Tag Archive: newsletter

The Post-Covid Economy Will Be Very Different From the Pre-Pandemic Bubble Economy

2020-06-03

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2020-06-03

As the old models break down, opportunities for new models will arise. Unstable, unsustainable systems can lull observers into a comfy complacency as instability increases beneath a thin veneer of apparent stability. That's the systemic story of the past 20 years: all the extremes that were needed to maintain the veneer of stability have increased the instability building beneath the complacent confidence.

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Coronavirus: around 2 percent of Switzerland’s medical staff infected

2020-06-03

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2020-06-03

2.1% of the 100,000 hospital staff working across 20 Swiss hospitals were infected with SARS-COV-2, according to a report published in the SonntagsZeitung.

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Dollar Broadly Weaker After Reports of Possible Brexit Compromise

2020-06-03

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2020-06-03

Balance sheets, USD Trin, 2007-2019
The dollar remains under pressure; there is a debate as to the root causes of recent dollar weakness. May auto sales will be the only US data release today; protests in the US are further denting Trump’s re-elections prospects, at least according to betting odds. The G7 meeting planned at Camp David this month was postponed after German Chancellor Merkel declined his invitation.

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In Gold We Trust, 2020 – The Dawning of a Golden Decade

2020-06-03

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2020-06-03

The New In Gold We Trust Report is Here! The In Gold We Trust 2020 report by our good friends Ronald Stoeferle and Mark Valek was released last week. It is the biggest and most comprehensive gold research report in the world.

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Davos aims to coax elite out of isolation in January

2020-06-02

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2020-06-02

The World Economic Forum has vowed to hold its annual meeting in Davos in January, testing the willingness of a globetrotting elite to resume the high-powered networking that has been frozen by the coronavirus pandemic.

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FX Daily, June 2: Greenback’s Slide Continues

2020-06-02

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2020-06-02

Overview: Liquidity trumps everything else.  US equities shrugged off the national guard being called into action in nearly a third of US states, and the S&P 500 closed yesterday at nearly three-month highs. Asia Pacific markets followed suit.  Most markets in the region rose by more than 1%. The notable exceptions were Australia and China, where benchmarks rose by 0.2%-0.3%. The Dow Jones Stoxx 600 is up more than 1% in the European morning.

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“Wenn die Notenbank den Staat finanziert (When the Central Bank Finances the State),” FAS, 2020

2020-06-02

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2020-06-02

Monetary deficit financing is the norm—after all, central banks distribute their profits. Monetary financing occurs in the context of regular open market operations and QE and, hyper charged, with helicopter drops. The question is not whether monetary policy should finance the government, but why it does so, and to what extent. Fiscal and monetary policy are inherently connected; what constitutes monetary policy is defined by objectives.

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June Monthly

2020-06-02

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2020-06-02

The investment climate in June will be shaped by forces that emerged in May.  Many countries began relaxing lockdowns and various activity-based alternative data, like traffic pattern, Open Table Reservations showed improvement on the margins.  Sentiment surveys, while mostly still depressed, were better than April readings.  The long slog back has begun. 

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We’re Living the Founding Fathers’ Nightmare: America Is Corrupt to the Core

2020-06-02

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2020-06-02

How Systems Collapse
Our ruling elites, devoid of leadership, are little more than the scum of self-interested, greedy grifters who rose to the top of America's foul-smelling stew of corruption. The Founding Fathers were wary of institutional threats to liberty and the citizenry's sovereignty, which included centralized concentrations of power (monarchy, central banks, federal agencies, etc.) and the tyranny of corruption unleashed by small-minded, self-interested,...

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There’s No End in Sight to the Zombie Economy

2020-06-02

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2020-06-02

The United States was waiting for the zombie apocalypse. The country was given a coronapocalypse instead. But could the two events merge and provide the nation with a dangerous economic trend? Corporate America’s worst-kept secret had been the swelling number of zombies kept on life support and hidden away during the boom phase of the business cycle.

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Michael Flynn, Lori Loughlin, and the Permanent Culture of Prosecutorial Abuse

2020-06-02

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2020-06-02

When US attorney general William Barr recently announced that the Department of Justice was reversing course and dropping all charges against former Trump adviser Michael Flynn, the response from Democrats, the mainstream news media, and Never-Trump Republicans such as David French was thermonuclear, to put it mildly.

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FX Daily, June 1: US Dollar Losses are Extended, but Momentum Stalls in the European Morning

2020-06-01

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2020-06-01

Overview: US stocks extended their gains ahead of the weekend after President Trump shied away from specific actions against China-Hong Kong, and today Hong Kong shares recovered smartly from last week's 3.6% slide. The Hang Seng rose 3.3% today, and the Shanghai Composite gained over 2%. All the markets in the region advanced. Europea's Dow Jones Stoxx 600 was up about 0.5% in late morning turnover, which would be the fifth gain in six sessions. ...

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Coronavirus: number of tests stagnates in Switzerland

2020-06-01

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2020-06-01

The number of daily new cases has remained low in Switzerland throughout May. The highest number of new cases over this period was recorded on 1 May (119). The latest daily number, published on 29 May, was 31 new daily cases. Since the beginning of May the number has been as low as 10.

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Credit Suisse grants CHF2.8 billion in corona credit

2020-06-01

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2020-06-01

Major Swiss bank Credit Suisse has issued 15,400 emergency loans totaling CHF2.8 billion ($2.9 billion) during the coronavirus crisis, says board chairman Urs Rohner. The numbers are similar at competitor UBS.

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Personal Income and Spending: The Other Side

2020-06-01

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2020-06-01

Personal Income & Spending, 2017-2020
The missing piece so far is consumers. We’ve gotten a glimpse at how businesses are taking in the shock, both shocks, actually, in that corporations are battening down the liquidity hatches at all possible speed and excess. Not a good sign, especially as it provides some insight into why jobless claims (as the only employment data we have for beyond March) have kept up at a 2mm pace.These are second order effects.

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This Is How Systems Collapse

2020-06-01

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2020-06-01

How Systems Collapse
Flooding the financial system with "free money" only restores the illusion of stability. I updated my How Systems Collapse graphic from 2018 with a "we are here" line to indicate our current precarious position just before the waterfall: For those who would argue we're nowhere near collapse, consider that over 20% of the Federal Reserve's $2 trillion spew of free money went directly into the pockets of America's billionaires.

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Two Analogies for the Economy That the Media Keeps Getting Wrong

2020-06-01

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2020-06-01

In an attempt to maintain the lockdown and their authority over our lives, politicians, health experts, and the mainstream media have been misusing some unusual analogies to describe the current economy. By using these analogies, our political overlords hope they can continue to keep the economy shut down, force companies to produce what the government forgot to purchase before the virus hit, and toss out trillions of dollars of handouts and...

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Defining “Inflation” Correctly

2020-06-01

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2020-06-01

Inflation is typically defined as a general increase in the prices of goods and services—described by changes in the Consumer Price Index (CPI) or other price indexes. If inflation is a general rise in measured prices, then why is it regarded as bad news? What kind of damage can it inflict? Mainstream economists maintain that inflation causes speculative buying, which generates waste.

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Coronavirus: new infections in Switzerland remain low

2020-05-31

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2020-05-31

Over the last week there have been an average of 15 new SARS-CoV-2 cases a day. The first confirmed case in Switzerland was recorded on 24 February 2020. In the week that followed the number of new daily infections rose to 31. Another week later the number of new daily cases was 192.

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Saint-Gobain to drop its shareholding in Swiss chemical maker Sika

2020-05-31

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2020-05-31

The French building materials and distribution group Saint-Gobain has announced the sale of its 10.75% stake in the capital of the Swiss chemical manufacturer Sika.

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