Archive for September, 2016

400 Annus Domini – Rome is swamped by hordes migrant and the empire falls.

2016 Annus Domini – Europe is swamped by migrants and ????

Between AD 376-476 circa 2 to 5 millions immigrants came to the Roman Empire (and mainly with the consensus of Rome) circa 5% of the estimated population. It was not an even invasion. It started with the Goth in 376 (0.25% of the population)

In Europe 3 million immigrant recently arrived (0.6% of the population) and circa 6.6% of the European population is actually non European (but data does not distinguish say US citizen from Egypt.

In ancient time most German were already “Romanized” so the there were not big cultural differences (there were with other groups like the Goths).

Climate changes and economic reason were the biggest reasons for the migrations – apart a few from Syria…most of the current wave of European migration is motivated by economics.

The Germans were quite well integrated with the Roman Empire and became the most reliable font of soldiers (not in Europe, but the US Army has already 1/6th of Mexican descent).

The immigrants were generally not hostile…they just wanted to “join the party”. There were proxy wars, ambushes from Germanic tribes a bit like Iraq/Syria), but generally when Rome decided to go “all in” the enemies disappeared…like now with the US Army.

Immigrants were prone to crime – but only when crime became organised in large bands that knew how the Roman fought they started to have serious victories against the Romans. And still the victories came mostly when various Roman would – be emperors where fighting each other.

And that is where Immigration and Europe disintegration (like Brexit) present some scary similarities.  There is no fighting – but where the politicians should pull together to find a solution they just focus on their own turf without addressing the big picture.

Unfortunately in democracy there is no solution to this problem = specially with the low level of politicians. Europe expanded too fast and with too little integration to answer such a challenge. It would be better to have 2 or 3 European zones that are more similar and could work together…well again the Roman Empire did split. Just too late to make a difference. Will it happen again with a North Europe democracy.

The signs are there and smart politicians are not. I would love to be more optimistic


Stock Market: an eerie calm

Posted: September 8, 2016 in Uncategorized

The calmness of these markets is really worrying…nothing happens.

When the volatility is so mute, usually the aftermath is quite violent.

If SP loses its 200 MDA we could see a really fast move to 2,100 at least.

It is quite scary indeed

It is one year that Merkel’s Germany has her “open door” immigration policy and this weekend there has been the first regional election in Northern Germany.

A few qualifications: Northen Germany has always been the most right wing part of Germany. It is one of the poorest states in Germany (Germany is a federal republic), but also had one of the lowest intake of immigrants (circa 2% of the total). But also the home State for Merkel.

Apart the broad media attention, Germany, due to its wealth and efficiency, had quite a few successes in dealing with immigrants – after the initial shock and awe.

Most of immigrants have been successfully housed and a great part of them behave quite good (even thou, statistically, on a million people there are quite a few bad apples in any case).

What Germany did not do very well (and nobody could) is integration. Even hiring 12,000 teachers for integration course has been not enough and very few of the under skilled migrants found employment – even the one that wanted. Plus there is a majority of people that for religious motives will not work or integrate.

So practically Germany is the place with the potential for the best solution.

And the election (still polling)

Merkel’s CDU lost badly coming 3rd at 19.8%. Alternative for Germany (right wing, anti immigration_ came second at 21.4% and first came in the Centre Left Party SPD (but lost 5% since previous election).

So, notwithstanding the not so bad outcome, people are voting right as they are scared.

Is it the masses always wrong and this is the rise of the populism? This is how the media spins it.

Maybe it is. But there is also an alternative view

“We will colonize you with your democratic laws.” — Yusuf al-Qaradawi, Egyptian Islamic cleric and chairman of the International Union of Muslim Scholars. This is an extremist preacher refused entry VISA from both the UK and France – so not representative of the masses – but exactly what the masses are scared of and not completely a  fantasy.


Friday’s US Labour Report

Posted: September 2, 2016 in Uncategorized

Tomorrow’s report probably will define the expectation of a September interest rate hike.Currently at 25%.

The expectations are 183k.Statistically it has tendency to disappoint.

The ISM report (manufacturing) came in negative today, but tomorrow report is all-important 

The reporting season has passed and it has been quite good superficially. The big difference from August 2015 is that the miners did the heavy lifting, while financial and rest was a big laggard.

The mid cap usually was the exception with some good results.

The big issue for the future is that most of the companies were focused on capital management, cost cutting and increased dividend payout (“search for yield”) which is now (on average!) 80%.

This paints an overall bleak picture for the future as really few companies are investing for growth. It shows that in the future the share selection will be more important than ever.

Also the commodities surge that helped the miners is also starting to end – the US  dollar strenght and the recent hard run will see to that (Citi new iron ore forecast is USD38/40.

The oil run is also over – most of the demand was due to a strategic reserve replenishment by China. No one knows if it is ended, but it looks close to finish.

So – no escape for this market? Not at all – opportunity abounds…not in plain sight – the strategy of Big Bankers, Big Miners and the Big Retailers (or plain ETF) has ended.