Archives of “August 2019” month

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Former (Trump) White House communications director says Trump may need to be replaced for 2020

  
Analysis, Politics

LOL @ The Mooch. Anthony Scaramucci was President Trump’s communications director for 11 days

Says Republicans may need to pick a different candidate in 2020
Axios reports on Sunday comment from The Mooch:
  • compared Trump to a melting nuclear reactor
  • said he may support a Republican challenger to Trump
  • “We are now in the early episodes of ‘Chernobyl’ on HBO, where the reactor is melting down and the apparatchiks are trying to figure out whether to cover it up or start the clean-up process”
    “A couple more weeks like this and ‘country over party’ is going to require the Republicans to replace the top of the ticket in 2020.”
Dunno if this is what is moving yen higher. But politics is seemingly outweighing everything else lately!
LOL @ The Mooch. Anthony Scaramucci was President Trump's communications director for 11 days

Asset Managers With $74 Trillion on Brink of Historic Shakeout

  
  Analysis
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This is quite amazing via Bloomberg:

“The industry that gave rise to investing titans Peter Lynch, Bill Miller and Bill Gross is facing an existential crisis.

For years, mom-and-pop investors frustrated by high fees and subpar returns from big-name money managers have been shifting their savings into ultra-cheap funds that simply mimic the returns generated by benchmark stock and bond indexes. Passive investing, as it is known, was in. Active was out.

At first, few noticed the trickle of money out of funds run by star money managers into cheaper index products. But now, no one can ignore the flood. The exodus from active funds has sent fees inexorably lower, led to the loss of thousands of jobs and forced large-scale consolidation among firms. That’s pushing the industry, with $74 trillion in assets as measured by Boston Consulting Group, towards a shakeout where only the strongest will survive.”

 

The graphic tells the story:

North Korea have fired off more missiles (Saturday morning)

  
Analysis, Politics

North Korea have fired off another round of ballistic missile tests Saturday morning NK time.

  • at least two short range missiles fired into the sea
  • off the NK east coast, Hamhung area
North Korea tested ballistic missiles earlier this week also. North Korea have been firing them quite regularly ever since the June 30 meeting between North Korean dictator Kim Jong Un and US President Trump.
North Korea have fired off another round of ballistic missile tests Saturday morning NK time.
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While this is a yen positive (rising geopolitical tensions prompt flows to liquidity) the market has become a bit jaded with the regular tests.

Fitch Rating confirm Italy at BBB and leaves outlook unchanged also (at negative)

  
Analysis, Economy

Some late news from after hours in the US Friday, on Italian sovereign debt ratings from Fitch.

  • Fitch affirmed Italy’s credit rating unchanged at BBB
  • maintained its negative outlook
Fitch:
  • This week’s political developments reinforce our assessment at the previous review that the government was unlikely to see out a full term and there is an increasing risk of an early election from the second half of this year
  • There are downside risks to the fiscal outlook should a future government opt to disengage from EU fiscal rules and be more willing to risk financial market instability
That’s a bit of respite for Italy as political instability rises, with the likelihood of early elections soon. Prime Minister Giuseppe Conte is facing a no-confidence motion in Parliament from coalition member Matteo Salvini. Italian instability is a negative for the euro, this lifting it at least to some extent.
Salvini:
Some late news from after hours in the US Friday, on Italian sovereign debt ratings from Fitch.

IMF issues annual report on China

  
Analysis, Economy
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Risks tilted to the downside amid trade uncertainty

The IMF is out with its annual report on China. They say:

  • risks are tilted to the downside amid trade uncertainty
  • China should maintain flexible yuan  if tariffs rise
  • China could intervene to support one in adverse scenario
  • China GDP growth could slowed to 4% by 2030
  • escalating trade tensions could warrant China stimulus
  • China augmented government debt to top 100% of GDP in 2024
  • The yuan is not significantly overvalued or undervalued. In line with fundamentals
  • IMF has been pressing China for more exchange-rate flexibility, less intervention in currency markets
  • China should open up more sectors to foreign competition to put its economy in best position to deal with trade pressures
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