Arminius

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So far Arminius has created 41 blog entries.

Geldzug: RECESSION O’CLOCK, AUSTRALIA?

4th October 2019 The biggest drivers of GDP growth in Australia are “houses and holes”, i.e. residential construction and resource exports. Residential construction is driven by factors internal to the Australian economy, whereas resource exports depend on the growth of the major global economies, particularly China. House prices and housing starts have been falling since early 2018, but there are recent signs that they are bottoming out. Optimists believe that the Reserve Bank’s two interest rate cuts plus changes in the banks’ prudential requirements will stimulate demand, prompting a recovery in 2020. We are more pessimistic: although house prices are [...]

2019-10-10T12:20:38+00:00October 10th, 2019|

Geldzug: THREE SEISMIC TREMORS IN SEPTEMBER

1 October 2019 The financial world was shaken by three seismic tremors during September 2019, but most people only noticed one of them. The First Seismic Tremor The one that everyone noticed was the drone attack on Saudi Arabia’s oil processing plant at Abqaiq on 14 September. The Yemen-based rebels who claimed responsibility have launched more than one hundred drone attacks in the last two years, on Saudi oil facilities such as oilfields, pipelines, and pumping stations, as well as military bases, airports, and other infrastructure... [read more]

2019-10-03T23:02:33+00:00October 3rd, 2019|

Geldzug: COMMONWEALTH BANK’S FY19 RESULT: TRENCH WARFARE AHEAD

12 August 2019 The Commonwealth Bank of Australia (“CBA”) is Australia’s largest bank at $140.6 billion, and the most expensive of the Big Four, in terms of P/E, dividend yield, and price to book ratio. As such, its disappointing result for the year ended 30 June 2019 does not augur well for the other three big banks (who all have September year ends)... [read more]

2019-08-19T23:51:03+00:00August 19th, 2019|

Geldzug: ANOTHER TRADE WAR – THIS TIME WITHOUT THE US

6 August 2019 With all the news about the Trump Administration’s trade disputes with China, Japan, Canada, Mexico, and the EU, the ordinary investor probably hasn’t noticed one trade war which doesn’t involve the US but could have serious consequences in East Asia. On 2 August 2019 the Japanese government removed South Korea from a “whitelist” of 27 countries which have blanket approval to buy certain sensitive Japanese exports. The whitelist exempts the specified countries from having to get individual approvals for the purchase of hundreds of commercially sensitive materials – for example, materials which have military as well as [...]

2019-08-05T20:32:04+00:00August 5th, 2019|

Geldzug: BANK TO THE FUTURE II

24 July 2019 Countless tech visionaries have talked about the potential for “disrupting” the banking industry. Some have even started companies which competed with traditional banks. (Despite his words, Gates himself never did so.) To date, none of these companies has had much impact on the incumbent banks, who have done a far better job of disruption by shooting themselves in the foot. (Honourable mention to Deutsche Bank, which since the GFC has managed to lose over 95% of shareholder value.) This is not to say that banking is immune from tech-based challengers, just that – so far – none [...]

2019-07-24T03:31:14+00:00July 24th, 2019|

Geldzug: FACEBOOK FACEPLANT

22 July 2019 Last month, with a great fanfare and many pious platitudes, Facebook announced its proposed global cryptocurrency, Libra. We, along with many others, expressed doubt that Libra would meet the regulatory standards which are mandatory in developed countries, particularly the anti money laundering and “know your client” rules. (See http://arminiuscapital.com.au/geld-zug-commentaries/  28 June 2019)... [read more]

2019-07-19T22:08:44+00:00July 19th, 2019|

Geldzug: FACEBOOK’S LIBRA: STAR SIGN OR TAMPON?

28 June 2019 Libra is planned to be a global cryptocurrency suitable for international transfers. Its value will be stable because it is based on a Reserve of high quality assets. There are many unanswered questions about Libra’s regulatory status, particularly about its compliance with anti money laundering rules. It will not be accepted in developed countries until it satisfies each country’s regulator. Libra can productively target remittances, which are an important segment of the global money transfer market. Remittances from rich countries to middle income and poor countries totalled USD $529 billion in 2018. The impact on Western banks [...]

2019-07-01T23:44:11+00:00June 28th, 2019|

Geldzug: ECONOMIC GROWTH AND EQUITY MARKETS

19 June 2019 It is natural to assume that a country’s share market performance is driven by its economic performance, and therefore that a country with high GDP growth will generate high equity returns. Unfortunately, completely the opposite is true. For most countries over most periods, equity returns are negatively correlated with economic growth. How could this happen? We have known for four decades that share markets are much more volatile than they ought to be if their price movements were driven by changes in economic and business fundamentals alone. Robert Shiller pointed out in 1981 that, based on price [...]

2019-06-24T23:28:06+00:00June 19th, 2019|

Geldzug: BIPARTISANSHIP – AN ALBATROSS FOR CONGRESS

21 May 2019 As we watch the US and China heading enthusiastically into a full-scale trade war, it is worth taking a step back from President Trump’s daily squabbles via the Twittersphere with the rest of Planet Earth, and focusing on the policy areas where the Republicans and the Democrats do already agree. Infrastructure is one of the obvious areas. Both parties agree that the USA needs to spend more on maintaining its existing roads, bridges, canals, tunnels, pipelines, etc., as well as building new ones. The American Society of Civil Engineers produces a four-yearly report card on the nation’s [...]

2019-05-22T00:51:23+00:00May 22nd, 2019|

Geldzug: WARNING SIGNS IN THE US – GELD ZUG

12 May 2019 Since the GFC, the world’s central banks have got into the habit of publishing regular Financial Stability Reports (FSR). These documents are intended to function as an early warning system, by monitoring financial markets in order to identify risks as they appear and grow, so that the regulators can take action before the crisis actually occurs – unlike in the GFC. The US Federal Reserve publishes its FSR twice a year, and many investors read each FSR not only to assess the current risk level but also get see what the Fed might do next. The May [...]

2019-05-10T02:19:38+00:00May 10th, 2019|
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