My previous posts regarding a pullback in March obviously did not factor in Nuclear fallout risk. I so admire the markets for this central fact: It never ceases to show you how much you don't know...even if you are right.
You can be "right", but never truly "correct" it seems.
March 15 (Bloomberg) -- Japanese stocks dropped, with the Topix index suffering its worst two-day slump since the 1987 stock market crash, and default risk jumped on concern the nation’s economy will be crippled after its biggest earthquake and a nuclear accident. U.S. index futures, rubber and oil fell.
The MSCI Asia Pacific Index sank 4.3 percent to 125.93 as of 11:50 a.m. in Tokyo. The Topix tumbled 7 percent, Japan’s government bonds rose for a third day and the cost of protecting the nation’s corporate bonds from non-payment surged the most in more than two years. The Australian dollar weakened 1.1 percent. Rubber declined 7.3 percent and oil slid 1.9 percent in New York. Standard & Poor’s 500 Index futures lost 1.4 percent.
Monday, March 14, 2011
Even with...
...180 Billion yen in liquidity injection from the BOJ, and even with Moody's downgrades and associated dire warnings, Japanes Bonds are up. How is this possible given their fiscal situation and the projected increase in governmental spending given this natrual disaster?
Chained to a sinking boat...
Which one realizes they all have keys?
The BIS, the central bank of central banks, said in its quarterly report that Germany had $569bn of exposure to the quartet, France $380bn, and the UK $431bn.
A chunk of British exposure is on behalf of Mid-East and Asian clients banking through London. Italy has just $81bn at risk and seems uniquely insulated from the crisis all around it.
The geography of risk varies greatly. British-based banks and subsidiaries have $225bn at stake in Ireland, and $152bn in Spain, but little in Portugal or Greece. France is up to its neck in Greece with $92bn; a Benelux-led group has $180bn in Spain, and Spain itself has exposure of $109bn to Portugal.
The BIS, the central bank of central banks, said in its quarterly report that Germany had $569bn of exposure to the quartet, France $380bn, and the UK $431bn.
A chunk of British exposure is on behalf of Mid-East and Asian clients banking through London. Italy has just $81bn at risk and seems uniquely insulated from the crisis all around it.
The geography of risk varies greatly. British-based banks and subsidiaries have $225bn at stake in Ireland, and $152bn in Spain, but little in Portugal or Greece. France is up to its neck in Greece with $92bn; a Benelux-led group has $180bn in Spain, and Spain itself has exposure of $109bn to Portugal.
Sunday, March 13, 2011
The Quake...
...the real issue is the importance of Nippon as nexus for various "just in time" global logistic systems.
If power is lacking, the resultant effects are obvious.
If power is lacking, the resultant effects are obvious.
Another classic of its kind...
...and worthy of another "in retrospect" moment for the historians of the future, who will count the current bubble in gold (and indeed in most commodities) as a misplaced faith in their ability to substitute as "money".
This snippet from yet another gold ETF prospectus. Again, the claims on physical gold (which open up additional risk as multiple collateral claims may be had for the same cache of gold, especially given current prices) will be far more than the actual gold available.
"The trustee may suspend the delivery or registration of transfers of Shares, or may refuse a particular deposit or transfer at any time, if the trustee or the sponsor think it advisable or any reason....or...during an emergency as result of which delivery, disposal or evaluation of gold is not reasonably practicable"
So, once again, we are compelled to inquire as to what is reasonable. And even more interesting from a risk point of view, the PERSPECTIVE of whom decides what is reasonable falls on trustee OR the sponsor. This is all in light of Net Asset Values being slightly LOWER than a comparable investment in physical gold - despite the risk (but offset of course by storage costs and other risks associated with holding physical gold).
The point being here, is that there is no shortage of investment options to "take advantage" of this latest gold rush, and that in it of itself should make would be gold bugs wary.
This snippet from yet another gold ETF prospectus. Again, the claims on physical gold (which open up additional risk as multiple collateral claims may be had for the same cache of gold, especially given current prices) will be far more than the actual gold available.
"The trustee may suspend the delivery or registration of transfers of Shares, or may refuse a particular deposit or transfer at any time, if the trustee or the sponsor think it advisable or any reason....or...during an emergency as result of which delivery, disposal or evaluation of gold is not reasonably practicable"
So, once again, we are compelled to inquire as to what is reasonable. And even more interesting from a risk point of view, the PERSPECTIVE of whom decides what is reasonable falls on trustee OR the sponsor. This is all in light of Net Asset Values being slightly LOWER than a comparable investment in physical gold - despite the risk (but offset of course by storage costs and other risks associated with holding physical gold).
The point being here, is that there is no shortage of investment options to "take advantage" of this latest gold rush, and that in it of itself should make would be gold bugs wary.
Thursday, March 10, 2011
In retrospect...
...The European experiment will be taught as a quaint attempt by historical enemies to compete economically with the prevailing hyperpowers of the day.
More downgrades, which actually have bite to them as individual nations in the Euro area are not sovereign currency issuers.
My main thesis (the the Unites States is in a unique position to benefit from global disorder) remains intact, albeit with the aforesaid short-term market volatility.
More downgrades, which actually have bite to them as individual nations in the Euro area are not sovereign currency issuers.
My main thesis (the the Unites States is in a unique position to benefit from global disorder) remains intact, albeit with the aforesaid short-term market volatility.
Wednesday, March 09, 2011
Deft
This will be sure to infuriate her interlocutors...playing the current hand for all its worth. Realpolitik is alive and thriving. Of course, the Chinese could direct the exact same comment to the United States, but once again, the difference between systems of order (and the strong position the U.S. holds relative to the rest of the world) is demonstrated.
*CLINTON WARNS THAT CHINA FACES YOUTH UNDER-EMPLOYMENT ISSUES
*CLINTON WARNS THAT CHINA FACES YOUTH UNDER-EMPLOYMENT ISSUES
Subscribe to:
Posts (Atom)