29 декабря 2017, 06:08

Как изменится FOMC в 2018 году?

Можно воспользоваться спокойными торгами и поговорить о составе Комитета по открытым рынкам Федерального резервного банка США в 2018 году. Помимо ухода Джанет Йеллен, будет внесен ряд дополнительных изменений, которые могут оказать значительное влияние на желание ужесточения политики в следующем году. Традиционно FOMC состоит из 12 членов - 7 членов Совета управляющих, главы центробанка и 4-х президентов Резервного банка, которые работают на 1-летней основе. Когда нынешний глава ФРС Джанет Йеллен уйдет в отставку в феврале, FOMC будет состоять из следующих членов: Председатель ФРС - Джером Пауэлл Совет управляющих - Лайел Брейнар, Рэндал Куорлз ФРС Нью-Йорк - Уильям Дадли ФРС Кливленд - Лоретта Местер ФРС Сан-Франциско Джон Уильямс ФРС Атланта - Рафаэль Бостич ФРС Ричмонд ФРС - ??? Из него выходят Чарльз Эванс и Нил Кашкари, единственные 2 члена, которые проголосовали против повышения ставок в декабре, и в нем появляется Местер, который является ястребом и Уильямс и Бостик, которые являются центристами. Уильямс ранее предположил, что в следующем году ставки могут возрасти в 3 раза, тогда как Бостик менее привержен конкретному масштабу, заявив, что может быть 2,3 или 4 похода. На пост главы ФРС Ричмонда по-прежнему необходимо назначить замену Джеффри Лэкеру, который ушел в отставку в апреле, и на пост ФРС Нью-Йорка нужно будет найти замену Уильяму Дадли, который планирует выйти на пенсию в середине 2018 года. Помимо этих открытых мест в Совете осталось еще 4 вакансии губернаторов. В этом месяце Трамп назначил экономиста Марвина на одну из вакансий. Он широко уважаемый экономист и бывший политик в ФРС Ричмонда, который выступает за более строгий таргетинг на инфляцию и отрицательные процентные ставки по сравнению с количественным ослаблением. Несколько вице-директоров были приглашены на должность вице-председателя - ни один из которых не имеет прямого опыта в области денежно-кредитной политики. Говорят, что Белый дом рассматривает Ричарда Клариду (управляющего директора PIMCO NY), Лоуренса Линдсей (советника по экономическим вопросам у Буша) и Джона Тейлора (отмеченного экономиста) за эту должность. Это оставляет одно дополнительное место в Совете управляющих и заменяет президентов ФРС Нью-Йорка и Ричмонда. Лоуренс Линдсей и Джон Тейлор вероятные претенденты на эту должность. Из подтвержденных членов мы знаем, что взгляды Пауэлла и Дадли совпадают с взглядами Йеллен. Блейнард - голубь, Куарлз проголосовал с большинством на последней встрече, Местер, Уильямс и Бостик, которые немного более ястребины. Таким образом, если голубки не будут назначены на оставшиеся должности, в 2018 году у центрального банка будет более яростный наклон. Информационно-аналитический отдел TeleTrade Источник: FxTeam

28 декабря 2017, 22:03

5 Best Bond ETFs of 2017

Inside some of the top-performing bond ETFs of 2017.

27 декабря 2017, 17:10

Pair Of Bush-Era Economists Emerge As Front-Runners For Fed Vice Chair Position

After selecting Fed governor Jerome Powell to replace Janet Yellen as Fed Chair when her term expires in February, the Trump White House has now moved on to interviewing a series of candidates for the Vice Chair position.  As the Wall Street Journal notes this morning, two of the more likely candidates for that role are a pair of economists who served in senior positions in the George W. Bush administration. The pair being considered by Trump consists of Richard Clarida, a managing director at money manager Pimco and a professor of economics and international affairs at Columbia University, and Lawrence Lindsey, who runs an economic-advisory firm in Washington.  In addition to his current roles, Clarida served as assistant secretary for economic policy at the Bush Treasury Department from 2002 to 2003. Lindsey was a top economic adviser to the Bush White House from 2001 to 2002 and served as a governor on the Fed’s board from 1991 to 1997. As further background, here is Clarida's bio from PIMCO: Dr. Clarida is a managing director in the New York office and PIMCO's global strategic advisor. In this capacity he leads PIMCO's annual Secular Forum process and works closely with the Investment Committee to assess and analyze global monetary and fiscal policy trends. Since joining the firm in 2006, he has worked extensively with and served as a trusted adviser to the firm's many central bank and sovereign wealth fund clients. Prior to joining PIMCO, he gained extensive experience in Washington as assistant Treasury secretary, in academia as chairman of the economics department at Columbia University, and in the financial markets at Credit Suisse and Grossman Asset Management. He has 19 years of investment experience and holds a Ph.D. in economics from Harvard University. He received his undergraduate degree with Bronze Tablet Honors from the University of Illinois. And Lindsey's bio from The Lindsey Group: Larry Lindsey is President and Chief Executive Officer of The Lindsey Group. He has held leading positions in government, academia, and business. Prior to forming The Lindsey Group, he held the position of Assistant to the President and Director of the National Economic Council at the White House and was the chief economic adviser to candidate George W. Bush during the 2000 Presidential campaign.   Dr. Lindsey also served as a Governor of the Federal Reserve System from 1991 to 1997, as Special Assistant to the President for Domestic Economic Policy during the first Bush Administration, and as Senior Staff Economist for Tax Policy at the Council of Economic Advisers during President Reagan’s first term. Dr. Lindsey served five years on the Economics faculty of Harvard University and held the Arthur F. Burns Chair for Economic Research at the American Enterprise Institute. From 1997 until 2001 he was Managing Director of Economic Strategies, a global consulting firm.   Dr. Lindsey earned his A.B. Magna Cum Laude from Bowdoin College and his M.A. and Ph.D. from Harvard University. He was awarded the Outstanding Doctoral Dissertation Award by the National Tax Association and named the Citicorp Wriston Fellow for Economic Research at the Manhattan Institute. He is the author of numerous articles and three books: The Growth Experiment, Economic Puppet Masters and What a President Should Know…but Most Learn Too Late. In terms of policy preferences, Clarida has often spoken favorably in interviews about the accommodative monetary policies of Yellen. The Obama administration considered nominating Clarida to a vacant Fed seat in 2011, but he withdrew from consideration which ultimately resulted in Powell being chosen for the seat. Lindsey, on the other hand, was one of the few to warn of a stock-market bubble in 1996 and said the Fed had an obligation to prevent the bubble from growing out of control...advice that someone should have given Janet Yellen about a year ago. In terms of other candidates, the Trump administration is also considering Mohamed El-Erian, the former chief executive of Pimco and a former deputy director of the International Monetary Fund. El-Erian is also considered by many Fed watchers to be a potential candidate to lead the New York Fed, which will name a new president next year.

23 декабря 2017, 12:41

Ten Top Alt-Fin posts that marked 2017 - Peter Diekmeyer (22/12/2017)

Ten Top Alt-Fin posts that marked 2017 Written by Peter Diekmeyer, Sprott Money News   Increasing questions regarding the big financial institutions and mainstream media platforms that cover them (such as CNN, MSNBC and the New York Times) are highlighting the importance of looking elsewhere for investment ideas. To help, we propose a subjective list of ten top Alt-Fin posts during 2017. There is no guarantee that this collection of geniuses, eccentrics and quacks will be any more accurate than the big guys. But in a world in which governments measure progress in fiat dollars whose value changes daily, financial statistics must be regarded as little more than manipulated approximations. The best ideas are thus more likely to be found “out of the box” than in. We have deliberately chosen more video presentations than written articles, as many of the themes raised are strategic in nature and are best reflected upon away from work. So put on your hats. Because “we’re not in Kansas anymore.”   1. Grant Williams: A World of Pure Imagination Grant Williams, in A World of Pure Imagination, highlights the emergence of huge stock, bond and real estate bubbles sparked by world governments that have grown their spending, borrowing and money-printing at a faster pace than GDP for five decades. Williams, whose charm and humor belie the deadly seriousness of this cold insight, doesn’t use the words “Ponzi Scheme.” However, the implications of trends he identifies will affect all investment decisions during the coming years. If you watch one economic presentation this year, this should be it.   2. David Stockman: Free markets are dead Like most Alt-Media,Contra Cornerr author David Stockman is highly skeptical of current economic data, debt levels and bubble-like asset valuations. His unique contention, outlined in a presentation to the Mises Institute earlier this year, is that free markets no longer exist. According to Stockman, huge spending power in Washington (which he calls “the Imperial City”) and the Federal Reserve (the “monetary policy politburo”) are so distorting price discovery that valuations can’t be trusted. Stockman’s credentials are impeccable. His 1986 classic The Triumph of Politics, penned shortly after he first came to prominence during his stint as Reagan’s budget director, foreshadowed almost all current developments.   3. Spengler: Who is China having for lunch? The key global macro trend for gold investors to watch during the coming years will be China’s rise and the yuan’s growing share of the global reserve currency balances. It’s a zero-sum game: the faster those balances rise, the faster the US economy will implode. David Goldman’s extensive work in Hong Kong (where long-time Asia Times readers know him as “Spengler”), has provided him with unique insights into the Middle Kingdom, many of which he shared in a recent presentation to the Westminster Institute. Goldman, contrary to consensus, is bullish. He argues that Westerners seriously underestimate the importance of Chinese historical traditions, entrepreneurism, work ethics and the millions of Chinese STEM and music students.   4. Harry Dent: It’s the transmission mechanism, stupid Forecasting is a brutal world. No one has been more severely punished for being right than Harry Dent, whose deflationary collapse theory was first outlined in his 2011 work The Great Crash Ahead. Dent’s biggest readers appear to have been central bankers. Shortly after the book appeared, governments began printing unprecedented amounts of money, in part to boost stock prices. This has obliterated the timings of Dent’s initial stock crash thesis (which draws extensively on Robert Prechter’s 2002 work Conquer the Crash). Still, in an interview with Peak Prosperity, Dent said the strategy won’t work due to their reliance on large financial institutions to lend out and expand the money they print—a process hampered by worsening demographic trends. Many in the precious metals community doubt Dent’s thesis that a coming collapse in asset prices will affect gold. But everyone listens to him.   5. Jeff Berwick and Doug Casey: A Bitcoin of wisdom Renegade thinkers Jeff Berwick, publisher of the Dollar Vigilante newsletter, and Doug Casey, founder of Casey Research, made the year’s most spectacular investment call: buy Bitcoin. Berwick’s broad philosophy, which he outlined at the Texas Bitcoin Conference, is that Bitcoin—which is backed by an existing blockchain, database and user community—has many of the qualities of traditional currencies. Casey, an early crypto-currency sceptic, outlined his thinking about why he reversed course at the Nexus Embassy Conference in September. Note: the sheer success, timing and apparent brilliance of Berwick’s and Casey’s calls would normally have rated them much higher rankings. However, Bitcoin’s opacity, and the fact that neither expert has issued a full “sell” call, mean that this story is not yet over. We’ll be more than happy to update their rankings if they get out with their skins intact.   6. MK. Bhadrakumar: Is India a BRIC or a card? MK. Bhadrakumar, an India-based blogger and former diplomat, has been far ahead of the curve in analyzing the return of balance of power politics, in which weaker nations—such as Russia, China and Iran—are increasingly banding together to protect themselves from larger predatory powers. India, which will soon be the world’s most populous nation (and possibly one day its biggest economy), will be crucial in determining how the global chess match will unfold. Current thinking is that the US should play the “India card,” to form an alliance against China (similarly to the way that it played the “China card” against the Soviet Union during the Cold War). Others think that India will lean towards a BRICs alliance. Indian politics, which are currently dominated by the religious/conservative Modi regime, are incredibly complex, and Bhadrakumar is not a big YouTube guy, so it is hard to point to one particular presentation. But his blog is required reading.   7. Alasdair Macleod: America’s use of the dollar for financial war Macleod, a long-time favorite of hard money proponents, hit the nail on the head with his America’s Financial War Strategy blog earlier this year, which outlined the country’s use of the dollar as a weapon. In it, Macleod identifies a crucial presentation by Qiao Liang, a senior Chinese government official, which characterizes America’s abandonment of the gold standard in 1971 as the most important development of the century.   8. Bill Gross: Correlated asset classes magnify risks Gross, the former head of bond giant Pimco and a major player in the bond world, was promoted to Alt-Fin status in 2015 after he was ousted from the company he founded. In his last blog of 2017, Gross reminds us that with interest rates so low as we approach a recession, central banks won’t be able to protect investors as much during the next market crash. (During previous economic implosions, declines in stock prices were offset by rises in fixed income securities, as central banks responded to events by cutting interest rates).   9. Gordon T. Long: Will central banks nationalize the economy? Veteran investment analyst Gordon T. Long’s video posts and interviews (many of which are with fellow bloggers Charles Hugh Smith and Mish Shedlock) are among the Alt-Fin world’s most under-rated. Long’s modus operandi is to lay out current economic developments and macro-trends in a shy, matter of fact way, through charts and graphs, which leave little room for argument. One of Long’s more compelling recent theses is that the US Federal Reserve and the ECB could do as the Bank of Japan and Switzerland’s national bank are—by buying stocks and/or ETFs (directly or indirectly) to artificially keep prices up and thus mask the scale of economic decline.   10. Doug Noland: Is credit the new form of money? Doug Noland, author of the Credit Bubble Bulletin, whom we profiled last month, is a long-time favorite of precious metals investors. Money is notoriously hard to quantify, says Noland, and thus a better way to understand the amount of liquidity in the system is to track credit.   One of Noland’s unique contributions has been to highlight the crucial importance of the US Federal Reserve’s Z.1 Flow of Funds Report. Noland’s quarterly analyses of the Z.1 (which lists the progress of all of the debts in the economy—not just individual government, business and household portions, as do mainstream media) is required reading for serious precious metals investors.   Questions or comments about this article? Leave your thoughts HERE.   Ten Top Alt-Fin posts that marked 2017   Written by Peter Diekmeyer, Sprott Money News Check out these other articles by our contributors: The Dorothy Chronicles - Gary Christenson (21/12/2017) Prominent Names Within the Crypto Space Cash Out Their Positions - Nathan McDonald (21/12/2017) Kite in a Tree - Jeff Thomas (21/12/2017) Precious metals are up, cryptocurrencies are down. Why Eric Sprott thinks 2018 could be an interesting year (Weekly Wrap-Up, December 22, 2017)

18 декабря 2017, 16:36

3 Top-Ranked PIMCO Mutual Funds to Consider

Below we share with you three top-ranked PIMCO mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy)

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18 декабря 2017, 11:55

Pimco: недавние продажи EM — возможность купить, а не ...

Недавние распродажи на развивающихся рынках выглядят скорее возможностью, чем сигналом тревоги, так как мировой экономический рост усилился и расширился в 201… читать далее…

15 декабря 2017, 14:59

European, Asian Stocks Slide But US Futures Rebound As Tax Deal Fears Ease

U.S. equity index futures point to a higher open, having rebounded some 10 points off session lows with the VIX stuck on the edge between single and double digits, while European and Asian shares decline as investors assess central banks’ shift toward tighter monetary policy and concern over tax overhaul ahead of final plan.  It has been a groggy end to what is still set to be a third week of gains for MSCI’s global stock index following more upbeat data and signs that central banks including the Federal Reserve will keep treading carefully with interest rate hikes. On Thursday, US stocks closed 0.41% lower after Republican Senator Rubio said he intends to oppose the tax bill as written unless there was a larger child tax credit (currently $1,100). He said GOP leaders “found the money to lower the top (individual tax) rate”, but “can’t find a little bit” more to help working class parents raising children. However, later on, President Trump said he is “very sure” Mr Rubio will vote yes. So still lots of potential changes here before the bills gets voted by the Senate, potentially as soon as Monday, although on Friday, US equities appears sanguine about the risks and have faded most of Thuesday's weakness. “The more the tax bill gets watered down, the less pronounced the effect will be on the dollar.” said Commerzbank currency strategist Esther Reichelt, in Frankfurt. This morning in Asia, markets followed the negative US lead and are trading lower, with the MSCI Asia Pac Index and its ex-Japan couisn both down -0.4%. Australia's ASX 200 (-0.2%) closed negative as weakness in its top-weighted financials sector weighed, while Nikkei 225 (-0.5%) was pressured after a mixed Tankan survey but then rebounded amid reports the BoJ is to tweak its language due to dovish dissent. Shanghai Comp. (-0.6%) and Hang Seng (-0.9%) were subdued after the recent quasi-tightening in China and with President Xi also expected to stress the need to curb financial risks at next week’s annual Central Economic Work Conference. European markets were all lower, with the Stoxx Europe 600 Index following benchmarks from Hong Kong to Tokyo and Sydney lower, and down 0.4%, impacted by utilities and financials stocks post the marginally dovish ECB meeting. On a sector breakdown, consumer discretionary names are seen lower in the wake of a profit warning from Salvatore Ferragamo (-8%) and H&M (-15%) delivering an uninspiring trading update. Retailers led the decline as Hennes & Mauritz AB plunged after reporting a slump in quarterly sales. Banks struggled too on a renewed dip in euro zone bond yields after Thursday’s message from the European Central Bank that it was sticking to its pledge to keep money pouring into the bloc’s economy for as long as needed. In currencies, the dollar steadied, but was down at 112.21 against the yen and, despite having been at a one-month high earlier in the week, stuttering toward a 0.3% weekly drop against a basket of six rival currencies, while Treasuries declined as some tax cut jitters remained. South Africa’s rand gained even as volatility soared before the ruling African National Congress meets this weekend to elect a new leader. Meanwhile, the euro headed for a weekly gain after the ECB remained cautious about the prospects of reaching its inflation goals, even as it reiterated a pledge to keep stimulus in place. The pound dropped and yields on U.K. gilts fell to the lowest since September amid speculation Brexit talks are about to get more difficult. Russia’s ruble fluctuated after the nation’s central bank cut rates more than expected. The New Zealand dollar was the biggest mover among major currencies, up 0.6 percent at a two-month high of after the country's Finance Minister Grant Robertson said he was comfortable with the currency's general trend. And speaking of Brexit, PM Theresa May is expected to back down on Brexit date plan in order to avoid a second defeat in the commons next week, according to press reports. German Chancellor Merkel said EU leaders will move to Brexit phase 2 today, but added that a lot of work is still needed regarding migration. There were also reports that EU leaders warned UK Conservative Party rebels have made a no deal Brexit more likely. Back in the US, uncertainty surrounding the fate of U.S. tax reform is threatening to sour what has been a stellar run for equities in 2017, as money managers dial back their appetite to take risk amid signs that the eight-year stock rally may not be far from its end. PIMCO sees the good times rolling on in 2018 as global economies grow in sync, but the bond giant warned investors to brace for a downturn as central banks from the U.S. to Europe gradually tighten policy. “The theme is still one of gradual policy tightening,” said Societe Generale interest rates strategist Jason Simpson, who said the Bank of England had also sent a steady-as-you-go signal at its meeting the previous day. “Today is also going to be the last one (this year) of any real flow... so bond yields are just squeezing lower as any short positions are being covered.” In commodity markets, crude oil futures extended gains, after rising on Thursday as a pipeline outage in Britain continued to support prices despite forecasts showing a global crude surplus in the beginning of next year. U.S. crude added 0.3 percent, or 15 cents, to $57.19 a barrel, after gaining 0.8 percent overnight. Brent crude futures were up 0.2 percent, or 14 cents, at $63.45. Industrial metal copper CMCU3, headed for a 3 percent weekly gain after two weeks of hefty falls while gold edged away from a four month low hit earlier in week as it nudged up to $1,257 an ounce. Bitcoin was on track for its smallest weekly move since October, having turned less volatile following the start of trading of Cboe Global Markets’ bitcoin futures. Rival CME Group will launch its own version on Sunday. The cryptocurrency was trading near a record high around $17,000 on the Bitstamp exchange, having climbed around 15 percent since Monday - the fifth straight week of gains. Economic data include Empire State Manufacturing Survey and industrial production. Overnight Bulletin Summary from RanSquawk Last trading session of the week sees EU bourses slightly softer. USD is under pressure again amid political headwinds over the tax plan Looking ahead, highlights include US Industrial Production, Baker Hughes Rig Count and the Brussels Summit Market Snapshot S&P 500 futures up 0.15% to 2,660 STOXX Europe 600 down 0.3% to 387.86 MSCI Asia down 0.4% to 170.33 MSCI Asia ex Japan down 0.4% to 554.09 Nikkei down 0.6% to 22,553.22 Topix down 0.8% to 1,793.47 Hang Seng Index down 1.1% to 28,848.11 Shanghai Composite down 0.8% to 3,266.14 Sensex up 0.7% to 33,489.07 Australia S&P/ASX 200 down 0.2% to 5,996.97 Kospi up 0.5% to 2,482.07 German 10Y yield fell 1.3 bps to 0.303% Euro up 0.1% to $1.1791 Italian 10Y yield fell 0.3 bps to 1.529% Spanish 10Y yield fell 2.6 bps to 1.421% Brent futures little changed at $63.29/bbl Gold spot up 0.4% to $1,257.33 U.S. Dollar Index up 0.02% to 93.51 Top Overnight News President Donald Trump said he’s “very sure” Marco Rubio will vote to pass tax legislation after senator threatened to vote against the bill unless negotiators boost the child tax credit. Vice President Mike Pence’s Mideast trip shrinks after President Trump declared Jerusalem the capital of Israel European Union leaders discuss the latest Brexit developments as May returns to Brussels after parliament defeat on Brexit legislation Tax Overhaul Suspense as Holdouts Remain; Brevan Howard Braced for Worst Year Ever; Oracle Shares Jump on Cloud Warning Congressional Republicans are scheduled to reveal final details of their agreed-upon tax-overhaul legislation today: Tax Debate Update Central bankers are gingerly trying to take away the punch bowl without interrupting the party with moves either so well-telegraphed, or so tiny, and the language about future action so hedged, that there was barely a ripple in financial markets Mylan NV, Perrigo Co. and Reckitt Benckiser Group Plc are among companies that submitted preliminary bids for Merck KGaA’s consumer health division, which could be valued at about $5 billion With consumer spending surging, retailers are hoping for something they haven’t seen since the last recession began a decade ago: a truly great Christmas Brevan Howard Asset Management is bracing for at least $1 billion of client withdrawals at the end of the month, as its main fund heads for a record annual loss A new dissenter on the Bank of Japan board calling for more stimulus has prompted the BOJ to adjust its communications to flag risks of additional easing GM Squares Off With Old Detroit Foes in $90 Billion Pickup Fight BOJ Is Said to Tweak Message as Dissenter Calls for More Easing Deutsche Telekom Recharges Dutch Challenge With Tele2 Deal New Africa Gas Comes at Right Time for Europe in Supply Woes Brexit Talks Set to Get Messy as Unity Hits High-Water Mark Asia stocks were mostly lower as the downbeat tone rolled over from the US close, where sentiment was pressured on tax reform discord after Republican Senator Rubio said he would not vote for the GOP tax bill unless it expands the child tax credit. ASX 200 (-0.2%) closed negative as weakness in its top-weighted financials sector weighed, while Nikkei 225 (-0.5%) was pressured after a  mixed Tankan survey but then rebounded amid reports the BoJ is to tweak its language due to dovish dissent. Shanghai Comp. (-0.6%) and Hang Seng (-0.9%) were subdued after the recent quasi-tightening in China and with President Xi also expected to stress the need to curb financial risks at next week’s annual Central Economic Work Conference. Conversely, Indian markets  bucked the trend with gains of 0.9% after the country’s ruling BJP retained power in Gujarat with a clear majority and won  Himachal Pradesh from Congress in the state assembly elections. Finally, 10yr JGBs were relatively uneventful despite the  indecisive tone in Japan, while the BoJ Rinban announcement also failed to spur demand with the total amount at a reserved JPY 290bln in 10yr-25yr+ maturities. PBoC injected CNY 80bln via 7-day reverse repos and CNY 70bln via 28-day reverse repos, for a weekly net injection of CNY 80bln vs. last week's CNY 510bln net drain. PBoC set CNY mid-point at 6.6113 (Prev. 6.6033). BoJ reportedly is to tweak its message after dissenter calls for further easing, according to reports. Japanese Tankan Large Manufacturing Index (Q4) 25 vs. Exp. 24 (Prev. 22). Tankan Large Manufacturing Outlook (Q4) 19 vs. Exp. 22 (Prev. 19) Tankan Large All Industry Capex (Q4) 7.4% vs. Exp. 7.5% (Prev. 7.7%) Top Asian News Noble Group Sees More Pain Ahead as Creditor Talks Progress Sunac Shares Plunge 10% After Placement Prices Near Bottom End Hong Kong Moves Toward Dual-Class Shares, Wooing Next Alibaba Hong Kong Stocks Retreat as Volatility Climbs to One-Year High Financials to Overshadow Drugmakers in India’s Revamped Sensex Vietnam Coffee Trade Slows as Buyers Bet on Bigger Discounts AirAsia Said in Talks on Sale of Leasing Arm to Everbright After Overtaking Diageo, China’s Moutai Plans Three IPOs European equities have kicked the final trading session of the week in muted fashion, and lacking in firm direction (Eurostoxx 50 -0.1%) with yesterday’s ECB decision/press conference seeing no follow through into today’s trade. On a sector breakdown, consumer discretionary names are seen lower in the wake of a profit warning from Salvatore Ferragamo (-8%) and H&M (-15%) delivering an uninspiring trading update. Consumer discretionary aside, individual movers have been relatively limited thus far. The extent of the opening/early bid on core EU bonds appeared somewhat excessive in the absence of something more supportive/bullish, and without much further follow-through buying, Bunds and Gilts have duly drifted back down. The 2 benchmarks are now middle and near the bottom of ranges respectively, with the 10 year UK debt future just off a new 125.33 low (+4 ticks vs +40 ticks at best, and seemingly unwinding some of Thursday’s marked outperformance). A degree of stability in stocks may have encouraged longs to book profits/pare positions, and trading volumes are relatively light after yesterday’s CB-inflated turnover, so price moves are exaggerated. Indeed, for many this could mark the last full week of the year before Xmas and the New Year. Elsewhere, USTs continue to bide time just a few ticks below parity, with IP data ahead. Top European News Brexit Talks Set to Get Messy as Unity Hits High-Water Mark Bank of Russia to Rescue Third Major Lender in Four Months Natixis Deal to Boost MiFID Pricing Power Says Oddo’s Beumer Airbus Puts Helicopters Chief in Line for Top Job in Shakeup In FX, the USD is under pressure again following concerns over Rubio’s commitment to the latest draft of the US tax bill . The Index is only just maintaining 93.500+ status and still looking vulnerable within the broader 94.000-93.000 recent range. JPY finding some resistance against latest safe-haven gains just above 112.00 vs the USD but sellers appear eager to short the headline pair ahead of 112.50 amidst talk that the BoJ may be listening to dovish dissenters and tweak guidance accordingly. Cable hugs the 1.3400 handle amidst ongoing Brexit uncertainty and conflicting headlines. AUD/CAD/NZD all firmer vs their US rival and not just because the Dollar is weaker across the board. EUR Still struggling to advance beyond 1.1800 vs the Greenback, but equally supported well before 1.1713 and with 2.9bln option interest at the big figure running off today. The Russian Federation Central bank unexpectedly cuts its key rate by 50bps to 7.75% vs. Exp. 8.00% (Prev. 8.25%). In commodities, gold remains supported by aforementioned tax concerns while copper and aluminium prices outperformed their peers during Asia-Pac trade with some attributing the price action to recent Chinese industrial output data. In the energy complex, WTI and Brent crude futures continue to remain firmer in the wake of ongoing supply disruptions from the Forties pipeline with the latest reports suggesting that repairs could take several weeks. The Nigerian Pengassan white-collar oil and gas workers union is in discussions with the government about cancelling their intended Dec 18th strike. Chinese finance ministry are to remove export duties on steel products. Looking at the day ahead, the conclusion of the EU Council summit will be the main focus for markets on Friday with leaders expected to endorse Brexit talks moving to the next stage. Away from that it should be fairly quiet with October trade data for the Euro area, along with the December empire manufacturing and November industrial production prints in the US the only data due. US Event Calendar 8:30am: Empire Manufacturing, est. 18.7, prior 19.4 9:15am: Industrial Production MoM, est. 0.3%, prior 0.9% 9:15am: Capacity Utilization, est. 77.2%, prior 77.0% 9:15am: Manufacturing (SIC) Production, est. 0.3%, prior 1.3% 4pm: Total Net TIC Flows, prior $51.3b deficit 4pm: Net Long-term TIC Flows, prior $80.9b DB's Jim Reid concludes the overnight wrap I wonder whether with all the central bank meetings out of the way now and with today’s continuation of the EU summit likely to be a non-event, activity will now grind to a halt. To be fair, we still have the potential conclusion to the tax reform story next week and the regional elections in Catalonia, but outside of these it feels like that could be pretty much it for the worthwhile 2017 newsflow. On central banks, according to DB’s Mark Wall the buzzword from the ECB yesterday was “Confidence”. Rising optimism was signalled in the much larger-than-expected upward revisions to the staff GDP forecasts and the “significant” reduction in slack creating grounds for “greater confidence” in the normalisation of inflation. However, the ECB is in no rush to change the policy stance according to Mark. The language on the stance was resolutely unchanged. The ECB still needs to see the recovery in inflation to take action. Indeed they’ve revised down the core inflation forecasts from 1.3% to 1.1% in 2018 even if the headline rate has gone up with energy prices. Our economists are more confident a turning point has been reached in the inflation cycle, but recent inflation disappointments and the euro’s appreciation this year mean the next step-up in core inflation is later in 2018. With regards to the BoE, our economists felt it was a slightly hawkish set of minutes but the reality is that the outlook in very Brexit driven and thus highly uncertain and changeable. Our economists thinks rates are unlikely to rise before 2019 though. See their report on both meetings. Away from central banks, the big data focus yesterday was another round of super strong flash PMIs in Europe. The December manufacturing print for the Euro area came in better than expected 60.6 (vs. 59.7 expected), up from 60.1 the month prior. That is the highest reading on record since 1997. The services reading also jumped a bit more than expected to 56.5 (vs. 56.0 expected) from 56.2, which in turn helped the composite jump 0.5pts to 58.0 and the highest since February 2011. That data is consistent with a fairly incredible +0.8% qoq or +3.75% annualised GDP growth rate for the Euro area. At the country level it was the data in Germany which really stood out with the manufacturing reading surging 1.1pts to 63.3 (vs. 62.0 expected) and the highest on record. The composite rose 1.4pts to 58.7 (vs. 57.2 expected) and to the highest in 80 months. In France the manufacturing print jumped to 59.3 (from 57.7; 57.2 expected) although a slightly weaker services reading saw the composite edge down to 60.0 from 60.3. The data for the core implies a slight decline on average for the data in the periphery, mostly due to manufacturing. So while the data implies a very strong growth picture, it’s worth noting that the prices data was a little softer at the margin. The composite output prices reading for the Euro area declined 0.4pts to 53.0 for example, while input prices were also down slightly, albeit from still elevated levels. So not quite the same read through for inflation just yet. Onto US equities which fluctuated and then closed 0.3%-0.4% lower, partly due to increased uncertainty on tax reforms. Yesterday afternoon, Republican Senator Rubio noted he intends to oppose the tax bill as written unless there was a larger child tax credit (currently $1,100). He said GOP leaders “found the money to lower the top (individual tax) rate”, but “can’t find a little bit” more to help working class parents raising children. Although later on, President Trump said he is “very sure” Mr Rubio will vote yes. So still lots bubbling along before the bills gets voted by the Senate, potentially as soon as Monday. This morning in Asia, markets have followed the negative US lead and are trading lower. The Nikkei (-0.10%), China’s CSI (-0.73%) and Hang Seng (-0.98%) are all down while the Kospi is up 0.62% as we type. Now recapping other market performance from yesterday. The S&P fell 0.41%, with consumer discretionary the only sector in the green following the retail sales beat, while losses were led by materials and health care stocks. European markets were all lower, with the Stoxx 600 down 0.46%, impacted by utilities and financials stocks post the marginally dovish ECB meeting. Across the region, the DAX (-0.44%), FTSE (-0.65%) and CAC (-0.78%) all fell modestly. Government bond yields were little changed (UST 10y +0.7bp; Bunds -0.2bp) but Gilts outperformed with yields down 4.2bp to the lowest since mid-September after the BOE retained a cautious economic outlook. Turning to currencies, the US dollar index and Sterling firmed 0.21% and 0.08% respectively, while Euro fell 0.41% post the ECB meeting. In commodities, WTI oil was up 1.01% despite IEA forecasts that new supply may grow faster than demand next year. Elsewhere, precious metals weakened and broadly reversed the prior day’s gains (Gold -0.20%; Silver -1.11%) while other base metals modestly increased (Copper +0.53%; Zinc +0.60%; Aluminium +0.95%). Away from the markets, we round out other central bank actions from yesterday. In Switzerland, the SNB made no change to cash rates but did lift its inflation forecast and now expects it to reach its target in late 2020 mainly due to the Franc’s depreciation. However, the SNB President Jordan said “it’s still early, very early, to talk about (rate) normalization……there’s no risk of inflation, also inflation expectations are very well anchored at a much lower level.” Over in Norway, Norges Bank also left its rates unchanged, but the improved growth and inflation forecasts allowed the bank to bring forward its projected first rate hike, which is now expected to be in late 2018. The Krone rose 0.69% versus Euro yesterday. Over in France, the central bank now projects GDP growth of 1.8% this year and 1.7% in 2018. The ECB’s Villeroy noted the French economic recovery is “significant and sustainable” but the problem is we’re hitting up against “structural limits” and need reforms to materially increase growth. He also added to the Bitcoin debate, noting it is “clearly not a currency, even a virtual one” and that it’s a "speculative asset" and those who invest in it do it at their own risks. Ahead of the Catalonia elections on 21 December, the latest Metroscopia polls shows the anti-independence groups leading with a combined 44.9% support versus the separatists at 43.8%.  Elsewhere, Spain’s Supreme Court refused a request from Catalan separatist Jordi Sanchez that he be freed from jail to participate in the election. In Germany, our economists have just published their outlook piece. They expect the economic boom to continue in 2018 with GDP growth of 2.3% again, which would represent an above-potential rate for the fifth consecutive year. They expect the boom to be driven by investment activity, fuelled by rising export demand and considerably higher capacity utilisation and ongoing strong employment growth. On inflation, due to the base effects from energy prices, inflation may slow down temporarily at the beginning of the year. For more detail, please refer to their note. Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the November retail sales ex-auto number was above market at 1% mom (vs. 0.6% expected) even with favourable revisions to the prior month. Following this solid report, the Atlanta Fed’s GDPNow estimate of 4Q GDP growth has increased to 3.3% saar versus 2.9% previously. The weekly initial jobless claims (225k vs. 236k expected) and continuing claims (1,886k vs. 1,900k) were slightly lower than expectations. Elsewhere, the December manufacturing US PMI was above market (55 vs. 53.9 expected), but services (52.4 vs. 54.7 expected) and the composite PMIs were both below (53 vs. 54.5 previous). Finally, headline import prices rose 3.1% yoy, but excluding fuel, growth was 1.4% yoy. The UK’s November retail sales (ex-fuel) was well above expectations and rose 1.2% mom (vs. 0.4% expected) to the highest in seven months – with the strength partly due to the Black Friday discounts. Elsewhere, France’s final reading of the November CPI was revised lower to 1.2% yoy (vs. 1.3% expected), while Italy’s final CPI reading was in line at 1.1% yoy. Looking at the day ahead, the conclusion of the EU Council summit will be the main focus for markets on Friday with leaders expected to endorse Brexit talks moving to the next stage. Away from that it should be fairly quiet with October trade data for the Euro area, along with the December empire manufacturing and November industrial production prints in the US the only data due.

05 декабря 2017, 20:38

An Angry Rudy Havenstein Lashes Out: "No, The Fed Is Not Populist"

Submitted by Rudy Havenstein After years of seeing terrible market news and commentary, I’m pretty jaded, but when I saw the recent Marketwatch op-ed, “Janet Yellen’s true legacy is her focus on middle-class wages” (by Tim Mullaney), I thought such nonsense needed a reponse that went beyond 280 characters. (Half of Mullaney’s article is an anti-Trump rant, which is fine, and which I will ignore). "If something is nonsense, you say it and say it loud."– Nassim Taleb The article’s tagline, “Outgoing Federal Reserve chairwoman is a true populist, representing the interests of ordinary people”, reflects an Orwellian perversion of language that is so common today, a bizarro land where “inflation” is “growth”, “debt” is “wealth,” “QE” is “economic stimulus,” and “plutocracy” is “populism”.    Janet Yellen heads what is arguably the most anti-populist entity on Earth. It’s a very strange world we live in, where the actions of the head of a private bank cartel are declared to be “populist” by countless econ professor cultists and their media acolytes, as average Americans stand in stunned amazement at the elites’ cluelessness.  So what is “populism”?  I asked Google, which hopefully excluded any Russian propaganda from the answer: Ok, I don’t know about you, but reading that I immediately thought “That’s Janet Yellen.”  (I would prefer for this article to be about someone truly evil, like Alan Greenspan or Tim Geithner, as I’ve always thought of Yellen as more of a caretaker, a bit like Bruce Dern in Silent Running.) This ridiculous idea of the Fed as “populist” is not a new phenomenon.  You have, for example, Canadian humor magazine Macleans back in 2014: And none other than noted hairdresser Paul McCulley said this recently: [You may remember Paul McCulley as the guy who said in 2002 (to cat afficianado Paul Krugman’s glee), “Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”  So how’d that work out for the average American? ] Mullaney writes: We hear a lot about populism these days, a political philosophy the dictionary says is about a party or faction “seeking to represent the interest of ordinary people.” And that’s what Yellen did as Fed chair…. Really? I suppose it’s fitting that a day after the Marketwatch propaganda dropped, the @FedHistory account tweeted this: (As an aside, I ruined the #FedHistory hashtag for the Fed, but that’s another topic.) Ok, so Aldrich…Aldrich…rings a bell. Oh yeah… So who were these founding populists, “seeking to represent the interest of ordinary people,” who assembled on Jekyll Island?   Clearly these were the Joe Six-Packs of the day. The “duck hunt” ruse was due to the incredible secrecy regarding the Federal Reserve’s formation: Apparently the founders of the Fed weren’t committed to the “transparency” we have today, where, for example, Fed meeting transcripts are released after a 5-year lag, presumably to give the statutes of limitations time to expire. (Another canard is that the Fed is “independent”, which apparently it is from a corrupt, feckless Congress, but hardly from Citadel, Barclay’s, Pimco, Goldman, Citigroup, JPMorgan or Warburg Pincus, but I digress.) So why such secrecy if these populists were just there to “represent the interest of ordinary people”?  Surely the public would have supported the two main reasons these men formed the Fed, to stifle competition and arrange for the socialization of bank losses?  I mean, to mandate price stability and stable employment? Father of the Fed Paul Warburg tries to explain: So, um…even a century ago the populace had “a deep feeling of fear and suspicion with regard to Wall Street’s power and ambitions.”  Maybe for good reason, then as now.   Upton Sinclair, in his 1927 novel “Oil!” (an inspiration for the film “There Will Be Blood”), happens to give a very good description of the Federal Reserve: Clearly, Mullaney sees Janet as a different animal than the founders of her cartel: “…she held interest rates low enough, for long enough, that consumers’ debt-service burdens reached 20-year lows while real household incomes recovered all of the ground lost in the recession and moved toward all-time highs.” As is typical of Fed cheerleaders, all credit for any recovery goes to the Fed, and no blame for the preceding bubble and collapse.  The heroic arsonist helped put out the fire!  I will concede that Yellen’s Fed did oversee lowering rates to prehistoric levels, and also induced massive additional consumer borrowing.  The “debt burden”may be low now, but God help the poor debtors if rates ever return to anywhere close to average historical levels (not to scare you, but that’d be around a 5% Fed Funds Rate).   Of course, by then Yellen will be long gone, giving $500k speeches (inflation, you know), collecting her COLA-adjusted pensions and perhaps muddying the minds of another generation of Berkeley undergrads. She’ll be fine. So yes, low rates are awesome, but while Citigroup (which should not exist) et al. may be able to borrow at 0%, still NO ZIRP FOR YOU! As for real incomes, I do hope we can someday get back to Nixon-era levels.  To Marketwatch Tim, Janet Yellen is some sort of mythical figure, able to single-handedly create jobs, hike wages, and ameliorate the consumer debt burden.  This of course is nonsense.  First of all, look at Janet Yellen’s resume: Other than perhaps some hiring at the Fed and the Berkeley econ department, it is hard to imagine any jobs that Ms. Yellen herself actually created.  Maybe she hired someone to garden her yard, and that’s commendable, but Yellen strangely believes that without formerly-tenured econ professors running things (to borrow from Jim Grant), the US economy would collapse: “Will capitalist economies operate at full employment in the absence of routine intervention? Certainly not.”- Janet Yellen, 1999 This is a rather laughable statement coming from someone who won the 2010 NABE “Adam Smith Award”.  So how the heck did US unemployment drop to 5% in 1900 without a former Berkeley econ professor to guide it?  How did it even get as low as 4% in 1890 with no FOMC?  I guess it’s a mystery.  Speaking of Adam Smith, he described the folly of Janet’s position well in “The Wealth of Nations”: The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. Anyway, academia has been very good to Yellen, as her 2010 financial disclosure report shows.  This report shows, among many other things at the time, over $21,000 a month just in University of California pension income, “$500k-$1M” in her Heartland 500 Index fund IRA and a $50,000 “honorarium” from Chinese internet company Netease.  No doubt she can also look forward to many days of giving $250,000 speeches to those who most benefited from her largesse.  Having such a huge income (at least relative to the median US wage earner, who makes $30,557 a year) no doubt factors into Yellen’s fervent desire to spike the cost of living for the peasants.  Throwing in Janet’s $200k Fed salary, a very conservative estimate puts Yellen’s annual income in the top 99.9% of all Americans.  Quite literally, Janet Yellen is the 0.1%. (To be fair, the Fed pays its staff very well, which is  probably a side-effect of being able to create currency at will).  Yellen has served her 0.1% well.  Besides the Fed’s latest mandate, the booming S&P 500 index, and a 4.1% unemployment rate (which, if accurate, would mean Trump would never have been elected), Yellen oversees a nirvana where American wealth inequality is now at record levels on her watch, even worse than Russia or Iran(!!), with the top 1% now owning 38.5% of everything!  Yay! A few more examples: The CEO-to-worker compensation ratio is at 224-to-1 in 2016, up from 22.5 back in 1973, millennials live with their parents at unprecedented historical levels (largely because Fed and government policies have made house prices far higher than they would otherwise be), and Americans are more burdened by student loan debt than ever.  I won’t even mention subprime auto delinquencies.  All this is in the 9th year of our incredible global synchronized recovery!  (What happens if there’s ever another recession, which of course there can’t be?) Then there are the senior citizens who have been destroyed by ZIRP and inflation (which Yellen thinks is too low): These seniors’ economic woes may explain why the elderly are the only demographic group with a rising labor force participation rate since 2000.  Would you like fries with that? Meanwhile, the populist owners of the Federal Reserve are doing great         Moreoever, the Fed’s real claim to fame since 2009, the stock market’s “wealth effect” (also known as “trickle down”) is lost on the 70% of Americans who make less than $50k and are not benefitting from the Fed casino. "There is absolutely no econometric evidence that there is a wealth effect except for a very slim slice of our highest wealth individuals."Lacy Hunt (I will, out of kindness, refrain from mentioning that In the pre-Fed Panic of 1907, the Dow fell 48.5% from its all-time high, while in the Fed-mentored Panic of 2008-2009, the Dow fell 54.4%.) Everything the Fed has done this century has been designed to get Americans into more debt, and most importantly to protect the (global) too-big-to-fail money-center banks. Everything else is secondary.  Just one example of this reality is when a “lightbulb went on” for Neil Barofsky, the Special Inspector General of the TARP: There you have populist Yellen’s Fed in a nutshell: it’s all about the banks.  (Note that “Turbo” Tim Geithner, former tax scofflaw, NY Fed President during the height of TBTF bank fraud, AIG-creditor savior, US Treasury Secretary, and overall weasel, is now being rewarded as President of Warburg Pincus). The Federal Reserve and Janet Yellen, despite the magical thinking of the Fed’s many media shills, are no more “populist” than JPMorgan Chase or Lloyd Blankfein.  If the Fed ever happens to help “the average American” through some action, it’s by accident, and there is plenty of evidence that the average American has not only not recovered from Great Depression II, but is actually worse off in real terms.  Time to wake up. “Ever get the feeling you've been cheated?”Johnny Rotten  

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29 ноября 2017, 23:32

Here Is Your Chance To #AskNeel Kashkari Anything

It's that time again: Minneapolis Fed president, TARP creator and former Goldman and PIMCO employee Neel Kashkari is holding one of his periodic "open" twitter forums, where he will be taking questions from the general audience at 3:30pm ET. [email protected] be taking questions starting at 2:30p CT. Use #AskNeel to participate. pic.twitter.com/3iCBjylw5c — Minneapolis Fed (@MinneapolisFed) November 29, 2017 For those who want to ask the uber-dovish Fed president a question, just make sure to take it with #AskNeel on twitter, and hope the answer isn't too controversial for a response. A running tally of questions and answers is shown below. #AskNeel Tweets !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^http:/.test(d.location)?'http':'https';if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=p+"://platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs");

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25 ноября 2017, 08:03

Big asset managers step up gender diversity drive

Pimco, Fidelity, Vanguard link with professional body over underrepresentation of women in UK

23 ноября 2017, 07:01

Китайский корпоративный кредит: пять тем на 2018 год

Рост рынка оффшорных корпоративных облигаций в Китае, по-видимому, продолжится в 2018 году, чему способствуют финансовые потребности государственных предприятий и частных компаний, - пишет блог Pimco . За последние 12 месяцев этот рынок продемонстрировал исключительную гибкость и высокую производительность благодаря разнообразным техническим и макроэкономическим факторам, помогая Китаю стать ведущим эмитентом долговых обязательств развивающихся рынков и растущим присутствием в глобальных кредитных индексах. Вот пять восходящих тем, которые, как мы ожидаем, будут продолжать стимулировать корпоративные облигации, выраженные в долларах США, выпущенные на офшорном рынке в следующем году. 1) Многолетняя консолидация мощностей и уничтожение запасов собственности. Коэффициент использования производственных мощностей Китая восстановился до двухлетнего максимума в 76% в третьем квартале 2017 года из-за ряда факторов, таких как реформы в области предложения, более высокий экспортный спрос и улучшение внутреннего спроса. 2) Корпоративная цена. Рост базовой инфляции и инфляции цен на сырьевые товары свидетельствует о том, что производители все чаще получают более высокие издержки для клиентов. 3) Нетоварный сектор. Более эффективная корпоративная ценовая политика привела к тому, что внереализационные сектора, такие как электроника, технология, машиностроение, здравоохранение и жилье, станут основными движущими силами промышленного дохода и роста прибыли. 4) Дифференцированный рост капвложений. Хотя мы ожидаем, что в 2018 году рост инвестиций в основной капитал будет умеренным, более сильный рост капитальных затрат частного сектора, особенно в обрабатывающей промышленности, вероятно, частично компенсирует более слабый рост инвестиций в SOE. 5) Различия в кредитных принципах. Кредитные показатели для компаний инвестиционного класса улучшились по сравнению с рентабельностью EBITDA (прибыль до уплаты процентов, налогов, амортизации и амортизации), а уровень задолженности остался неизменным из-за более медленных слияний и поглощений (M & A) и роста капвложений. Информационно-аналитический отдел TeleTrade Источник: FxTeam

22 ноября 2017, 12:16

Почему очередной финансовый коллапс неизбежен

Москва, 22 ноября - "Вести.Экономика". Ситуация в мировой экономике и мире финансов только на первый взгляд кажется стабильной, однако на самом деле созданы практически все условия для нового финансового краха.

22 ноября 2017, 09:25

Почему очередной финансовый коллапс неизбежен

Ситуация в мировой экономике и мире финансов только на первый взгляд кажется стабильной, однако на самом деле созданы практически все условия для нового финансового краха.

22 ноября 2017, 09:23

Почему очередной финансовый коллапс неизбежен

Ситуация в мировой экономике и мире финансов только на первый взгляд кажется стабильной, однако на самом деле созданы практически все условия для нового финансового краха.

21 ноября 2017, 00:10

Vanguard Launches Investment-Grade Corporate Bond ETF of ETF

Vanguard rolls out all-term investment-grade corporate bond ETF.

19 ноября 2017, 19:51

The Stage Has Been Set For The Next Financial Crisis

Authored by Constantin Gurdgiev via CaymanFinancialReview.com, Last month, the Japanese government auctioned off some US$4 billion worth of new two-year bonds at a new record low yield of negative 0.149 percent. The country’s five-year debt is currently yielding minus 0.135 percent per annum, and its 10-year bonds are trading at -0.001 percent. Strange as it may sound, the safe haven status of Japanese bonds means that there is an ample demand among private investors, especially foreign buyers, for giving away free money to the Japanese government: the bid-to-cover ratio in the latest auction was at a hefty US$19.9 billion or 4.97 times the targeted volume. The average bid-to-cover ratio in the past 12 auctions was similar at 4.75 times. Japan’s status as the world’s most indebted advanced economy is not a deterrent to the foreign investors, banking primarily on the expectation that continued strengthening of the yen against the U.S. dollar, the U.K. pound sterling and, to a lesser extent, the euro, will stay on track into the foreseeable future. See chart 1 In a way, the bet on Japanese bonds is the bet that the massive tsunami of monetary easing that hit the global economy since 2008 is not going to recede anytime soon, no matter what the central bankers say in their dovishly-hawkish or hawkishly-dovish public statements. And this expectation is not only contributing to the continued inflation of a massive asset bubble, but also widens the financial sustainability gap within the insurance and pensions sectors. The stage has been set, cleaned and lit for the next global financial crisis. Worldwide, current stock of government debt trading at negative yields is at or above the US$9 trillion mark, with more than two-thirds of this the debt of the highly leveraged advanced economies. Just under 85 percent of all government bonds outstanding and traded worldwide are carrying yields below the global inflation rate. In simple terms, fixed income investments can only stay in the positive real returns territory if speculative bets made by investors on the direction of the global exchange rates play out. We are in a multidimensional and fully internationalized carry trade game, folks, which means there is a very serious and tangible risk pool sitting just below the surface across world’s largest insurance companies, pensions funds and banks, the so-called “mandated” undertakings. This pool is the deep uncertainty about the quality of their investment allocations. Regulatory requirements mandate that these financial intermediaries hold a large proportion of their investments in “safe” or “high quality” instruments, a class of assets that draws heavily on higher rated sovereign debt, primarily that of the advanced economies. The first part of the problem is that with negative or ultra-low yields, this debt delivers poor income streams on the current portfolio. Earlier this year, Stanford’s Hoover Institution research showed that “in aggregate, the 564 state and local systems in the United States covered in this study reported $1.191 trillion in unfunded pension liabilities (net pension liabilities) under GASB 67 in FY 2014. This reflects total pension liabilities of $4.798 trillion and total pension assets (or fiduciary net position) of $3.607 trillion.” This accounts for roughly 97 percent of all public pension funds in the U.S. Taking into the account the pension funds’ penchant for manipulating (in their favor) the discount rates, the unfunded public sector pensions liabilities rise to $4.738 trillion. Key culprit: the U.S. pension funds require 7.5-8 percent average annual returns on their assets to break even on their future expected liabilities. In 2013-2016 they achieved an average return of below 3 percent. This year, things are looking even worse. Last year, Milliman research showed that on average, over 2012-2016, U.S. pension funds held 27-30 percent of their assets in cash (3-4 percent) and bonds (23-27 percent), generating total median returns over the same period of around 1.31 percent per annum. Not surprisingly, over the recent years, traditionally conservative investment portfolios of the insurance companies and pensions funds have shifted dramatically toward higher risk and more exotic (or in simple parlance, more complex) assets. BlackRock Inc recently looked at the portfolio allocations, as disclosed in regulatory filings, of more than 500 insurance companies. The analysts found that their asset books – investments that sustain insurance companies’ solvency – can be expected to suffer an 11 percent drop in values, on average, in the case of another financial crisis. In other words, half of all the large insurance companies trading in the U.S. markets are currently carrying greater risks on their balance sheets than prior to 2007. Milliman 2016 report showed that among pension funds, share of assets allocated to private equity and real estate rose from 19 percent in 2012 to 24 percent in 2016. The reason for this is that the insurance companies, just as the pension funds, re-insurers and other longer-term “mandated” investment vehicles have spent the last eight years loading up on highly risky assets, such as illiquid private equity, hedge funds and real estate. All in the name of chasing the yield: while mainstream low-risk assets-generated income (as opposed to capital gains) returned around zero percent per annum, higher risk assets were turning up double-digit yields through 2014 and high single digits since then. At the end of 2Q 2017, U.S. insurance companies’ holdings of private equity stood at the highest levels in history, and their exposures to direct real estate assets were almost at the levels comparable to 2007. Ditto for the pension funds. And, appetite for both of these high risk asset classes is still there. The second reason to worry about the current assets mix in insurance and pension funds portfolios relates to monetary policy cycle timing. The prospect of serious monetary tightening is looming on the horizon in the U.S., U.K., Australia, Canada and the eurozone; meanwhile, the risk of the slower rate of bonds monetization in Japan is also quite real. This means that the capital values of the low-risk assets are unlikely to post significant capital gains going forward, which spells trouble for capital buffers and trading income for the mandated intermediaries. Thirdly, the Central Banks continue to hold large volumes of top-rated debt. As of Aug. 1, 2017, the Fed, Bank of Japan and the ECB held combined US$13.8 trillion worth of assets, with both Bank of Japan (US$4.55 trillion) and the ECB (US$5.1 trillion) now exceeding the Fed holdings (US$4.3 trillion) for the third month in a row. Debt maturity profiles are exacerbating the risks of contagion from the monetary policy tightening to insurance and pension funds balance sheets. In the case of the U.S., based on data from Pimco, the maturity cliff for the Federal Reserve holdings of the Treasury bonds, Agency debt and TIPS, as well as MBS is falling on 1Q 2018 – 3Q 2020. Per Bloomberg data, the maturity cliff for the U.S. insurers and pensions funds debt assets is closer to 2020-2022. If the Fed simply stops replacing maturing debt – the most likely scenario for unwinding its QE legacy – there will be little market support for prices of assets that dominate capital base of large financial institutions. Prices will fall, values of assets will decline, marking these to markets will trigger the need for new capital. The picture is similar in the U.K. and Canada, but the risks are even more pronounced in the euro area, where the QE started later (2Q 2015 as opposed to the U.S. 1Q 2013) and, as of today, involves more significant interventions in the sovereign bonds markets than at the peak of the Fed interventions. How distorted the EU markets for sovereign debt have become? At the end of August, Cyprus – a country that suffered a structural banking crisis, requiring bail-in of depositors and complete restructuring of the banking sector in March 2013 – has joined the club of euro area sovereigns with negative yields on two-year government debt. All in, 18 EU member states have negative yields on their two-year paper. All, save Greece, have negative real yields. The problem is monetary in nature. Just as the entire set of quantitative easing (QE) policies aimed to do, the long period of extremely low interest rates and aggressive asset purchasing programs have created an indirect tax on savers, including the net savings institutions, such as pensions funds and insurers. However, contrary to the QE architects’ other objectives, the policies failed to drive up general inflation, pushing costs (and values) of only financial assets and real estate. This delayed and extended the QE beyond anyone’s expectations and drove unprecedented bubbles in financial capital. Even after the immediate crisis rescinded, growth returned, unemployment fell and the household debt dramatically ticked up, the world’s largest Central Banks continue buying some US$200 billion worth of sovereign and corporate debt per month. Much of this debt buying produced no meaningfully productive investment in infrastructure or public services, having gone primarily to cover systemic inefficiencies already evident in the state programs. The result, in addition to unprecedented bubbles in property and financial markets, is low productivity growth and anemic private investment. (See chart 2.) As recently warned by the Bank for International Settlements, the global debt pile has reached 325 percent of the world’s GDP, just as the labor and total factor productivity growth measures collapsed. The only two ways in which these financial and monetary excesses can be unwound involves pain. The first path – currently favored by the status quo policy elites – is through another transfer of funds from the general population to the financial institutions that are holding the assets caught in the QE net. These transfers will likely start with tax increases, but will inevitably morph into another financial crisis and internal devaluation (inflation and currencies devaluations, coupled with a deep recession). The alternative is also painful, but offers at least a ray of hope in the end: put a stop to debt accumulation through fiscal and tax reforms, reducing both government spending across the board (and, yes, in the U.S. case this involves cutting back on the coercive institutions and military, among other things) and flattening out personal income tax rates (to achieve tax savings in middle and upper-middle class cohorts, and to increase effective tax rates – via closure of loopholes – for highest earners). As a part of spending reforms, public investment and state pensions provisions should be shifted to private sector providers, while existent public sector pension funds should be forced to raise their members contributions to solvency-consistent levels. Beyond this, we need serious rethink of the monetary policy institutions going forward. Historically, taxpayers and middle class and professionals have paid for both, the bailouts of the insolvent financial institutions and for the creation of conditions that lead to this insolvency. In other words, the real economy has consistently been charged with paying for utopian, unrealistic and state-subsidizing pricing of risks by the Central Banks. In the future, this pattern of the rounds upon rounds of financial repression policies must be broken. Whether we like it or not, since the beginning of the Clinton economic bubble in the mid-1990s, the West has lived in a series of carry trade games that transferred real economic resources from the economy to the state. Today, we are broke. If we do not change our course, the next financial crisis will take out our insurers and pensions providers, and with them, the last remaining lifeline to future financial security.

16 ноября 2017, 23:01

Kyle Bass Is Having A Bad Day - Greek Bank Stocks Crash To 16-Month Lows

Just over a month ago, Kyle Bass discussed why he was long effectively "long Greece." Bass penned a Bloomberg editorial in which the hedge fund founder and CIO called on the IMF to stop bullying Greece -  publicizing the fact that he is now effectively long Greece. Greek government bonds have performed reasonably well so far this year: They’re up about 16%, and if Bass is right, they could have another 20% to 30% over the next 18 months if the IMF abandons its insistence on austerity and acknowledges that debt relief will need to be part of the long-term alleviation of debt. Bass added that, in the near future, voters will elect a more business-friendly government that will help reestablish the country’s creditworthiness, much like the government of Mauricio Macri did for Argentina.  I think you also have an interesting political situation in Greece where I think there's going to be a handoff from the current Syriza government to kind of a more slightly-center-right but very economically independent new leadership in the next, call it, 18 months.   And so, I think you asked why now? And I think you're starting to see green shoots. You're starting to see the banks do the right things finally in Greece and you are about to have new leadership.   So, I think that you're going to see - and if you remember Argentina as Kirschner was going to hand-off – hand the reins over to someone that was much more let's say focused on business and economics than being a kleptocrat, I think you're going to see something again slightly similar in Greece where you have leadership today that might not be the right leadership and the government-in-waiting, I believe, and I think you know Mr. (Mitsutakous) - I think you're going to see something great happen to Greece in the and next, kind of, two years. Then, just yesterday, the founder and chief investment officer of Hayman Capital Management, which manages an estimated $815 million in assets under management, told CNBC that he's been invested in Greek bank stocks that are trading at a quarter of book value. According to Bass, foreign investors are waiting on the sidelines for a tectonic political shift to take place in 2018. The country is now preparing to end its international bailout program next year, with more than €320 billion (US$372 billion) in national debt. On Monday, Greece announced it will distribute 1.4 billion euros ($1.63 billion) as a social dividend to pensioners and others hit hard by the country's austerity program. "My best guess is a snap election for prime minister will be called between April and September of next year and Prime Minister Alexis Tsipras will lose power.   "When that happens, there will be a massive move into the Greek stock market. Big money will flow in as investors feel more confident with a more moderate administration.   "It's going to take Kyriakos Mitsotakis, president of New Democracy, the Greek conservative party, to be voted in as prime minister to reform the culture and rekindle investor confidence," said Bass.   "I have no doubt €15 billion in bank deposits will come back to Greek banks if he's elected. The stock and bond markets will also jump following the election." All of which brings us to today. Greek bank stocks crashed over 8% today - plunging to the lowest since July 2016... And in context, that's not good... However, Bass is not pertrubed. As he explains, economic activity will get reenergized with the right leadership. The sectors global investors are eyeing right now are real estate, energy and tourism. "There is so much potential," he said. "Pimco, Lonestar, KKR are all looking to buy commercial properties in Greece." He also noted that the country will have marquee privatizations over the next two years. "From my perspective, we have to fix two things in Greece for the market to take off," Bass said. "First, Greeks have to stop evading taxes. Second, they have to start repaying their loans." Well if you believe him - you just got an 8% discount on your entry.

16 ноября 2017, 18:36

5 Low-Risk Mutual Funds to Buy on Tax Cut Uncertainty

Mutual funds that are capable of offering favorable returns and bear a lower level of risk might be prudent investment options.

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16 ноября 2017, 15:54

3 Best PIMCO Mutual Funds For Spectacular Returns

Below we share with you three top-ranked PIMCO mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy)

25 марта 2016, 11:36

Scofield: Атаки на Х. Клинтон

06.03.2016 г. на ресурсе China Matters появилась публикация, очень точно нацеленная на нанесение репутационного ущерба Х.Клинтон в контексте предвыборной кампании в США Название статьи: «Ливия: хуже, чем Ирак. Прости, Хиллари». Ливийское фиаско может оказаться камнем преткновения в президентских притязаниях Хиллари Клинтон.

10 ноября 2015, 20:59

Бывший банкир Goldman Sachs и PIMCO вошел в ФРС США

Новым президентом Федерального резервного банка Миннеаполиса стал бывший топ-менеджер инвестбанка Goldman Sachs и фонда облигаций PIMCO Нил Кашкари.

20 октября 2015, 23:32

PIMCO подала иск о мошенничестве к Petrobras

Американская финансовая компания PIMCO подала иск о мошенничестве к бразильскому нефтегазовому концерну Petrobras.

29 апреля 2015, 22:18

Бернанке станет консультировать PIMCO

Бывший глава Федеральной резервной системы США занял пост старшего советника крупнейшего облигационного фонда Pacific Investment Management Co. - PIMCO Total Return.

03 октября 2014, 09:23

Программа "Финансовая стратегия" от 3 октября 2014 года

Вкладчики забирают свои деньги из американского фонда PIMCO . он потерял больше 20 миллиардов долларов. Так инвесторы реагируют на уход из компании одного из основателей Билла Гросса. А вот акции фонда Janus Capital, в который легендарный инвестор устроился на работу, стали пользоваться повышенным спросом. Как на этом заработать?

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05 марта 2014, 12:30

Зачем PIMCO понадобились "токсичные" активы?

Pacific Investment Management Co. привлек средства клиентов, для того чтобы вложиться в "токсичные" активы, пишут западные СМИ со ссылкой на свои источники.