Tag Archive: newsletter

Is This “The Top”?

2020-01-06

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2020-01-06

Apple, Operating income, 2006-2019
Parabolic moves end when the confidence that the parabolic move can't end becomes the consensus. The consensus seems to be that the stock market is on its way to much higher levels, and soon. The near-term targets for the S&P 500 (SPX, currently around 3,235) range from 3,500 to 4,000, with longer-term targets reaching "the sky's the limit."

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EM Preview for the Week Ahead

2020-01-06

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2020-01-06

While the global economic backdrop remains favorable for EM, rising geopolitical risks will be a growing headwind. The EM VIX surged above 18% Friday as Iran tensions escalated, the highest since early December. With these tensions likely to persist, EM may remain under some pressure for the time being. High oil prices are positive for the exporters in Latin America and the Middle East but negative for the importers in Asia and Eastern Europe.

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Why Paternalists Keep Calling Us “Irrational”

2020-01-06

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2020-01-06

Some economists, such as the 2017 Nobel Laureate Richard Thaler and his colleague Cass Sunstein, have proposed an unusual justification for government interference with people’s choices. They do not intend, they say, to override the preferences that people have. They don’t want to tell people what they “should” want, according to an external standard that people don’t accept. They claim, however, that accepting the actual preferences people have...

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Facebook’s Libra has failed, says Switzerland’s president

2020-01-05

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2020-01-05

Facebook’s plan to launch its digital currency Libra is unlikely to succeed Ueli Maurer, Switzerland’s president, told SRF. Maurer doesn’t think central banks will accept the basket of currencies underpinning the cryptocurrency. “The project, in this form, has thus failed” he said.

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Why the Minimum Wage Is so Bad for Young Workers

2020-01-05

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2020-01-05

In today’s political discourse, the minimum wage is frequently mentioned by the more progressive members of Congress. On a basic level, raising the minimum wage appears to be a sympathetic policy for low-income wage earners. Often kept out of the conversation, however, are the downstream effects of this proposal.

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Revolutionary idea to store green power for the grid

2020-01-05

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2020-01-05

Stacking blocks of concrete with a crane to store energy and use the force of gravity to keep producing electricity when renewable sources are lacking: simple but revolutionary, the battery solution proposed by the Ticino start-up Energy Vault is attracting investors and customers from around the world.

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Swiss government makes it easier to get paid for work done on the train

2020-01-04

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2020-01-04

From 1 January 2020, it will be much easier for Switzerland’s 38,000 federal government employees to get paid for working on the train, according to the newspaper Tages-Anzeiger. Until the beginning of this year, working on the train on the way to and from work was only rewarded in exceptional instances and even then it was only partially counted.

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2019: The Year of Repo

2020-01-04

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2020-01-04

Fed Balance Sheet: Reserve Balances, 2008-2019
The year 2019 should be remembered as the year of repo. In finance, what happened in September was the most memorable occurrence of the last few years. Rate cuts were a strong contender, the first in over a decade, as was overseas turmoil. Both of those, however, stemmed from the same thing behind repo, a reminder that September’s repo rumble simply punctuated.

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Understanding Money Mechanics

2020-01-04

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2020-01-04

Dr. Bob Murphy joins the Human Action Podcast to discuss one of the most important issues of all: how money and credit work in today's society. Jeff Deist recently commissioned Murphy to write a series of articles on money mechanics, an exceedingly important topic for critics of the Fed—and today's podcast serves as an introduction to the project.

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FX Daily, January 03: Geopolitics Saps Risk Appetite

2020-01-03

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2020-01-03

Iran's Ayatollah Ali Khamenei has threatened "severe retaliation" for the US attacked that killed an important head of a force within the Islamic Revolutionary Guard. At the same time, reports indicate that North Korea's Kim Jong Un is no longer pledging to halt its nuclear weapons testing and has threatened to unveil a new weapon. Meanwhile, Turkish forces have reportedly entered Libya.

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The Two Charts You Need to Ignore or Rationalize Away in 2020 (Unless You’re a Bear)

2020-01-03

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2020-01-03

Fed monthly vs US Stock Market
If you believe you've front-run the herd, you're now in mid-air along with the rest of the herd that has thundered off the cliff. We're awash in financial charts, but only a few crystallize an entire year. Here are the two charts that sum up everything you need to know about the stock market in 2020.

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Running a Swiss business – changes in 2020

2020-01-03

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2020-01-03

Every year brings changes for business owners and managers. In May 2019, a majority of Swiss voters accepted a package of changes to the way companies are taxed known as The Federal Act on Tax Reform and AHV Financing (TRAF). Many of the changes flowing from this begin on 1 January 2020.

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Wealth Consumption vs. Growth – Precious Metals Supply and Demand

2020-01-03

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2020-01-03

Gold and Silver Prices
GDP – A Poor Measure of “Growth” Last week the prices of the metals rose $35 and $0.82. But, then, the price of a basket of the 500 biggest stocks rose 62. The price of a barrel of oil rose $1.63. Even the euro went up a smidgen. One thing that did not go up was bitcoin. Another was the much-hated asset in the longest bull market. We refer to the US Treasury.

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Is Greater Productivity a Danger?

2020-01-03

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2020-01-03

It is bad enough that opponents of the free market wrongly blame capitalism for environmental pollution, depressions, and wars. Whatever the failings of their causal theories, at least they are focused on undoubtedly bad things. We have really gone beyond the pale, though, when the market is blamed for something good.

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Unemployment in Geneva higher than neighbouring France

2020-01-03

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2020-01-03

In December last year, the Observatoire statistique transfrontalier published unemployment figures for the French region surrounding Geneva. French unemployment calculations follow the method used by the International Labour Organisation (ILO), which include all job seekers, according to Tribune de Genève.

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Mnuchin to head US delegation to Davos

2020-01-02

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2020-01-02

The US delegation at the upcoming World Economic Forum (WEF) gathering in Davos will be led by Treasury Secretary Steven Mnuchin. It is unclear whether President Donald Trump will again attend the annual event.

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FX Daily, January 02: Equities Start New Year with a Pop

2020-01-02

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2020-01-02

Overview:  Equities have begun New Year like, well, last year, with most Asia Pacific markets advancing, led by more than 1% gains in China, Hong Kong, and Thailand.  Only South Korea and Indonesian markets fell.  In Europe, the Dow Jones Stoxx 600 is up almost 1% in late morning turnover.  US shares are trading higher as well, and the S&P 500 is up nearly 0.6%.

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The spirit of Fintech past and the spectre of Fintech future

2020-01-02

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2020-01-02

It was a busy 2019 for Swiss fintech and there is promise for more to come in 2020. Here’s a round-up of fintech past and my observations of how things may shape up in the coming months. The year 2019 started with the arrival of a new breed of Fintech banking license, designed to allow small financial players to accept up to CHF100 million in deposits, but with restrictions.

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2019 Was a Bad Year For the “Only Cops Should Have Guns” Narrative

2020-01-02

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2020-01-02

Total New Guns, Homicide Rate, 1986-2018
On December 29, an armed gunman entered the West Freeway Church of Christ in Texas and shot two members of the congregation. Within six seconds, a third member of the congregation drew a weapon and shot the gunman dead. The events were captured on live-streamed video, with the dramatic events — in the minds of many observers — highlighting the benefits of privately-owned firearms as a defense against armed criminals.

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The Fed’s “Not-QE” and the $33 Trillion Stock Market in Three Charts

2020-01-02

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2020-01-02

U.S. Stock Market
One day the stock market 'falcon' will no longer hear the Fed 'falconer', and the Pavlovian magical thinking will break down as the market goes bidless. The past decade has shown that when the Federal Reserve creates trillions of dollars out of thin air (QE), U.S. stocks rise accordingly. The correlation is very nearly perfect.

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