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Pº de la Castellana, 93 2nd floor MADRID 28046
We look after your interests
Torres Sarrià, Carrer de Can Ràbia, 3-5, 4ª Planta BCN 08017
Pº de la Castellana, 93 2nd floor MADRID 28046
(more…)
Edward Misrahi, manager of Ronit Capital, ex-partner at Goldman Sachs and Eton Park, recently stated in an interview with Businessinsider.com that his number 1 choice to hedge a portfolio against a generalised fall in the markets would be Deutsche Bank shares. He warns that any European bank has a very uncertain outlook, whether it is Portuguese, Italian or British, affected by Brexit. But his preferred insurance policy in the event of a tail-risk would be to sell the shares of this German bank, for which he predicts a forthcoming nationalisation as the only way out to avoid a general banking collapse. (more…)
The foreign ministers of France (Jean-Marc Ayrault) and Germany (Frank-Walter Steinmeier) have bilaterally agreed on a series of proposals that radically contradict the model of the European Union that Euro-bureaucrats have been selling us for decades. The million-dollar question is to whom they are proposing this new Europe, and whether this declaration of intent is just that or rather a full-blown announcement of the new path that the hard core of European countries, starting with the Franco-German axis and adding Benelux and Italy (more for its founding history than its current economic state, obviously), will embark on. (more…)
The analyst John Mauldin, The EU is facing profound changes after the result of the British referendum. It remains to be seen whether the exit finally takes place that the people have demanded of their leaders, since politics in general, and the EU in particular, are specialists in disregarding the will of the people even if there has been a transparent and official vote count. It is not for nothing that the Euroschizophrenia seems endemic for as long as the Old Continent has existed. In any case, even if the UK did not end up leaving the EU, the problems that Brussels would face are and would continue to be enormous. So let us number some of the burning issues that Mauldin believes the EU would still have on its hands even if Bremain had won: (more…)
Brexit has happened and nobody knows how it came about. The bureaucrats on both sides of the English Channel had everything under control – except the ballot boxes. The trouble is that a «madman» called Cameron decided to bet the farm on black again, just as he did with the Scottish referendum, only this time red came up. And of course, when a leader wins a referendum, he becomes the hero of democracy in the eyes of the whole world. But when he loses – and the result of the vote harms many, as seems to be the case with Brexit – he becomes a villain who has put others at a risk that is as unnecessary as it is reckless, all because of his gambling-addicted ego. In such cases, democracy takes a back seat and no one remembers that this result reflects the will of the majority of the people, nor that this is the very essence of our political system.
Although for many the line between the two may be blurred, the economic interests of the financial system should not take precedence over the political system – that is to say, over democratic decisions – even if those decisions are unfortunate or reckless. Europe should not succumb to the temptation to govern the EU according to economic rather than political guidelines, determined democratically. But the reality is that we have an EU whose president is not the result of an electoral process such as that in, for example, the US. And there are extremely powerful lobbies (the Troika) which exert unbearable pressure and which, in practice, wield more power than the unelected president (Juncker). (more…)
In today's financial and economic times, as an old friend often says, it is urgent to wait. This is not a time for long-term investment ventures that are susceptible to macroeconomic changes or geopolitical conflicts, which are more uncertain than ever. The steps that investors must take in such a muddy environment must be short, stable and prudent. It is more true than ever that the concept of crisis is synonymous with opportunity, but this does not mean that we should not take ambitious and adventurous steps when a mine-ridden swamp surrounds us. (more…)
Various media analysts, such as the WSJ o BusinessInsider, reveal that something unusual is happening with US interest rates, although, truth be told, there is certainly no shortage of reasons for the financial system to behave in a strange and unprecedented manner. To put this into context, it is worth remembering that when an economy – as is currently the case with the US economy – achieves figures close to full employment and inflation close to the coveted 2%, its yield curve steepens. This is a logical consequence of the improving economic outlook, as in a scenario where a wealth of good business opportunities begins to emerge, it is normal for investors to demand higher returns in exchange for tying up their money in the long term, and lower returns on short-term maturities. The graphical result is a steeper slope in that currency’s yield curve, as has been seen countless times throughout history. (more…)
Bill Gross, former star manager of PIMCO and now of JANUS, is the voice of experience in the debt markets. It is true that his published views have not always been right, but perhaps his unpublished reflections have been mostly right. In fact, for us, Gross has been a great communicator of self-interested views. That is to say that at any given moment it has suited him that the markets/investors/clients have reacted to his published opinions in a certain way. Let us not forget that Gross is a veteran and influential voice like few others. (more…)
The Pearl River Delta, also known by its acronym PRD, is a powerful economic zone in southern China. Its main cities are 11: nine of them belong to Guangdong province and account for 54% of its entire population (which is 106 million); and the other two cities are Macau and Hong Kong, which, although not technically part of the Mainland, are also the economic powerhouse of the PRD and provide the area with its specific political and administrative status. In total this zone accounts for no less than 26.2% of China's exports, 9.1% of GDP and «only» 4.2% of the population.
This area is approximately 40,000 km2 in size, about the size of Switzerland, but with a population of about 60 million, the size of the whole of the United Kingdom. The area will soon become a fully-fledged urban mega-metropolitan area, with economic growth exceeding 8% per year in cities such as Guangzhou and Shenzhen. A true economic hub for China, whose planned market economy clearly goes far beyond the Yangtze River Delta hub (Shanghai) or the Tianjin area hub (Beijing). (more…)
We’d like to recommend something for you to read at the weekend. It’s the article linked at the bottom of this post, written by Danielle DiMartino Booth, an economic analyst specialising in central banks. A decade ago, Danielle Booth successfully predicted the catastrophe caused by the property bubble and the abuse of mortgage lending by US banks. Let us remember that the so-called «subprime crisis» was the phenomenon that triggered the collapse of the financial system, which today remains afloat only thanks to (or because of) the life support provided by central banks, at the expense of the growth and wealth of future generations.
Before you dismiss this analyst as an alarmist who is blowing things out of proportion, we’d like to remind you that Danielle was the right-hand woman to the former President of the Dallas Fed Richard Fisher during his 10-year term. Fisher (and his right-hand woman, Danielle) clashed with Bernanke when he began the mass creation of money and debt. And in 2013, Fisher and Booth also strongly disagreed with the launch of the third round of quantitative easing, considering it to be «one step too far».
If you’d like to explore Danielle’s analysis in a bit more depth, you can also read what ZeroHedge had to say about her last year: «Another Fed Insider Quits, Tells the Truth«. For our part, we would simply like to reiterate the warnings we have been making since 2013 in articles such as «The Age of Central Banks«.
We know that some of you think our articles are generally too pessimistic. But perhaps, after reading Danielle’s piece, you’ll find ours are even a bit «happy-go-lucky» 😉 In any case, we wish you a happy weekend and hope this slap in the face of raw realism entitled «Central Banks and the rise of extremism» doesn’t spoil it for you:
«Central Banks and the Rise of Extremism.»
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Torres Sarrià, Carrer de Can Ràbia, 3-5, 4ª Planta BCN 08017
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