Tag Archive: newsletter

Raising Rates to Fight Inflation, Report 24 Nov

2019-11-26

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2019-11-26

Physics students study mechanical systems in which pulleys are massless and frictionless. Economics students study monetary systems in which rising prices are everywhere and always caused by rising quantity of currency. There is a similarity between this pair of assumptions. Both are facile. They oversimplify reality, and if one is not careful they can lead to spectacularly wrong conclusions.

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FX Daily, November 25: Hong Kong, China, and UK Election Hopes Fan Modest Risk-Taking

2019-11-25

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2019-11-25

Overview: The combination of the victory of the pro-democracy movement in Hong Kong and an apparent concession by China on intellectual property rights is helping bolster risk appetites to start the week. Equities are higher. Hong Kong's Hang Seng led Asia Pacific equities with a 1.5% gain, the second biggest this month. Korea and India's bourses also gained more than 1%.

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Currencies: do it with style

2019-11-25

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2019-11-25

SPOT PERFORMANCE OF CURRENCIES BY STYLE (YTD, VS.USD)
Our scenario of ongoing global growth moderation and elevated political uncertainties should, we believe, support defensive currencies. We consider a currency ‘defensive’ if it is likely to remain resilient should global risk appetite falter.

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Green light for ‘democratic piloting’ of Geneva Airport

2019-11-25

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2019-11-25

Voters in Geneva have backed a local initiative calling for controlled development of the airport. According to initial results, 55.81% of voters said “yes” on Sunday to the constitutional initiative calling for the “democratic piloting of Geneva Airport”.

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Darn, This Is Inconvenient: Apple Is Destroying the Planet to Maximize Profits

2019-11-25

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2019-11-25

Stripmining the planet to maximize profits isn't progressive or renewable--it's just exploitive and destructive. How do we describe the finding that the planet's most widely-owned super-corporation is destroying the planet to maximize its smartphone sales and profits? Shall we start with "inconvenient?" Yes, we're talking about Apple, famous for coercing customers to upgrade their Apple phones and other gadgets if not annually then every couple...

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FX Weekly Preview: Is Conventional Wisdom Too Optimistic?

2019-11-25

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2019-11-25

There have been three general issues that the macro-fundamental picture has revolved around this year: trade, growth, and Brexit. On all three counts, conventional wisdom seems unduly optimistic, and this may have helped dampen volatility. A series of signals suggest that the US and China remain far apart in trade negotiations.

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Drivers for the Week Ahead

2019-11-25

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2019-11-25

The dollar was surprisingly resilient last week; we look for further dollar gains ahead. It is a holiday shortened week in the US, but there are still some major data releases. There is a fair amount of eurozone data this week; UK Prime Minister Johnson unveiled his Tory manifesto. Hong Kong held local elections this weekend; tensions between Japan and Korea appear to have eased, but questions remain.

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Money-Supply Growth Accelerates to 28-Month High

2019-11-25

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2019-11-25

M2 and TMS/Rothbard-Solerno Measure, 1998-2019
The money supply growth rate rose in October, climbing to a twenty-eight-month high. The last time the growth rate was higher was during July of 2017, when the growth rate was 5.07 percent. During October 2019, year-over-year growth in the money supply was at 4.95 percent. That's up from September's rate of 3.10 percent, and was up from October 2018's rate of 3.49 percent.

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Swiss prosecutors search Vitol and Trafigura offices as part of Car Wash probe

2019-11-24

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2019-11-24

Swiss investigators have executed searches at the Geneva offices of commodity traders Vitol and Trafigura at the request of Brazilian federal prosecutors as part of Brazil’s Lava Jato [Car Wash] corruption probe. In a statementexternal link on Thursday, Brazilian federal prosecutors said Swiss investigators had executed “search and seize warrants” at Geneva addresses linked to Vitol and Trafigura on Wednesday.

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Switzerland must ramp up green energy efforts to meet targets

2019-11-24

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2019-11-24

Switzerland is on track to meet its short-term greener energy goals, but the government warns that more work needs to be done to meet more ambitious mid-term targets by 2035. The alpine country plans to be carbon neutral by 2050.

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There Is No End to History, No Perfect Existence

2019-11-24

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2019-11-24

All doctrines that have sought to discover in the course of human history some definite trend in the sequence of changes have disagreed, in reference to the past, with the historically established facts and where they tried to predict the future have been spectacularly proved wrong by later events.

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Swiss president continues on his ‘autocrat world tour 2019’

2019-11-23

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2019-11-23

Ueli Maurer, who holds the rotating Swiss presidency this year, was set to meet Russian President Vladimir Putin in Moscow on Thursday. It is Maurer’s fourth foreign visit this year that has raised eyebrows in Switzerland.

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20 years of the Vereina tunnel

2019-11-23

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2019-11-23

On November 19, 1999, after eight years of construction, the Vereina Tunnel opened in eastern Switzerland.Connecting the Landquart – Davos Platz and the Bever – Scuol-Tarasp lines, the tunnel is 19 kilometres long and the journey through takes 18 minutes.In 20 years, it has brought various improvements to locals, tourists, and businesses.However, its construction had initially been opposed by some as it was feared that the tunnel would lead to...

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What’s Been Normalized? Nothing Good or Positive

2019-11-23

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2019-11-23

What's been normalized are policies and cultural norms that seek to enrich and protect the few at the expense of the many. When the initially extraordinary fades into the unremarkable background of everyday life, we say it's been normalized. Put another way, we quickly habituate to new conditions, and rationalize our ready acceptance of what was previously unacceptable.

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Global Gold Buyers Are ‘Confident’ in Gold

2019-11-23

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2019-11-23

‘Retail Gold Insights 2019’ has just been published by the World Gold Council. It is a thematic analysis of their new consumer research survey. With a base of 18,000 participants across India, China, Russia, Germany, the US and Canada, we believe it is the largest ever consumer survey on the global gold market.

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FX Daily, November 22: Europe’s Flash PMI Disappoints and Hong Kong Shares Advance Ahead of Sunday’s Election

2019-11-22

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2019-11-22

Overview: Equities in the Asia Pacific managed to mostly shrug off the drag of the losses in US equities yesterday. China and India could not escape the pull, but most other bourses were higher, led by Singapore and Hong Kong. It was the second consecutive week that the MSCI Asia Pacific Index fell. The US and European benchmarks are paring this week's small losses.

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UBS Has No Choice In Passing Negative Rate Pain To Customers

2019-11-22

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2019-11-22

G4 policy rates, 2000-2020
There's been talk that the Federal Reserve will slam interest rates to zero or even negative when the next recession strikes. President Trump's support for negative interest rates has quickly increased in the last several months as the latest tracking estimates for Q4 GDP have tumbled to sub 0.4%. 

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The Deep State: The Headless Fourth Branch of Government

2019-11-22

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2019-11-22

School children learn that there are three branches of government: the legislative, executive, and judicial. In actual practice, however, there are four branches of government. The fourth is what for decades now has been called a "headless fourth branch of government," the administrative state.

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Dollar and Equities Sink as Trade Pessimism Rises

2019-11-22

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2019-11-22

Pessimism regarding a Phase One trade deal has intensified; further muddying the waters are recent US Congressional actions. FOMC minutes contained no surprises; regional Fed manufacturing surveys for November continue. South Africa is expected to cut rates by 25 bp to 6.25%. Korea reported trade data for the first twenty days of November; Indonesia kept rates steady at 5.0%, as expected.

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EM Sovereign Rating Model For Q4 2019

2019-11-22

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2019-11-22

Emerging Markets Sovereign Ratings Model Q4 2019
We have produced the following Emerging Markets (EM) ratings model to assess relative sovereign risk. An EM country’s score directly reflects its creditworthiness and underlying ability to service its external debt obligations. Each score is determined by a weighted compilation of fifteen economic and political indicators, which include external debt/GDP, short-term debt/reserves, import cover, current account/GDP, GDP growth, and budget balance.

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