March 2020

COVID 19 – The Virus, The Economy and The Markets

The impact of COVID-19 on the Global Economy

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January 2020

The 2019 Event Horizon

I am writing this commentary on New Year’s Eve.  In 2019 the Central Banks of the world, led by the US Federal Reserve, proved beyond all doubt that we have passed the point of no return in our current economic system.

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November 2019

The Grim Repo Market

In this commentary I am going to cover some very unfamiliar territory for most readers:  The machinations and inner workings of short term monetary markets.

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October 2019

Our Brexit Trade II

It not about BREXIT, it’s about the election!

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September 2019

Our Brexit Trade

This is the first time we have published a comment on a position or trade that we have instigated.  But given how topical Brexit is we thought readers might be interested in our approach.

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August 2019

Highly Speculative Capital Markets:  Part II – Stocks

In Part One I argued that bond markets have become highly speculative. Investors who traditionally invest in bonds are being out-bid by government departments (e.g. the European Central Bank and the Bank of Japan). This has forced cautious investors away from ‘safe assets’ like bonds or cash deposits and into other markets like stocks and property.

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August 2019

Highly Speculative Capital Markets:  Part I - Bonds

Traditionally bonds sought to provide investors with an income stream – coupon payments.  Alternatively an investor might buy a bond at a discount, for example give €95 to receive €100 in a year.  In short, the investor is offered a profitable outcome.  But how do you value a bond that offers guaranteed losses?  Our capital markets today offer a cornucopia of bonds that guarantee losses for investors.

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June 2019

Hastening the Inevitable Decline of the US Dollar

Much of the United States foreign policy is focused on restructuring and ‘improving’ its trading relations around the globe.  This is achieved through the threat and application of trade tariffs, ‘dollar’ sanctions and some hitherto new diplomatic language as demonstrated by the quotes given below.

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May 2019

Japanification

Since Japanese Asset prices peaked in 1990, the Japanese economy has been plagued with low inflation, interest rates and economic growth. Could other developed nations now be falling into the same 'liquidity trap'?

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March 2019

Interest Rates – Part I – A Broken Market

Interest rates markets are the engine room of capital markets. The interest rate at which savers will lend capital to borrowers is perhaps the single most important ‘price’ in any economy.  It is the keystone of an economy.

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March 2019

Interest Rates – Part II - Will The Market for Rates Re-Assert Itself?

The 2007/08 global financial crisis was largely a crisis of debt.   It is hard to envisage a recovery from this crisis without an improvement in debt.   That is, an intelligent person would reasonably expect debt levels to be lower now in 2019 if we are in fact in a recovery.  However this is not the case, global trends in debt and interest rates have taken no discernable change in direction.

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March 2019

Interest Rates - Part III - The Wealth Transfer Window - Inflation

Inflation is good for debtors, both public and private. However inflation is bad for savers and people on fixed incomes.

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February 2019

Market – What Market?

Everybody knows what a market is, right? Wrong. Today we have market places that look and sound like the real thing. But they are not markets.  A market place should be dominated by ‘economic players’.

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December 2018

Sit Back and Buckle Up for 2019

I am writing this on New Year’sEve. Less than two weeks ago the FederalReserve indicated that it would hike interest rates by 25 basis points two more times next year.  However, today the market is pricing no increases in 2019 and a cut in rates in 2020. That is an extraordinary turnaround in the market and indicates severe stress in markets.

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June 2018

Trump and Debt

For the purposes of this report, I am not in the business of commenting on Donald Trump’s short comings as a human being. My interest in politics only relates to asset prices. Trump is a very unique politician. If we think of AngelaMerkel, Theresa May or even our own Leo Varadkar, we think of managers. They generally are trying to chart a steady course. They make no tangible promises and are happy enough to go along with the political / diplomatic / economic consensus. And that consensus is generally formed and propelled by ‘mainstream’ media.

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January 2018

A Comment on Cryptocurrencies

The open ledger is an exciting prospect.  Allowing and encouraging third parties to validate transactions and events is a smart idea that can deliver real value.  It can cut out a lot of replicated record keeping, verifying and general administration tasks.  This delivers a lot of cost saving from the lifecycle of a product being created to being sold.  So far so good!

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January 2017

Why Did Isaac Newton Loss a Fortune In The Market?

Celebrated British scientist Isaac Newton famously lost a fortune in the South Seas Market mania in 1720.  His comment sprung to mind earlier this year while I was reading an article on why seemingly intelligent people lose fortunes in markets.  

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January 2017

Appearances v Reality

It has been said that central banks can change how things look or appear by fiddling around with interest rates and printing new currency units to purchase assets.  But they cannot change how things actually are.

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July 2015

China - State V Market

The Chinese stock market exploded by 50% in the 4th quarter of 2014.  The rally continued into this year with the Shanghai Index rallying from 2000 last summer to over 5000 this June.  It has fallen 30% in the last 3 weeks despite government attempts to stop it.

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July 2015

European Political Liars v Greek Wing Nuts

The best way to understand the standoff between Europe and Greece is contemplate the undeliverables.

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December 2014

Everybody Is Blowing Bubbles - Part I - Central Bank Shenanigans

There is no question as to who is responsible for the various stock market, art, property and bond market bubbles.

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December 2014

Everybody Is Blowing Bubbles - Part II - Wealth – Demand and Supply

The chart below is quite complex, but is worth taking the time to think about it.  The chart demonstrates the magnitude and durability of central bank interventions since 2008.

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January 2014

Perpetual Debt Creation

You may have read that the Federal Reserve will reduce its monthly money printing by $10Bn. This distracts attention away from the fact that they will still create 3.5Bn new dollars every business day.

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July 2013

Bad News is Good News

The world financial system remains a Ponzi scheme. The 2008 global financial crisis is still in full flow. It is very difficult to measure your wealth in Dollars, Euros, Yen, Francs or Pounds when central banks create ten thousand million Dollars’ ($10Bn) worth of new currency units every business day of the week. The USA and Japan alone count for about $6Bn every business day. This new money is lent to governments, given to banks and now increasingly used to buy companies listed on the stock market.

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April 2012

Greek private bond holders get a wash and blow dry

The World banking system is clinically dead. Political institutions such as the Troika are keeping it on artificial respiration and a host of other life supports systems. New money, which is actually new debt, is being created by central banks to maintain the illusion of a solvent international banking system. Consider the latest farce in Greece.

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January 2012

Rehypothecation and the Collateral Crunch

The forces of inflation and deflation are continuing to impact the markets and the economies of the world. Main Street is still in the grip of a deflationary bust. The ordinary citizen of the western world cannot get credit. There are three reasons for this:

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The pre 2019 commentaries are from our archives. Our archives include 15 international property investing guides, 18 Asian country investment reports, 7 industry investment reports (Shipping, Uranium, Rhodium, Lithium, Palladium, Platinum and Cryptos) and numerous individual stock reports. These are made available to our clients.