Geld Zug

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: 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|

Geldzug: PREPARING FOR THE CHINA CRISIS

22 February 2019 After a decade of pointing out that China was not heading for a financial crisis, we have changed our minds. Recent trends suggest that problems are building in China’s corporate bonds, small banks, and consumer loans. We think that a crisis is likely in the next two years... [read more]

2019-03-08T01:35:11+00:00February 28th, 2019|

Geldzug: YOU HAVE BEEN WARNED

21 November 2018 Here is a list of fund managers and financial regulators: Ray Dalio, founder of Bridgewater Associates, which manages USD$160 billion Paul Tudor Jones, successful hedge fund manager since 1980 The International Monetary Fund, which recently pointed out global debt has now reached 225% of GDP, beating the 2009 record of 213% Jean-Claude Trichet, head of the European Central Bank from 2003 to 2011 The Bank of International Settlements, which did warn the US Federal Reserve about the impending GFC Janet Yellen, former Chair of the US Federal Reserve. What do they have in common? All of them [...]

2018-11-21T11:25:32+00:00November 21st, 2018|

Geldzug: FROM WEAK OWNERS TO STRONG OWNERS – ASSETS IN A BEAR MARKET

31 October 2018 Through 2018, many of our investors may well have become bored listening to our endless repetitions of the warning that a market correction was “just around the corner”. In October, the correction arrived in all major markets: the US S&P500 price index has fallen by -8.8% so far this month, the Australian S&P/ASX200 by -8.7%, the Japanese Nikkei 225 by -11.3%, and the European Stoxx 600 by -8.2%. (The Chinese Shenzhen A dropped -10.3%, but it has been falling all year and is now down by -31.9% since January.) By the third week in October, all major [...]

2018-10-29T23:00:49+00:00October 29th, 2018|
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