Conversations from a “private” mini Davos

Posted: August 17, 2016 in Uncategorized

Each year, at the end of August, there is a private weekend meeting of 50 US economists and money manager, invited by the head of Cumberland Advisors.

I had a glimpse from my sources…here the main takeouts.

  • US Politics

Nobody seems to like neither Trump not, surprisingly Clinton. Everybody is worried that neither candidate is addressing the Budget deficit with any seriousness. No one is happy about the elections….and it means volatility

  •  China

Everybody seems to agree that the data out of China are garbage and the credit issue is much bigger. The GDP consensus is about 3-4%pa (half the official data and pretty much what other sources confirm).

There has been a wide consensus that MSCI did a good thing about not including the Chinese A shares in the MSCI, but they think that MSCI will soon bow to political pressure and include it.

  • Brexit

They agree that Brexit impact on US is minimal. The big worry is the potential of contagion (Quititaly, Frexit), They are also worried around next year elections (Germany, France) and the rise of right wing (Austria,, Finland, Hungary, Latvia) and left wing (Spain, Greece, Portugal)

  • Fixed Income

They are worry that specially the high yield bond ETFs they are practically becoming practically dealers providing and absorbing liquidity. This is a structural change that has yet to be really understood.

  • Bitcoin and Blockchain

Even if in the financial media is not covered too much – it was a quite debated topic with different positions. Even if nobody saw it as the new currency. Interesting the comparison was more Bitcoin like Gold than Bitcoin like other currency. a space to observe.

The big conclusion is that the current status is unlike any time in the past, so there are no real reference points. Pay attention.



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