Archive for August, 2016

Apple and Europe

Posted: August 30, 2016 in Uncategorized

It is a bit early to understand the consequences, but the issue that Apple has been asked to pay back Euro 13 billion in unpaid tax (not a penalty..just what owed) as a political motivation.

Brexit, Trump, Le Pens have scared to death the establishment. And the establishment is doing something to placate the population, which is rising against the mega corporation that dominate the market without paying tax in any significant way (not just Apple and Europe, IKEA paid the first small profit in Australia in 2013 since started operations in the mid 80s).

Also to counter the Brexit effect, Europe only chance is to finally to start a fiscal integration, not just monetary.

Lastly it is a rise in protectionism (similar cases are against Google, Samsung and other).

This is just another phase of the multi faceted battle for Europe survival…or death.

Peer to Peer economy 

Posted: August 30, 2016 in Uncategorized

Peer to peer economy is actually a revolution that is happening in front of your eyes.

Examples are Uber or Airbnb, but they are popping up in every space. Car shares, lending  (also in real estate and specially in closed communities like the Chinese one).

But also food preparation , driver services, bycicle,  boat and caravan sharing…you think about the possibilities are almost infinite.

This is bringing also a lot of headaches to the authorities as it is difficult to regulate and often supra national.

Also for the investor presents dangers and opportunities.  As in my blog in 2013 between 2015 and 2025 we will live a techno/socio/economical revolution and it is important not to be left behind.

Finally we have the Federal Reserve speech that kept the market on suspense (or sleep) for the previous take.

No major news…but still a few interesting takes.

Chairman Yellen said that the economy is improving and now, still data dependent, there is scope for another rate increase.

So we could have a rate increase in September, but I am a bit skeptic about it as it is very close to the Presidential election.

There is quite a strict correlation between stock market behaviour in the quarter before the election and the outcome (Good Market favourable to Clinton/Obama) – so she could want to avoid being seen as partisan.

One of the important take outs instead her call for fiscal policy to do more.

What is fiscal policy? It is Government – so is she asking the Government to intervene as the Fed is reaching the limits of what it can do for the economy?

I personally think so and she is calling for help from the politicians. And i think she will get it next year.

Not because the politicians are listening to her – but because Brexit, Trump, Le Pens (the rise of populism as the media call it – or just democracy as it should be) are scaring to death the establishment.

Directly from the CIA.If you ever doubted the conspiracy theories around the creation of ISIS by the Bush Administration (maybe not really willing but at least culpable).

Incredible that Bush, Colin Powell etc have not gone to jail.

Western democracy? 

Now you know what was all the fuss about rounds of meetings with Russia and Iran.

Turkey was seeking the agreement (or better said non-intervention) of Iran and Russia (and so the Syrian elected Government) to partially invade Syria to get rid of Islamic State by its border (actually in reality the Islamic State was going to be overtaken by the Kurd – and Syria wanted to prevent it).

As everybody agrees there is not too much to worry (aside the fact that accident can happen). Also, after the after-coup Turkish purges, the Turkish military is severely weakened s command structure.

This intervention also explains why last week for the first time since 2013 the Syrian Government Army attacked the Kurds.

And also it sheds light on why the Iranians are so aggressive against the US ships in the Gulf – as Iranian sides with the Syrian Government and the US with the Kurds – it is showing that Iranians are not quite happy of this US involvement (as the Turks and Russian).

A game of chess, Middle East style

There is an imporant meeting in Italy at the moment. Italian PM Renzi will be begging Merkel for leniance and tax breaks as the Italian Referendum is looming.

The Italian Constitutional referendum (to transform the Italian system in a more similar to France election system) is backfiring.

It was called when PM Renzi was at the top and the opposition was in tatters.

Now the anti Euro party has the same support of the one of PM Renzi. Already Renzi is backtracking saying he will not resign (probably he will have to resign if the referendum fails…but the old powers will try to get a technical government to avoid elections till 2018).

The Referendum could be held anytime after 2 October,  but Renzi will try to buy time…so probably it will be on early December.   

The other funny fact is that Renzi went to the French system as Front Nationale can be defeated in a second round as the anti right wing citizens will vote for anyone else than Front Nationale. In Italy M5star as no such leaning…so it could backfire as everyone undecided could vote against the status quo of the Government.

In a sense PM Renzi tried to get more stability…and got more instability.

What is sure that Italy, since the Euro, is one of the few European country is zero growth.

Clinton vs Trump polls

Posted: August 22, 2016 in Uncategorized

There is a clear push by media to push the Clinton agenda.

I alreaady reported quite a few week ago that the polls answers got modified to make error in answers go to Clinton.

Also poll reporting for Trump (like the recent Los Angeles Times Trump 47 vs Clinton 45) are under reported

It does not mean that Trump will win, but do not trust the polls. Like Brexit this elections will be very close and will be won or lost in October 

More bad problems for the Pro Euro

The first data post Brexit show a great just of retail. UK sales +1.2% (expectations +0.2%)….but what is more important that is all store types signaled an uptrend.

The UK Pound is sharply up.

It is early to say…but this is shaping up badly for the German European Union.

With Brexit, All the scaremongering can be proved wrong…and more people will want to abandon Europe.

As the Battle for Britain (1940) in the Second War World, Brexit is a pivotal moment.

By 2020 the Fourth Reich (European Union) will be history.As the the Third Reich.

As the Third, it will go down in history as a period of poverty and economic collapse….and hopefully we go back to the”1950-1960″ recovery which were the best times ever. Well, we are getting even  the 1950s Cold War…which again is perking up…then they say history does not repeat!

Only last week I put a post that you need to stay clear of the top 20 as the banks and Tesltra have finished their rise…and today Moody’s (one of the main research house) downgraded the outlook for Australian banks from stable to negative, citing diminished profitability and increased sensitivity to shock.

Still the capital structure is improved, but the easy money (also for investors is finished).

So again….stay away from the index. There are still great opportunities…but much harder to find

 

Markets in holiday mode

Posted: August 18, 2016 in Uncategorized

As the Northern hemisphere is on holiday, the market is on holiday too and it will continue probably until early September.

SP 500 and ASX200 are kind relaxing on a tight range …SP500 could move between 2,2120/2,200 and SP200 between 5,350/5,600

Gold similar pattern…could go down to $1,300…but the pressure is building to go fast in any of the two days. A break of $1,300 or 1,400 will be the catalyst.

Oil, it it stays over $46, in September we could see the  60s (which would be the top for a while).

AUD/USD has an important resistance at 78 cents…after a short retracement we can see a real attack…which will see the real test.

September, as a calendar base month, usually is positive…but that is not a forecast…just a stat.