Cluster Family Office Blog

Although it may go without saying, it is important to note that we are now at the end of the US trading session on Friday 14 September 2007. In other words, returning to the possible scenarios we outlined in The myth of the Bin Laden Options and the responsibility of the investor:

«If, as is to be expected, there are no major global terrorist incidents in the coming days, we will continue to make the most of the current opportunities and try to slowly heal the wounds caused by the threat of »credit crunch.'"

It seems that healing is still a long way off, although, as we mentioned in that same article, the situation could become much more complicated at this particularly delicate time.

The global economy is going through a period of turmoil, much like that experienced by the passengers on a plane when the pilots detect abnormalities mid-flight. The tranquillity of a journey – during which comfort had made the passengers and crew forget that they were at an altitude of 10,000 metres, travelling at a speed of 950 km/h and with an outside temperature of 25 degrees below zero – has suddenly been shattered.

Many passengers are now realising that they are travelling on a craft with many hours of flight time under its wings and in its engines, whose materials are suffering from significant fatigue and which, as always, is packed to the brim with passengers and luggage. The extreme cost-cutting measures applied to the aircraft and the omission of maintenance checks that were not strictly essential may well have been the cause of the malfunctions that are now a source of concern and regret for many. It is too late now. The only useful course of action now is to remain calm and tackle the situation with rigour, composure, intelligence and fortitude.

Although some passengers have panicked, most are still keeping their cool. In fact, the situation appears to be under the crew’s control, and although some warning lights are still on, the aircraft’s vital systems are continuing to function correctly. The atmosphere in the cabin is tense because the alerts have been coming on one after another and, although the situation is currently well under control, nobody knows which warning light might start flashing at any moment. These are a series of malfunctions that have occurred in quick succession; some are insignificant, whilst others require the pilots’ calm but constant attention. One thing is clear: the aircraft is experiencing problems and must be diverted from its original route. Although some reckless passengers remain determined to reach their destination at the scheduled time so as not to lose a single minute of an all-inclusive holiday they will be paying for in convenient instalments. But the reality is very different.

The pilots have already adjusted the heading, speed and altitude by making technical adjustments to the aircraft and managing its mechanical resources efficiently, so as not to dangerously overload the systems that are still functioning without any problems. Using the systems the aircraft still has, they will attempt to reach the nearest airport where they can land and carry out a thorough technical inspection. If they succeed, let us hope that this time the airline will insist on all the necessary replacement parts and make the financial commitment it failed to make when it should have. Even if this new policy means a rise in prices and some of its current customers have to stop flying so often.

With a closer destination, at a lower altitude and speed, they hope to avoid any mishap and ensure that the passengers can disembark from the aircraft without suffering any harm other than the inconvenience inherent in having to radically alter everyone’s plans. But to achieve this, they must maintain a calm and methodical approach; the crew must act with rigour and professionalism; and they must hope that no further faults occur that could affect the vital systems of the old and overworked aircraft.

The company failed to do its homework at the time and lacked the financial rigour required to maintain the aircraft; passengers spent the money they’d saved by flying on a low-cost airline on fleeting indulgences and exceeded their baggage weight limits; one flight attendant even abandoned her duties in the midst of the crisis to scream hysterically, hindering the work of the other responsible passengers. Let us hope that the majority continue to do the right thing and that the passengers only have to abandon their original plans. They will have to adapt to a radical change of course involving a forced stopover, with all its many inconveniences and financial losses. Although let us hope that this is merely an unpleasant change of plans and that we manage to save what is truly important.

As we said at the start, although it may go without saying, it is important to note that we are now at the end of the US trading day on Friday 14 September 2007. We will continue to capitalise on the opportunities that arise in any crisis, adapting as best we can to the new circumstances and trying to turn the situation around without seriously damaging the vital systems of our economy.

A couple of weeks ago, I told you about Buffett and his elephant hunting. Today I’m going to talk to you about some others animals which receive less favourable press coverage, but are no less important or necessary in the food chain of the Economic System: The Scavengers.

These are the companies and executives who take advantage of other companies’ moments of uncertainty – and even distress – to make opportunistic acquisitions. These are undoubtedly rather unsavoury financial transactions, and some are as unethical as the laws of the market themselves. But they are necessary, just as scavengers play a prominent role in the food chain, or scavengers.

A company in genuine difficulty or already bankrupt must be utilised appropriately by others. Its assets, human resources, tangible fixed assets, goodwill, etc. – everything must be recycled for the good of the ecosystem. Takeovers and acquisitions of valuable parts of what was once (perhaps just yesterday) a romantic, generational corporate adventure form part of Darwinian natural selection. Life and death in the jungle That’s how it is.

As early as July, the first blatantly obvious investment opportunities began to appear scavengers, such as the Distressed Subprime Fund Marathon.

Today we can see plenty of examples of scavengers having a field day, although some prefer to call themselves sharks: Blackstone, Citadel or Deutsche Bank itself. But not all of them are simply scavengers with the the ability to turn a crisis into an opportunity but amongst them we also find illustrious visionaries such as Passport Capital LLC, which was already unwinding its subprime positions before the summer, thereby securing substantial capital gains and earning the recognition and admiration of its competitors.

Elephant hunters, scavengers, sharks, scavengers… It doesn’t matter who they are or what we call them; they form a vital part of the food chain. So vital, in fact, that I would say they contribute more than almost anyone else to the sustainability of the economic system, or rather, Ecosystem. I have the utmost respect for all of them, as they are the best antidote to the effects of the panic and hysteria displayed by some.

There’s been talk for a few days now about the Bin Laden Options, that is to say, options that have allegedly been bought up on a massive scale and which would generate astronomical profits should the US markets crash before the end of September.
I find it highly implausible that the US intelligence services would fail to detect and thwart such mass movements. If they had taken place, they would have been thoroughly investigated, just as they were a in retrospect, regarding the unusual put options on airlines taken out shortly before 9/11 in that fateful year of 2001. The outcome of that investigation was, on the one hand, the investor in question providing a valid justification as a hedge for other open positions; and on the other hand, a recommendation from a stock market magazine that led to another significant purchase shortly before the attacks. Everything was thoroughly traced, investigated and clarified in hindsight. Given this background, it seems implausible that large-scale operations could be carried out by the masterminds behind potential attacks in the coming days of September without the knowledge and subsequent reaction of the FBI or the SEC.

It is another matter entirely if an investor chooses to bet on a fall in the indices in the days leading up to 9/11. Obviously, that is an option like any other, and there are bound to be many such positions in the market at present. But any that are particularly significant will undoubtedly be monitored and investigated.

However, no one should be under any illusion that we are currently facing the most difficult period in our global economic system—I would go so far as to say, since 1929. In a scenario such as the present one, a potential attack on the scale of that of six years ago would cause serious damage to the confidence and investments of most of the world. Undoubtedly, the current credit crisis, combined with an attack of enormous proportions, would send shockwaves through the very foundations of our global economy. Panic would only serve to amplify this, although I am convinced that things would eventually return to normal sooner or later.

For all these reasons, I would like to explain my personal view of the situation:
1. It is true that we could see a large-scale attack or attempted attack around 11 September. If, for a moment, we put ourselves in the shoes of an Islamic fundamentalist fighting to bring down the American enemy and its financial system, we would, if we could, take advantage of the current credit crisis in the system to try to cause as much damage as possible at the worst possible moment.
2.- If, unfortunately, this were to happen, it would present another golden opportunity for our investments. After all, what would truly be unthinkable is the possibility that the global economic system might collapse irrevocably, giving way to who knows what.

Personally, I have always been convinced that Bin Laden died buried beneath one of his caves or as a result of a cluster bomb during the war in Afghanistan. Let’s not forget that he used to treat us to a new provocative video every week until one fine day he decided to stop making short films. Since then, we’ve had nothing but the odd audio tape of appalling quality, featuring a voice that could belong to any of his heirs. Perhaps his camera battery ran out and he never found a power socket again, but I prefer to think he simply died. However, a French newspaper reported his possible death from typhus in Pakistan over a year ago. The uncertainty of not finding the body and a strategic decision by the CIA have deliberately kept his image alive for some indecipherable purpose.

In any case, if – as is to be expected – there are no major terrorist incidents on a global scale in the coming days, we will continue to make the most of the current opportunities and try to slowly heal the wounds caused by the threat of credit crunch. And if, unfortunately, we were to suffer a global attack, some would panic whilst others would carry on elephant hunting, as always. Whatever happens, we must invest responsibly, as hysterical speculation can damage the system even more than the bombs themselves.

Charles Ponzi, Parma (Italy) 1877–1949. He was famous for what is known as the Ponzi scheme, which was nothing more than a large-scale scam caused by a shortage of postal coupons that he was brokering from Spain to the US, where he had been living since 1903 as just another emigrant. He received these coupons via Italy through an arbitrage scheme that generated a staggering profit of 600%. He offered family and friends the chance to join the scheme with a 45% return over 90 days, but was soon overwhelmed by demand. The whole of Boston wanted to get involved in the «Ponzi scheme», and he received requests for as many as 200 million coupons. Faced with an avalanche of demand that made it physically impossible to cover the returns with the corresponding coupons, Ponzi decided to pay investors’ interest using the new daily contributions he received. A pyramid scheme with disastrous consequences had been created, which led to his imprisonment and brought his fleeting opulence to an end within a few years. In fact, he died in a charity hospital in Rio de Janeiro, in utter poverty, at the age of 72.

Is credit abuse comparable to its securitisation Is the current situation comparable to a Ponzi scheme? In a way, we could say so. At the very least, the increase in demand for credit that our economic system has experienced in recent years can be extrapolated. But there is no doubt that the main responsibility is widely shared: it lies with the financos They securitised everything that could be securitised and more; the investors who leveraged beyond belief, with and without, are also in the same boat. carry trade, the blame lies with the credit rating agencies which, whether in good or bad faith, did a very poor job, and the list could go on until it offends more than a few people. In any case, we must acknowledge a certain Minsky Moment, as is quite rightly pointed out by Gurusblog, which has excessively increased Ponzi-style lending.

Although what Ponzi did in his day was a massive scam that ruined thousands of people, perhaps we shouldn’t demonise the Ponzi scheme, because let’s not forget that our National Insurance system practises it with malice aforethought and with no other option to meet its obligations. That said, it is worth noting that in future the pension system may not be sustainable due to increasing life expectancy. If we were truly supportive and politically correct, we should die at the age of 70 to preserve the system. If Ponzi were to rise from the dead…

Monday 27 August 2007 – it has now been a couple of weeks since the major tremors in what has come to be known as crisis subprime. To date, mere aftershocks of the crisis, high volatility, erratic stock markets and various news stories along the same lines: «It is still too early to gauge the extent of the mortgage crisis», «We need to monitor how the markets develop», etc. Obvious truths framed within a moderate pessimism which, in my opinion, reflects the actual situation quite accurately. Of course, I won’t even go so far as to comment on the sensationalist voices seeking the limelight in the very style of a aquihaytomate financial, which has been very well described Rebuzner.

I believe that in the coming days we may see further sudden shocks to the financial system, and I am not referring solely to the stock market. Just when public opinion and the markets have become accustomed to the new situation, and it has been given a name that is more or less accepted by experts and laypeople alike, and it seems we can let our guard down or relax the state of alert we have been in over the last few weeks, a new shock usually strikes. Perhaps this won’t be the case and we’ll continue to heal, very slowly, the wounds caused by this globalised credit crisis, but I fear we may once again see situations that put the world’s central banks under renewed strain.

By this I do not mean to suggest that we are heading towards a chaotic or uncontrolled situation that exceeds the system’s capacity, in the very style of the sensationalist media outlets mentioned – not at all. It is simply that, in times of difficulty which are likely to drag on, it seems as though the bad news is being doled out naturally so that the entire global financial system can gradually come to terms with it. In this scenario, just as we begin to come to terms with the new realities and relax the muscles that were tensed by our reactions whilst reading the economic news, we must be prepared for further shocks. I do not know whether this is a universal law that regulates our capacity to cope with adversity or mere coincidence, but in the aftermath of a financial crisis such as the one we experienced this August, it seems that: No news, bad news.

It is possible that the sporadic fluctuations we may experience over the coming days are nothing more than minor aftershocks of the initial earthquake, and therefore we should not envisage a scenario different from the one we have already accepted globally. It is even possible that we will not experience any significant aftershocks at all, and that the credit crisis will gradually but orderly subside throughout our system. But precisely in order to avoid unnecessary and dangerous panic, we must be prepared for some unpleasant surprises in the coming days. And rather than whingeing or proclaiming the end of the world through the media, let us continue to adjust our scenarios as necessary and seek out and find excellent investment opportunities. Bad news, good opportunities.

It’s been almost 4 months since Warren Buffett he went out hunting. He’s always liked to boast that his company has more money than investment opportunities. Personally, I reckon he proclaimed loud and clear that he was off on a big-game hunt to show off by bagging an elephant, rather than just chasing a partridge, as other hunters do. Instead of to sheathe Dressed in classic camouflage, he fired into the air in late April as soon as he left the house. In all likelihood, he did so as a lure for some domesticated pachyderm eager to be shot by such an illustrious hunter. For some animals raised in captivity, it is a real honour (and a business opportunity) to feature in the trophy room of Berkshire.

Once again Buffett has created his own Good luck and is in the right place at the right time with the pencil case to the brim. That’s right, right before his eyes has appeared a magnificent wild elephant that had no intention of being hunted, but which circumstances have forced into the crosshairs of Buffett. It’s called Nationwide and has meant that, at the age of 76, the old hunter still has the same sparkle in his eyes as when he shot M&T; Bank o Wells Fargo, all of which belong to the same sector.

This subprime-crunch The situation we are currently experiencing will ruin many, but it also presents a historic opportunity for those who know how to seize it, whilst others flee in terror and panic towards the refuge of a triple-A sovereign rating, even if it is at the cost of a yield derisory.

The Master Warren Buffett, once again, it shows the way forward. It is the most responsible and interesting of the options. If Nationwide It is a valid option, but investments in fixed-income securities not linked to mortgages are just as valid, if not more so subprime, from both non-financial and financial sectors. We currently have A-rated corporate debt and AA well below par, even below 90, with yields more than just interesting. In other words, genuine opportunities in the fixed-income market that are visible only to a select few with foresight.

Unfortunately, most average investors continue to focus solely on stock market indices. They even use the equity market as a yardstick to gauge the severity of the current credit crisis. Fortunately, however, the Economy with a capital ‘E’ is not just the stock market, but much more besides. The state of the economic system may worsen or improve with little regard to what happens to the indices of the DJ, DAX o FTSE. There is no doubt that these markets will ultimately reflect the System’s true state of health, but focusing solely on them It’s like watching the faces in the crowd instead of watching the match.

Anyway, as he says Rebuzner in his latest post, these days it’s all the rage to talk about chaos and stars widespread. Meanwhile, other Masters are going about their business, which, once again, benefits us all.

It has been 5 days since our final analysis of the situation. And the reactions of the entire financial system seem to be in line with our expectations. In recent days we have seen how even Russia has collaborated to provide liquidity to the interbank market. And today the EDF has decided to cut discount rates on loans to banks by half a point, from 6.25% to 5.75%. The effectiveness of this move will be tested in the coming days, but it seems technically very appropriate.

Personally, I believe that the soothing effect that has been produced by the this decision The US Federal Reserve's decision will only be temporary. Widespread volatility seems assured and we may continue to see significant falls in stock market indices around the world, as well as significant falls in institutions and investment funds that are in real trouble. But there is no doubt that the scenario at 5.75 is better than at 6.25, and we believe that the way forward has been shown.

What is truly vital in the current historical moment of absolute uncertainty is to make our way day by day by resisting the total chaos in which all markets and sectors could fall. In other words, for almost a week now it has been globally accepted that we are in a critical situation in the System. And yet ministers, central banks and the top managers of the world's largest financial institutions seem to be working together towards a common goal: to avoid the chaos that would ensue if the crisis that began in the US mortgage sector were to spread to the rest of the economic system, bringing it crashing down like a house of cards. By this I do not mean that the world economy has no solid foundation to stand on, but that widespread panic would accentuate the destructive effects of the collapse of some investments that are made of ethereal and contagious products. We talked about this type of investment based on financial engineering that is too far removed from economic reality in a previous post. Curiously, we already warned then, exactly on 20 June, We were also aware of the sense of danger or uncertainty that we were already detecting at that time. Although we did not say that the trigger was the US mortgage risk, we did mention a scenario like that of the 1929 crash or a globalised crisis.

In spite of everything, it seems to us very positive that the tools of the global financial system itself continue to be applied to alleviate as far as possible the crisis that the entire economy is going through. More importantly, the first voices are beginning to be heard in favour of greater control of high-risk financial operations. This is positive in itself, although obviously no one has any idea yet who and how this should be done.

Let's continue to live history with serenity and intelligence, and let's clean up only what is necessary without spoiling the rest of the Economic System. To be continued...

It has taken a period of stock market turmoil for some investors to realise that we are living through historic times for the global financial system. Put like that, it sounds apocalyptic, and indeed it may well be; but we are also facing an opportunity for financial authorities around the world to continue demonstrating their responsibility, competence and ability to view the global economic landscape from a global perspective.

But before we delve into reflections that might at first glance seem exaggerated, let’s briefly summarise what has happened and the situation we have reached, even though many people are still unaware of it.

1. The stock market volatility of recent days is nothing more than the visible manifestation of the underlying turbulence caused by the US mortgage crisis.
2. Mortgage abuse, falling house prices and rising interest rates have led to a high proportion (14%) of mortgages going into default in the US. It is worth noting that a similar scenario could easily apply to Spain and parts of the EU.
3. This default has led to a fall in the value of funds and assets based on this type of debt, as many of these non-performing loans had subtitled and recklessly leveraged. A Bear Stearns two of his funds were written off: High-Grade Structured Credit Strategies Enhanced Leverage Fund y High-Grade Structured Credit Strategies Fund (the latter having some residual value given its lower leverage). Other major banks such as BNP are also facing their own problems.
4. The public outcry This also makes investors reluctant to buy corporate debt. This jeopardises corporate transactions that have nothing to do with an American failing to pay their mortgage, but it hinders global business growth whilst increasing risk aversion among investors.
5. These problems are amplify due to various factors, including: a) Securitisation or securitisation of these mortgage debts of doubtful recoverability by packaging them as assets attached to more secure mortgage debts. This apparently dilutes the risk to make them more marketable, but in reality it is creating a route of transmission from the crisis to products that should not be affected by defaults. b) The leverage that financial institutions generate in order to capitalise more fully on the substantial returns from these products. The debt incurred through these funds will become another route of transmission for the rest of the economy.
6. The timing of the contagion It is unfolding gradually: the securitisation of subprime mortgages, corporate debt, a reluctance to engage in frivolous interbank lending, and nervousness in the equity markets, although the latter is of little consequence given the gravity of the underlying problem.
7. A coordinated, sustained and long-standing effort by the world’s major central banks to prevent dry the cash flow of the system.
8. Outlook: Unpredictable, although we do not believe the situation will be catastrophic for a number of reasons, which we will explain below.

People today tend to react to problems in a narrow-minded way, whether for the sake of the nation, a corporation, a race, a religion, and so on… But when faced with exceptional problems, humanity must—we must—be capable of responding on a global scale. Why? Quite simply, because the stakes are too high: the financial system – in other words, everything. One example of which we should be proud is the intervention widespread, concerted and proactive by central banks to breathe new life into our economic system. The EU, the US, Japan, Australia, Canada, Switzerland and Norway have already done far more than just make a symbolic gesture for the financial well-being of us all. South Korea and Indonesia, amongst others, have also committed themselves, and this is only the beginning. I am fully convinced that the response, based on solidarity, will be historic, even from China and some Islamic countries. We are all in the same boat. If our economic system fails, it fails all our mode Vivendi, and our planet would be set back by many generations. Such global solidarity can only arise in the face of catastrophes that we have only ever seen in science-fiction films, or in situations such as the current one, where the stakes are even higher than climate change or a bird flu pandemic.

For all these reasons, it seems logical to me to think that this event, which brings us closer than ever to the 1929 crash, will serve to strengthen our financial system and make it more resilient in the future. I believe, and I want to believe, that the measures we will see taken by all The world’s economic authorities over the coming months will feature in future economics textbooks. We are probably laying the theoretical foundations for the protocols global which must be implemented by all countries worldwide in the event of future crises and major financial instability.

Having said all that, I want to make it absolutely clear that my personal view is an optimistic and positive one. And that the success or failure of our financial system depends largely on our collective willingness to keep a cool head and our investments active. As I say in the title of this post, if we can turn this scenario into a historic opportunity instead of a hysterical breakdown, we’ll come out on top, with the system even stronger than before. But if that doesn’t happen, we’ll all end up doing ourselves a great deal of harm.

Faced with this scenario—whether one of normality or collapse, which we ourselves will bring about—the question we must ask ourselves is: Where are we going to put our money if we no longer lend it through the financial system to keep things running smoothly? Do we really think that creating a macro-corralito Will a global approach spare us any harm in terms of the risk of continuing to rely on the system? Common sense will save us, whereas panic would be the greatest act of self-destruction in history.

Tomorrow, Monday, we will see how the world reacts to this unprecedented situation. Nervousness and volatility are guaranteed, but above all, we must have confidence in ourselves. We may see sharp corrections in the credit spread, stock market volatility with ‘Black Fridays’, ‘Black Mondays’ and ‘Black Days’ on any day of the week, sharp adjustments and corrections in macroeconomic figures, etc. We might even, why not, see a certain normality from now on and tiptoe past all the dangers mentioned as if it had all been nothing more than a nightmare. In any case, it will be a positive step. The one option we cannot afford is a global economic collapse. As far as we are concerned, it is very clear what we are going to do and what advice we will give our clients: we will continue to have faith in the system and try to make the most of the opportunities that arise in any crisis. What else can we do that won’t lead to our own downfall?

Keep a close eye on developments over the coming days and weeks. Are we as clever as we think we are?

The link between the fall in equity markets and the subprime crisis strikes me as exaggerated, but that does not mean it is any less of a dangerous scenario. As Kretan quite rightly points out in his latest post with regard to the RV, we are currently experiencing a period of high volatility and sharp swings, making it difficult to decide whether to stay in or get out.

As for the crisis in RF subprime It must be said that this is a sector that should have little impact on ordinary investors, as they tend to invest their assets in debt investment grade and, to a much lesser extent, in debt speculative. The thing is, with the uncertainty surrounding low-rated mortgage debt, also the credit spread of the debt prime It is being hit hard and in an alarmingly widespread manner. The pendulum effect is driving money towards absolute safety, right at the opposite end of the subprime spectrum, which has also had a negative impact on the performance of debt with very reliable ratings. That is why practically only US Treasury bonds have rebounded, causing their yield is significantly affected. However, the risk of investment grade remains virtually unchanged both before and after the US mortgage crisis. Therefore, this fall in the credit spread In our view, this presents an opportunity to acquire prime corporate debt at very attractive prices.

It is true that volatility is very high and that we can see corporate debt prime fall slightly further, or even considerably further if the subprime crisis worsens, with the resulting public outcry on the Russian markets. But perhaps it won’t. And even if we accept that prices may continue to fall, we consider current prices to be very attractive for building a position as a medium- and, above all, long-term investment, even in a scenario where there is a possibility ofFurther interest rate rises in Europe. We therefore believe this is a very interesting time to take positions in US fixed income as well, given that volatility is higher but the upward rally in interest rates is more limited. And what is most important to us: the outlook for US businesses is far more promising, given the current weakness of the dollar, than the corporate outlook in Europe. I repeat, this is always with a view to analysing these investments at least in the medium term.

Not all investors should be prepared to lose a significant proportion of their assets in the equity markets. Some should even be content with returns of almost double-digit figures for a substantial portion of their assets. However, for stock market investors who are only willing to take risks in exchange for short-term returns (whether good or bad), fixed income is unlikely to meet their expectations for speculation, nor will it even provide them with the adrenaline (ast) they want.

Many small and medium-sized investors may feel that fixed-income investments are not an option likely to yield returns that exceed post-tax inflation. But as I have said on other occasions, There’s life beyond fixed-term savings accounts. Especially when you have the ability and courage to see the crisis as opportunities.

It seems that the real new world order is being shaped by the currencies of the two giants, US.US. and China. Let’s recall what we said in the first part of the post with the same title a couple of months ago:

It seems clear to us that this empire of in fact (China) is not prepared to throw away the hand it has been playing for the past few years, even though it continues to cheat. It may well end up accepting the other players’ rules in a few years’ time, but there is no denying that it wants to keep playing. And it wants to keep playing because it is winning, and with every passing day it gets closer to the level of the gamblers with whom he shares a table and whose faces poker watches it fade as the game progresses. Everyone knows that when China is forced to stop cheating and continues to grow faster and more effectively than the rest of the world, it will already be leading the global economy.

Every day, the strategy of US.US. to keep your heart rate up poker-like with the cheater sitting opposite him. It seems he couldn’t care less about kicking the other players out of the game. Perhaps that’s how it has to be if we want someone to stand up to the Chinese giant that refuses to allow its currency to float freely.

In the evolution of the yuan with regard to euro and to the dollar In recent years, we have seen these strategic differences clearly. And therefore, if these trends continue for a yuan, which is getting weaker and weaker against the euro and other Asian currencies, will undoubtedly cause a great deal of damage. That is why we are saying that it seems as though the departure of poker It's now just a matter of two. China continues with its tricks, US.US. is striving to weaken the dollar as much as possible in order to mitigate the dire effects of the current account deficit (which now stands at 857,000,000,000 – 1Q4Q). It is no surprise, then, that the dollar is currently trading at 7.565 yuan, whilst the euro stands at 10.435. Whether for different reasons or not, the yen It seems to be following in the dollar’s footsteps, but I repeat: it will be a two-horse race.

As our much-admired [name] once put it Rebuzner: «If, ten minutes into the match, poker, if you don’t know who the sucker is, then it’s you.» Even if he benefits from the carry trade, ... it seems clear that Japan hasn't ended up playing the fool. By this I mean that the EU should take action in light of the direction the global gambling industry is taking. As you can see from the charts linked from the yuan, only the trade balance of US.US. you can plant something facing the GDP China's GDP grew by 11.9% year-on-year in the second quarter, although in the West provide for settings.

All in all, it seems that currency fluctuations will play a significant role in the new world order, even though some people still mentally stuck in the €/$ exchange rate or in the US dollar as a strong reference currency against the rest. But as I have said on previous occasions, currency speculation is the mother of all speculation, and in the markets one must be very humble when seeking clues. I believe in the weakness of the $ whilst the yuan remains artificially pegged to that mysterious basket of currencies, but I believe this to be the case, in all humility.