Trade Wars

A cura di Walter Snyder, Swiss Financial Consulting There have been numerous reports on the ongoing trade war between the US and China. So far the markets in the US seem to have taken the goings on in their stride while in China the Shanghai index has fallen 20%. The Chinese national plunge protection team has already been at work. One has to ask the question whether Chinese investors see things that...

The Benefits of the Other Side

A cura di Jack Forehand, Validea Polarization has become the new thing. Everyone seems to have such strong opinions one way or the other on every issue that they just can’t see how the opposite opinion to their own is even possible. They can’t see how a rational human being could think differently than them. Obviously, the biggest place we currently see this is in politics. More and more political...

Emerging Market Debt

A cura di Walter Snyder, Swiss Financial Consulting Emerging Market (EM) debt is a serious problem for the global economy. The situation becomes more complicated when a country has foreign debt denominated in US dollars. Even if the US dollar remains constant in Forex markets globally, the local company and/or government can find itself in difficulty if the local currency falls against the US dollar....

This Time There Are Differences

A cura di Walter Snyder, Swiss Financial Consulting The S&P has topped January highs. Investors who bought into the dip have done well. Now that the present recovery is the longest on record and the Fed is still set on raising interest rates, many observers reckon that the market could go even higher, as high as 3,000, before the reset begins. There is reason to think that all the share buyback...

The US Dollar Again

dollaro sterlina
A cura di Walter Snyder, Swiss Financial Consulting The US dollar is the main global reserve currency and most international transactions employ US dollars as the means of exchange. The US has exploited its dominant position in global finance to amass huge debts that are going to impact how Americans live and how international commerce is carried on. Americans live well and have continued to do so...

ESMA renew prohibition on binary options for a further three months

The European Securities and Markets Authority (ESMA) has agreed to renew the prohibition of the marketing, distribution or sale of binary options to retail clients, in effect since 2 July, from 2 October 2018 for a further three-month period. ESMA has also agreed on the exclusion of a limited number of products from the scope of the measure. ESMA has carefully considered the need to extend the intervention...

Capitalism works, don’t change it

A cura di First Trust “Wealth creation” versus “the redistribution of wealth” is an age-old political/economic battle. And once again, Senator Elizabeth Warren – among others – has capitalism in the crosshairs. Adam Smith defended capitalism in 1776. Karl Marx attacked it in the 1800s. William Jennings Bryant attacked it; Grover Cleveland defended it. FDR attacked it; Ronald Reagan...

Emerging Markets vs Wall Street

A cura di Walter Snyder, Swiss Financial Consulting The recent and not so recent turmoil in Emerging Markets (EM) can be considered as normal if one is willing to see the United States as an “exceptional” country. The currencies of Cuba and Venezuela have been languishing along with the Russian ruble that has been under attack for years. The Brazilian real and Argentine peso have done poorly not...

Oi Oi Oil

petrolio
A cura di Walter Snyder, Swiss Financial Consulting Despite all the hyperbole concerning alternative sources of energy, oil still remains the most important commodity in the global economy. It is therefore of extreme importance that the flow of oil continue without interruption so that business goes on as usual. The unilateral US imposition of tariffs and restrictions on Iranian oil is going to have...

The Double Edged Sword of Avoiding Value Traps

A cura di Jack Forehand Value investing is full of pitfalls. It is easy to think that as a value investor all you need to do is buy cheap stocks and eventually the market will come around to your way of thinking, but that just isn’t the way things work in the real world. Many value stocks are cheap because they deserve to be. Some of them no longer have sustainable businesses, and as a result their...

Tectonic Shift

A cura di Walter Snyder, Swiss Financial Consulting The last wsletter noted that the almighty US dollar has recently strengthened while the Chinese renminbi has weakened. The Forex market indicates what is going on with currencies daily but it is not exactly like a canary in a coal mine. Unfortunately an approaching crisis is not necessarily marked by ups and downs of a currency as the death of a canary...

Dollar Up, Yuan Down

Usa Cina
A cura di Walter Snyder, Swiss Financial Consulting Forex traders will have surely noted the downward trend of the renminbi. At the same time the US dollar has reinforced its position. In fact President Trump has complained that a strong dollar practically nullifies any beneficial effects that might result from the imposition of tariffs on imports. A strong dollar likewise makes it more difficult for...

Follow the Dollar Trend

A cura di Walter Snyder Forex traders know that following a tread is usually a good bet and leads to profitable trades. Always setting a stop loss is necessary to be sure that sudden reversals are only minimally painful. Only rash traders will neglect setting a stop loss, and they sometimes rue the day that they started trading. The US dollar has been discussed several times in this Newsletter, and...

Servicing the Debt

bond obbligazione treasury
A cura di Walter Snyder The US Debt Clock notes that the current expense of servicing the federal government debt of US$ 21.2 trillion is $303 billion. This means that the Treasury has been paying interest of “only” about 1.4% on the debt. The amount of money that the Treasury will be paying out in interest on the debt is going to increase markedly very soon. It could easily double. One reason...

Deep in Debt

bond obbligazione treasury
A cura di Walter Snyder The next crisis is going to be due to debt. 2000 saw the dot-com bubble, and the Great Recession was due to subprime housing securitization. This time is different. A decade of QE, ZIRP and NIRP has resulted in misallocation of capital, which is naturally bad for capitalism. Corporate share buyback programmes have buoyed Wall Street and increased corporate debt. At the same...