Archive - Dec 2015

If you follow geopolitics, you might have noticed that many of the world’s emerging markets are beset with fractious political dynamics, violence, protests, and any number of other tail risks that could at any time mushroom into black swan events with ramifications for the developed world. As we head into 2016, it’s worth taking stock of the geopolitical events that have shaped EM in 2015 and it's also worth cataloguing what we know about the landscape for the coming year.

The day after the disaster in Paris, Marine Le Pen - leader of France's right-wing 'Front Nationale' party - called for the nation to "re-arm itself" and "eradicate" radical Islam, warning the French people that they are "no longer safe." So, it is hardly surprising that the inevitable fall-out from this ultra-nationalist commentary has resulted in Frenc citizens taking their own protection into their own hands...

In a world of get-rich-quick, fear-of-missing-out "investing," today's epic pump-and-dump is on an old favorite of the manipulators - Avon Products...

In arguably the most important ECB meeting since the introduction of QE, Draghi and Co. are expected by the majority of analysts to act further, with the most likely actions including a cut to the deposit rate and an increase in the Quantitative Easing program. Signalling from the central bank, and particularly Draghi himself over the past month has heavily indicated further stimulus, with Draghi notably saying that `the ECB will do what it needs to in order to raise inflation, as quickly as possible`.

"On all levels, Moscow has always noted that the continuing expansion of NATO, of the military infrastructure of NATO to the east, can only lead to retaliatory measure from the east, from the Russian side, in terms of guaranteeing the security and maintaining a parity of interests."

The question is - which American people...

We are talking of course, about the infamous RRR-hike of 1936-1937, which took place smack in the middle of the Great Recession.

Amid the biggest single-day drop in two months, WTI Crude has been hammred back below once again as a cooling realization washes across the energy complex that Saudi Arabia will make no changes at this week's OPEC meeting (delegate quoted as saying "OPEC unlikley to cut if non-OPEC is not cutting,") leaving a grossly over-supplied (and over-leveraged Shale drillers) world to flounder...

"Emerging economies’ growth prospects look damaged in several respects. The central fact facing EM is the negative external shock that results from weak global trade growth and the collapse of Chinese import growth. This brings to an irreversible end the period of rapid, investment-led Chinese growth and strong global trade growth which had supplied EM with a once-in-a-generation positive external shock during the years between 2002 and 2013."

The EU’s political leaders and other elites are committed to holding the European Union together. To them, united Europe is an article of faith. They hold the idea with as much ferocity and fervor as any religious belief. But while the European Union is a wonderful political idea, it’s economically terrible. And the EU nations will have to face up to bearing enormous costs to save the Europe we wished for.

Good news for Trump who is once again pulling away from the pack; not so good news for Hillary whose "likability problem" is starting to haunt her.   

Did Big Brother Really Pull the Plug?

Great news right? Or is the entire rest of the world exporting deflation to America... and The Fed waving it in?

The Keystone Pipeline debate isn`t really about the environment at all, but rather money.

Janet Yellen is set to begin the first part of her two-day excuse-fest for why The Fed will raise rates (market implied odds at 74%) in December despite Chinese stocks crashing again, carnage in commodities, a revenues recession, plunging EBITDA, a collapse in US manufacturing, housing rolling over, and auto sales fading (yes, read the facts here). Few expect her to rock the boat to change the market's perception, especially following Lockhart's confirmation that The Fed's job mandate has been met.