Tag Archive: newsletter

The Fed Slashes Rates as Powell Declares Economy “Strong”

2020-03-04

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2020-03-04

Federal Funds Target Rate Since 1992
The Federal Reserve this morning slashed the target federal funds rate by 0.5 percent today. According to CNBC: The Federal Reserve moved to an enact an emergency interest rate cut after officials saw the coronavirus having a material impact on the economic outlook, Chairman Jerome Powell said Tuesday.

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A Day For Rate Cuts

2020-03-04

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2020-03-04

Total Credit Market, 1980-2015
Well, that wasn’t he had in mind. The whole point of a rate cut, any rate cut let alone an emergency fifty, is to signal especially the stock market that the Fed is in the business of…something. The public has been led, by and large, to assume that something good happens when the Fed Chair shows up on TV.

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Did Covid-19 Just Pop All the Global Financial Bubbles?

2020-03-04

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2020-03-04

All Sectors Debt Securities and loans, 1960-2019
Once confidence and certainty are lost, the willingness to expand debt and leverage collapses. Even though the first-order effects of the Covid-19 pandemic are still impossible to predict, it's already possible to ask: did the pandemic pop all the global financial bubbles? The reason we can ask this question is the entire bull mania of the 21st century has been based on a permanently high rate of expansion of leverage and debt.

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March Monthly

2020-03-03

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2020-03-03

The new coronavirus that originated in China, apparently first detected in December, emerged on the world's stage in January and continues to dominate the investment climate. There are two critical questions for investors and businesses whose answers will likely be clearer in the first part of March. First, will Covid-19 be contained for the most part by the end of Q1? 

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Swiss National Bank to distribute 4 billion francs of profit

2020-03-03

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2020-03-03

In 2019, the Swiss National Bank (SNB) made a profit of around CHF 49 billion. These profits came mainly from the rising value of the assets on the bank’s balance sheet. In 2019, the value of its holdings of foreign currency and gold rose substantially. When combined with interest, dividend income and gains on shares total profits for the year were CHF 49 billion.

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Silver Backwardation Returns, Gold and Silver Market Report 2 March

2020-03-02

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2020-03-02

Silver Spot Price Bid-Offer Spread
The big news this week was the drop in the prices of the metals (though we believe that it is the dollar which is going up), $57 and $1.81 respectively. Of course, when the price drops the injured goldbugs come out. We have written the authoritative debunking of the gold and silver price suppression conspiracy here. We provide both the scientific theory and the data.

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FX Daily, March 2: Central Banks’ Words of Assurance have Short Life

2020-03-02

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2020-03-02

Overview: Comments beginning with Powell before the weekend, and BOJ and BOE earlier today promising support have saw equity markets briefly stabilize after last week's dramatic moves. The G7 will hold a teleconference this week, but speculation of a coordinated rate move does not seem particularly likely. Most of the large stock markets in the Asia Pacific region rallied, led by a 3%+ advance in China.

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Potential relief for some Swiss renters

2020-03-02

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2020-03-02

Every three months the rate of interest used to benchmark Swiss rents is reviewed. If it goes down some renters have the right to request a decrease in rent. This time the reference rate fell from 1.50% to 1.25%. The last time it dropped was 2 June 2017 when it fell to 1.5%. The rate is based on the average Swiss mortgage rate over three months.

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SNB Profit in 2019: 48.9 billion (2018: loss of CHF 14.9 billion, 2020 Does not Look Good)

2020-03-02

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2020-03-02

Income Statement for 2019
The increasing volatility of SNB Earnings Annual results are not really definite. Given that the SNB accumulates foreign currencies with interventions, they have huge swings. But the SNB may lose 50 billion in one year and win 60 billion in the next year or vice verse. Good years of the Credit Cycle This trend was … Continue reading »

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Drivers for the Week Ahead

2020-03-02

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2020-03-02

The dollar has softened as Fed easing expectations have picked up. Late Friday, Chair Powell issued an unscheduled statement saying the Fed is monitoring the virus and will act as appropriate. This is a big data week for the US; the Fed releases its Beige Book report Wednesday. Super Tuesday comes this week; Bank of Canada meets Wednesday.

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Swiss price watchdog calls for reduction in train ticket prices

2020-03-02

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2020-03-02

With track fees for rail companies set to drop, savings should be passed on to customers, Stefan Meierhans told the weekly NZZ am Sonntag. The call comes on the heels of revelations that two state-owned rail firms wrongly claimed millions in subsidies.

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The Limits of Force: A Bayonet in the Back Will Not Restore China’s Economy

2020-03-02

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2020-03-02

Exponential Growth and the Expansion of the coronavirus
Force cannot restore legitimacy, trust or confidence, nor can it magically erase the consequences of a still-unfolding national trauma. The Chinese authorities threatening to punish workers who refuse to return to work are getting a lesson in the limits of force in an unprecedented national trauma: a bayonet in the back will not restore the legitimacy and confidence that have been lost.

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Mises: To Adopt Keynesian Terminology Is to Legitimize It

2020-03-02

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2020-03-02

Some years ago, there was published a book in the German language with the title L.T.I. These three letters stood for three Latin words, lingua Tertii Imperii, the language of the Third Reich. And the author, a former professor of Romance languages at one of the German universities, described in this book his adventures during the Nazi regime.

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Transport operators told to pay back millions in state subsidies

2020-03-01

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2020-03-01

Two more Swiss state-owned transport companies have been ordered to pay back more than CHF50 million ($51 million) in wrongly claimed subsidies. The authorities are also looking into the possibility of criminal prosecutions in connection with the worsening subsidies scandal.

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Could the Covid-19 Pandemic Collapse the U.S. Healthcare System?

2020-03-01

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2020-03-01

Еxponential growth and the expansion of the coronavirus
Disregard these second-order effects at your own peril. A great many systems that are assumed to be robust are actually fragile. Exhibit #1 is the global financial system, of course, but Exhibit #2 may well be the healthcare system globally and in the U.S.

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The US’s “Free Trade” Isn’t Very Free

2020-03-01

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2020-03-01

Taxes on US imports as a share of total imports value
The false notion that the US has eliminated virtually all of its barriers to foreign imports has been repeated more and more in recent years. The claim is made both by advocates for free trade and by critics of free trade. For instance, Patrick Buchanan has claimed only American elites "are beneficiaries to free trade" while implying the US either has free trade, or something close to it.

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Close to one fifth of households in Switzerland behind on debt payments

2020-02-29

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2020-02-29

In 2017, 18.9% of Switzerland’s population lived in a household with outstanding debt repayments, a percentage that has rose from 17.7% over the proceeding 4 years. The most common forms of outstanding debts were taxes, health insurance premiums and phone bills. 9.9% of households had outstanding tax payments, 7.3% owed health insurance money and 5.2% had an outstanding telecommunications bill.

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Swiss business takes on global waste

2020-02-29

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2020-02-29

Mr. Green, a recycling subscription service with a social mission, has been a big hit with busy families and businesses in cities in Switzerland. But can it work in Africa? Swiss entrepreneur Keiran Smith had no connection with Kenya before starting Mr. Green Africa.

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Swiss parliament assumes control of Crypto probe

2020-02-29

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2020-02-29

The Swiss parliament has insisted that it will take control of and merge the ongoing investigations into the Crypto spying affair that has rocked the Alpine nation. On Wednesday, members of the parliamentary control delegation decided to immediately take over the direction of investigation launched by the Federal Council (executive branch) on February 11.

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Goldman: 3 Key Reasons Why We Are Bullish On Gold

2020-02-29

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2020-02-29

10 Year Gold Price in USD/oz
On “Bloomberg Commodities Edge”, Bloomberg’s Alix Steel and Naureen Malik talk with Jeff Currie, global head of commodities research at Goldman Sachs. They discuss Goldman’s bullish stance on gold.

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