Crisis - Cluster Family Office

How does the machinery of the economy work? Video by Ray Dalio

Here’s the 30-minute video by global macro management guru Ray Dalio (Bridgewater) has been created to explain, in a very clear and educational way, not only the economic dynamics that have led us to the current situation, but, more importantly, the roadmap for emerging from the great recession through a “graceful deleveraging”.

The video is in English (I haven’t managed to find it in Spanish or with subtitles yet) and is accompanied by some very pleasant and illustrative animations. Furthermore, its unhurried pace makes it easy to understand all the concepts explained in it. It is probably a suitable response or a different take on the famous video “Money as Debt“, which went viral a while ago. Hope you enjoy it: (more…)

First Cyprus, now Poland, tomorrow…

I get the feeling that, despite having has been published at various media, has gone largely unnoticed by investors in general. But last week, it was quietly announced that no less than half of all Poles’ private pension schemes were to be confiscated. That’s right: a lifetime’s savings, set aside to provide for their needs in old age, have been halved overnight. (more…)

Italy’s risk premium is already higher than Spain’s…

Attention, attention! It is hereby proclaimed from the rooftops that the Spanish risk premium has already performed slightly better than Italy’s. The Government and its political allies can now add this figure to their «long» list of green shoots, which our economy seems to be enjoying of late. This will undoubtedly be the more or less caricatured narrative we’ll be hearing over the next few days. But do we really have grounds to be pleased with the economic figures? Here are a couple of examples – or rather, a couple of harsh realities. Take a look at this simple table from JPMorgan: (more…)

The dangers of doping and withdrawal

Over the last five years, central banks seemed set to rack up one victory after another in the Tour de France, thanks to their penchant for «doping’ – in the form of creating electronic money out of thin air. But the announcement by the US Federal Reserve of its mere intention to start turning off the tap in the coming quarters seems to have opened Pandora’s box. The effects of this announcement have gone beyond a simple correction in the price of US Treasuries, and fears are also spreading to other central banks such as the Bank of England (‘MPC members were concerned by the «surprising» rise in UK government bond yields that followed Bernanke’s remarks«) or the European (“There is a strong correlation between the 10-year US Treasury yield and European government bond yields with the same maturity.”). (more…)

Recovery and stability are here... eppur si muove!

It appears that August 2013 is marking the start of the Eurozone’s economic recovery. Peripheral risk premiums are shrinking like raisins, whilst the price of German government bonds is falling (yields rising), mirroring US Treasury bonds. The political class and the establishment The Western media are hailing it as such, whilst keeping their fingers crossed that the prophecy will become a self-fulfilling one.

However, mathematics is stubborn. And so is economics. Despite the faith and the malicious or ignorant opinions of politicians and analysts, as Galileo said: e pur si muove. In other words, Spain’s deficit, its economic recession and its unpayable debt reveal the harsh reality: we are far, very far from achieving growth and regaining solvency. That is why reductions in the risk premium are nothing more than mirages in a desert of recession and deleveraging that we have barely begun to navigate. A temporary and unjustified improvement that is the result of political propaganda and the well-known inefficiency of the markets. (more…)

A question of priorities

We are now in a phase of accommodation to chaos. The world turned upside down that summer of 2007 (I would even say that it began to do so after the 9/11 attacks on the WTC in 2001), and we have gone through a convulsive five years like few others, like very few others. And now it seems that we have become accustomed to the nonsense: to see the markets rise when the US unemployment figures worsen, because they are confident that this will mean the continuation of the infinite printing of money. Or to see bond yields fall when the FED insinuates that things are getting better and it will soon be able to take off the life support (QE) to the economy. Not to mention countless other absurd and unheard-of reactions and correlations. (more…)

The Cyprus Experiment: The euro is quietly falling apart.

The dreaded abolition is here de facto the free movement of money between Eurozone countries. And it has happened as always, quietly, behind closed doors, and in the country of Mediterranean soda experiments: Cyprus. The first case to come to the New York Times forum It was Marios Loucaides, a Cypriot businessman who had the audacity to try to buy a flat in neighbouring Athens a few weeks ago.

Don’t think this was some massive purchase or a deal worth millions of euros – no. It was simply a matter of buying a modest flat for €170,000. Mr Loucaides agreed with the Athenian owner that he would transfer the amount upon his return to Cyprus, something that should be perfectly normal and routine between EU countries sharing a currency in the much-vaunted Eurozone. But no. The money could not leave the country after endless obstacles, and the sale fell through. The Athenian owner will have to find a buyer with real money – that is, euros, not Cypriot currency.

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Are we coming to our senses?

Tim Haywood is the chief investment officer and head of the fixed-income division at the asset management firm GAM. And a few days ago he published some views that strike us as among the most reasonable to be found these days, when Bernanke has (further) thrown the financial world into turmoil. Tim essentially said the following: Bernanke has put the market under more strain than might have been expected. And this means that future communications from the Fed will become more delicate, more complicated to articulate and manage. Yet Bernanke’s statements were measured, logical and consistent. By contrast, the reactions of global markets were extreme and largely unfounded. (more…)

This Friday, Ecofin is discussing the directive designed to steal your money from the bank.

Believe it or not, it’s true. This Friday, 21 June 2013 Ecofin will discuss the order in which the forthcoming bank seizure (there are no plans as yet to reveal the date on which the ‘corralito’ will take effect, but at least that’s something…) will affect the banks’ loyal customers. On the one hand, there is the Spanish position, which has, unsurprisingly, written its letter to the Three Kings and is trying in vain to persuade the Netherlands and Germany to guarantee all deposits exceeding €100,000. But the stance of those in charge in Europe is to treat depositors (or subscribers to any financial product that places their money on the banks’ balance sheets) on a par with senior debt bondholders. (more…)

What is happening to the gold and silver market?

As we mentioned in our previous article, «The Beast is awakening…«, let’s try to shed some light on the surprising behaviour of the precious metals market. Physical demand for gold and, above all, silver coins and bullion is skyrocketing week by week. And it is highly significant that, for the first time in history, the prices of futures, ETFs and other investment instruments not directly linked to the physical possession of gold and silver, It is currently being sold at a discount regarding actual bullion and coins. If that isn’t mistrust of the metals markets and the policies of printing fiat money, then God help us. And what’s worse, it’s almost impossible to reverse the doping of the quantitative easing provided by the Fed and the ECB, without derailing the fledgling US recovery and/or tearing the Eurozone apart into at least two pieces. (more…)

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Category: Crisis

How does the machinery of the economy work? Video by Ray Dalio

First Cyprus, now Poland, tomorrow…

Italy’s risk premium is already higher than Spain’s…

The dangers of doping and withdrawal

Recovery and stability are here... eppur si muove!

A question of priorities

The Cyprus Experiment: The euro is quietly falling apart.

Are we coming to our senses?

This Friday, Ecofin is discussing the directive designed to steal your money from the bank.

What is happening to the gold and silver market?

Shall we help you search?

Cluster Family Office

Do you need help in capital and wealth management?

How can I avoid the negative effects that my fortune may have on my children?

How and when should I talk to my children about family wealth, and what relationship should they have with money throughout their adolescence?

How can I measure the real risks of my investments and protect my assets adequately?

Do I have sufficient liquidity and stable income to cover my needs on a permanent basis?

(+34) 93 626 47 75

(+34) 91 794 19 82

Category: Crisis

How does the machinery of the economy work? Video by Ray Dalio

First Cyprus, now Poland, tomorrow…

Italy’s risk premium is already higher than Spain’s…

The dangers of doping and withdrawal

Recovery and stability are here... eppur si muove!

A question of priorities

The Cyprus Experiment: The euro is quietly falling apart.

Are we coming to our senses?

This Friday, Ecofin is discussing the directive designed to steal your money from the bank.

What is happening to the gold and silver market?

Shall we help you search?

Cluster Family Office

Do you need help in capital and wealth management?

How can I avoid the negative effects that my fortune may have on my children?

How and when should I talk to my children about family wealth, and what relationship should they have with money throughout their adolescence?

How can I measure the real risks of my investments and protect my assets adequately?

Do I have sufficient liquidity and stable income to cover my needs on a permanent basis?

(+34) 93 626 47 75

(+34) 91 794 19 82

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