ahead

2019-12-23

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2019-12-23

EM FX was mostly firmer last week.  ZAR, PEN, and CLP outperformed while TRY, HUF, and CNY underperformed.  MSCI EM traded at new highs for the cycle but ran out of steam near the 1110 area, while MSCI EM FX lagged a bit and has yet to surpass its July high.  Overall, the backdrop for EM remains constructive but investors must be prepared to differentiate amongst credits in 2020.

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Do Negative Rates Work? Yes, But Not by Much

2019-12-23

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2019-12-23

Federal Reserve policy makers opposed to taking interest rates negative in the next recession might take comfort from the end of Sweden’s dalliance with below-zero rates. But investors shouldn’t expect the neighboring eurozone to follow suit: Just hours after the Riksbank raised its policy rate back to zero on Thursday, a group of the most senior monetary-policy staff at the European Central Bank published a long-awaited paper robustly defending...

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Switzerland’s high prices – a European comparison

2019-12-22

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2019-12-22

Recently published data shows how prices compare across Europe. The data, collected by Eurostat, compares prices across a number of categories of spending in 2018. Average prices across the EU-28 are used as a base.

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Parliament approves CHF6 billion fighter jet package

2019-12-22

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2019-12-22

The Swiss parliament has approved the purchase of a new fleet of fighter jets to the tune of some CHF6 billion ($6.1 billion). The plans may yet face approval by citizens. Both chambers of parliament have now accepted plans proposed by the government to buy up to 30 new fighter jets, a step it says is vital for the stability and security of the country.

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Good Economic Theory Focuses on Explanation, Not Prediction

2019-12-22

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2019-12-22

In order to establish the state of the economy, economists employ various theories. Yet what are the criteria for how they decide whether the theory employed is helpful in ascertaining the facts of reality? According to the popular way of thinking, our knowledge of the world of economics is elusive — it is not possible to ascertain how the world of economics really works.

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Our Fragmentation Accelerates

2019-12-22

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2019-12-22

As our fragmentation accelerates, shared economic interests are ignored in favor of divisive warring camps that share no common interests. That our society and economy are fragmenting is self-evident. This fragmentation is accelerating rapidly, as middle ground vanishes and competing camps harden their positions to solidify the loyalty of the "tribe." 

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Marx and Left Revolutionary Hegelianism

2019-12-22

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2019-12-22

[This article is excerpted from volume 2, chapter 11 of An Austrian Perspective on the History of Economic Thought (1995).] Hegel's death in 1831 inevitably ushered in a new and very different era in the history of Hegelianism. Hegel was supposed to bring about the end of history, but now Hegel was dead, and history continued to march on. So if Hegel himself was not the final culmination of history, then perhaps the Prussian state of Friedrich...

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Swiss visit doctor less often than most of Europe

2019-12-21

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2019-12-21

In 2017, an average Swiss resident visited a medical professional 4.32 times, according to data recently published by Eurostat. Only residents of Denmark (4.30), Sweden (2.77) and Cyprus (2.09) went to see a doctor less often. The average number of visits across those European countries with 2017 data was 6.84.

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Parliament rubber stamps free trade deal with Indonesia

2019-12-21

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2019-12-21

The Swiss parliament has given the go-ahead for a free trade deal with Indonesia, although not without debates about sustainability and the Asian country’s production of palm oil. Almost exactly a year after the deal was signed between the European Free Trade Association (EFTA) and Indonesia, the Swiss parliament gave its green light on Thursday.

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Corporate Debt Time Bomb

2019-12-21

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2019-12-21

US Non-Financial Corporate Debt as Percent of GDP, 1955-2019
While I have reportedly highlighted the many risks of the current monetary policy direction and the multiple distortions that it has created in the markets, in the economy, and even in society, one of the most pressing dangers of the unnaturally low rates and cheap money is the staggering accumulation of debt. Nowhere is this more obvious than in the ballooning corporate debt, especially in the US.

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Everything Comes Down To Which Way The Dollar Is Leaning

2019-12-21

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2019-12-21

Rising Dollar Squeeze
Is the global economy on the mend as everyone at least here in America is now assuming? For anyone else to attempt to answer that question, they might first have to figure out what went wrong in the first place. Most have simply assumed, and continue to assume, it has been fallout from the “trade wars.”

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Consumer Preferences Are Harder to Measure than the Behavioral Economists Think

2019-12-21

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2019-12-21

A recent paper in the Journal of Consumer Psychology (JCP) has started a debate on the accuracy of "loss aversion," the idea that people are driven by fear of losses more than they are by the potential for gain. Core to behavioral economics, this idea has been rather universally accepted and been part of the awarding of two economics Nobel Prizes, in 2002 to Daniel Kahneman and in 2017 to Richard Thaler.

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Rosenblatt Goes Full Bear On Apple With $150 Target As China iPhone Sales Slump

2019-12-20

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2019-12-20

Apple sales, 2017-2020
Rosenblatt Securities analyst Jun Zhang maintained a sell rating on Apple with a price target of $150 per share, citing a decline in iPhone sales in China is leading to a wave of production cuts by the company. "Based on our recent channel checks, we believe Apple's total iPhone sales in China were down ~-30% y/y in November," said Zhang in a note to clients on Tuesday.

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Skyrocketing Costs Will Pop All the Bubbles

2019-12-20

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2019-12-20

Wages aren't keeping up
The reckoning is coming, and everyone who counted on "eternal growth of borrowing" to stave off the reckoning is in for a big surprise. We've used a simple trick to keep the status quo from imploding for the past 11 years: borrow whatever it takes to keep paying the skyrocketing costs for housing, healthcare, college, childcare, government, permanent wars and so on.

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The Strongest Seasonal Advance in Precious Metals Begins Now

2019-12-20

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2019-12-20

Plans and Consequences. You are probably already getting into the holiday spirit, perhaps you are even under a little stress. But the turn of the year will soon be here – an occasion to review the past year and make plans for the new one. Many people are doing just that – and their behavior is creating the strongest seasonal rally in the precious metals markets.

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OK Boomer, OK Fed

2019-12-20

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2019-12-20

Student Loans Owned and Securitized, Outstanding 2008-2018
Eventually the younger generations will connect all the economic injustices implicit in 'OK Boomer' with the Fed. Much of the cluelessness and economic inequality behind the OK Boomer meme is the result of Federal Reserve policies that have favored those who already own the assets (Boomers) that the Fed has relentlessly pumped higher, to the extreme disadvantage of younger generations who were not given the opportunity to buy assets cheap and ride...

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Outlook 2020 | Buy Gold and Silver To Hedge Massive Risks including U.S. ‘Insolvency’

2019-12-20

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2019-12-20

Buy gold and silver to hedge risks in 2020. IG interview Mark O’Byrne of GoldCore With late cycle risks and concerns about global growth, many Wall Street analysts are increasingly bullish on gold. Mark O’Byrne, founder at GoldCore spoke to IGTV’s Victoria Scholar about the outlook for gold in 2020.He explained why most analysts including GoldCore are optimistic on both gold and silver.

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