Tag Archive: newsletter

The Failed Dream of a Laissez-Faire Monarch

2020-08-23

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2020-08-23

One problem that any laissez-faire liberal thinker must face is: Granted that government interference should be minimal, what form should that government take? Who shall govern?

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Coronavirus: a quarter of Swiss employees don’t want to be vaccinated, suggests survey

2020-08-22

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2020-08-22

A survey run by the Bern University of Applied Sciences on behalf of the trade union Travail suisse suggests a significant portion of Switzerland’s workforce does not want to be vaccinated against the SARS-CoV-2 virus, reports the newspaper 20 Minutes.

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How do you separate the good companies from the bad apples?

2020-08-22

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2020-08-22

Our regular analysis of what the biggest global companies in Switzerland are up to. This week: dubious gold origins, luxury watch straps, and vaccine deals. Gold refineries are under scrutiny for sourcing gold from Dubai traders with questionable ties to illegal mines in Africa. But is it fair to lump all refineries into one basket of bad apples?

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Monthly Macro Monitor – August 2020

2020-08-22

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2020-08-22

One of the advantages we enjoy here at Alhambra is the opportunity to interact with a lot of investors. We talk to hundreds of individual investors on a monthly basis, giving us a front-row seat to everyone’s fear and greed. Economic data tells us about the past, which isn’t particularly useful for investors focused on the future.

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How the Lockdowns Will Drive Up Healthcare Costs

2020-08-22

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2020-08-22

The covid-19 lockdowns have done untold amounts of economic damage, most of which has yet to reveal itself. Permanent unemployment for millions, countless bankruptcies, rent defaults and much more will jar the economy for the foreseeable future.

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FX Daily, August 21: PMIs Shake Investor Confidence

2020-08-21

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2020-08-21

The second disappointing Fed manufacturing survey report and an unexpected rise in weekly jobless claims helped reverse the disappointment over the FOMC minutes. Bonds and stocks rallied--not on good macroeconomic news, but the opposite, which underscores the likelihood of more support for longer.

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U.S. dollar liquidity-providing operations from 1 September 2020

2020-08-21

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2020-08-21

In view of continuing improvements in U.S. dollar funding conditions and the low demand at recent 7-day maturity U.S. dollar liquidity-providing operations, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank, in consultation with the Federal Reserve, have jointly decided to further reduce the frequency of their 7-day operations from three times per week to once per week.

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Part 2 of June TIC: The Dollar Why

2020-08-21

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2020-08-21

Federal Reserve: H.10 Foreign Exchange Rates, 2008-2020
Before getting into the why of the dollar’s stubbornly high exchange value in the face of so much “money printing”, we need to first go back and undertake a decent enough review of the guts maybe even the central focus of the global (euro)dollar system.

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Our Systemic Drift to Collapse

2020-08-21

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2020-08-21

How systems collapse
Thus do the lazy complacent passengers drift inexorably toward the cataracts of collapse just ahead. The boat ride down to the waterfall of systemic collapse is not dramatic, it's lazy drifting: a lazy complacency that doing more of what worked in the past will work again, and an equally lazy disregard for how far the system has drifted from the point when things actually worked.

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Where Has All the Carry Gone?

2020-08-21

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2020-08-21

Greater China EM Carry, 2000-2020
Despite broad-based dollar weakness, EM currencies have not fully participated in the risk on environment that’s now in place. The good news is that fundamentals matter again. The bad news is that there are a lot of EM countries with bad fundamentals, and the secular decline in carry no longer gives these weaklings any cover.

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As the Bubble Slowly Pops, the Economic Chain Reaction Is Now in Progress

2020-08-21

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2020-08-21

Effective Federal Funds Rate
Much has been written about the economic consequences of covid-19, yet, just as in many of the analyses of the Great Depression and the 2008 crisis, the years of accumulating debt preceding the event do not attract the attention they deserve.

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Calculating GDP Correctly

2020-08-21

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2020-08-21

There are many reasons we should be skeptical of the GDP statistic. But it is nonetheless important to understand how it is calculated.

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FX Daily, August 20: FOMC Minutes Spur Profit-Taking

2020-08-20

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2020-08-20

Overview: The FOMC minutes depicted a Federal Reserve that appeared to be not quite ready to take fresh initiatives, whether it is yield curve control or changing the composition or quantities of its bond purchases.  This unleashed profit-taking on some of the large moves in equities, the dollar, and gold.

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Swiss labor force survey in the 2nd quarter of 2020: labor supply

2020-08-20

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2020-08-20

Unemployed According to ILO, Q1 2015-Q2 2020
The number of employed persons in Switzerland fell by 1.6% (–82 000) between the 2nd quarter 2019 and the 2nd quarter 2020. Furthermore, the actual weekly hours per employed person declined by 9.5%.

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Neo-banks challenging Swiss financial sector

2020-08-20

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2020-08-20

New digital banks are popping up in Switzerland without a single branch or counter.  One of them, Zurich-based Neon, is staking its success on doing more with less and has attracted 30,000 customers.

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Cool Video: TD Ameritrade with Ben Lichtenstein

2020-08-20

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2020-08-20

With the dollar continuing to trend lower, it was time to check again with Ben Lichtenstein at TD Ameritrade.  It was a privilege to join him today to discuss the drivers. I sketched out my views that the greenback's two legs, growth and interest rate differentials have been knocked from under it.

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Warren Buffett Shorts The Economy, 18 August

2020-08-20

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2020-08-20

Silver basis price
It must be Monday, because the price of silver skyrocketed. From $26.10, it shot up to $27.50, or +5.4%. The last time we wrote about silver was after its crash to $25. Silver is now priced 10% above that low point.

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The Debt-Inflation Spiral Is Driving up the Demand for Gold

2020-08-20

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2020-08-20

Comex Gold, 2019-2020
Measured in dollars, the current bull market for gold started in December 2015, since which its price in dollars has almost doubled. Other than the odd headline when gold exceeded its previous September 2011 high of $1,920, only gold bugs seem to be excited.

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As Markets Crashed, The Swiss National Bank Went On A Tech Stock Buying Spree

2020-08-19

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2020-08-19

Swiss National Bank US Stock Holdings, 2014-2020
It used to be a running joke among traders that when markets crash, central banks step in - either directly or in the case of the Fed indirectly via Citadel - and buy stocks to prop up the market and shore up confidence. That joke is now the truth.

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FX Daily, August 19: US Equities Outperform but Does Little for the Heavy Greenback

2020-08-19

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2020-08-19

EUR/CHF and USD/CHF, August 19
Overview:  The S&P 500 and NASDAQ set new all-time highs yesterday, but the continued outperformance of US equities have failed to lend the dollar much support.  It was sold to new lows for the year yesterday against the euro, sterling, the Swedish krona, and the Australian dollar. 

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