Archives of “european union” tag

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Biggest Bubble Ever? 2017 Recapped In 15 Bullet Points

  
Analysis, Education
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Here are his 15 bullet points that show why in 2017 we may have seen the biggest bubble ever (and why we can’t wait to see what 2018 reveals).

  1. Da Vinci’s “Salvator Mundi” sold for staggering record $450mn
  2. Bitcoin soared 677% from $952 to $7890
  3. BoJ and ECB were bull catalysts, buying $2.0tn of financial assets
  4. Number of global interest rate cuts since Lehman hit: 702
  5. Global debt rose to a record $226tn, record 324% of global GDP
  6. US corporates issued record $1.75tn of bonds
  7. Yield of European HY bonds fell below yield of US Treasuries
  8. Argentina (8 debt defaults in past 200 years) issued 100-year bond
  9. Global stock market cap jumped1 $15.5tn to $85.6tn, record 113% of GDP
  10. S&P500 volatility sank to 50-year low; US Treasury volatility to 30-year low
  11. Market cap of FAANG+BAT grew $1.5tn, more than entire German market cap
  12. 7855 ETFs accounted for 70% of global daily equity volume
  13. The first AI/robot-managed ETF was launched (it’s underperforming)
  14. Big performance winners: ACWI, EM equities, China, Tech, European HY, euro
  15. Big performance losers: US$, Russia, Telecoms, UST 2-year, Turkish lira

As Hartnett summarizes, “2017 was a perfect encapsulation of an 8-year QE-led bull market”

  • Positioning was too bearish for either a bear market or a correction in risk assets.
  • Profits were higher than expected (global EPS jumped 13.4%) this time thanks to a synchronized global PMI recovery.
  • Policy was aggressively easy, as the ECB and BoJ bought a massive $2.0tn of financial assets; fiscal policy also easy (e.g., US federal deficit up $81bn to $666bn).
  • Returns were abnormally high in 2017 (Table 3); corporate bonds and equities soared, but the biggest surprise was stubbornly low government bond yields: thematic leadership of scarce “growth” (e.g. tech stocks), “yield” (e.g., HY, EM and peripheral EU bonds) and “volatility” once again remained the core of the bull.

ALERT : Japan to downgrade fiscal 2016 growth forecast

  
Analysis, Education
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The Japanese government will cut its fiscal 2016 estimate for real economic growth from 1.7% to 0.9%, owing to uncertainty over the global economy and expectations of lower consumption after a tax hike set for the following year was delayed.

The nominal growth forecast will be lowered from 3.1% to 2.2%. The Council on Economic and Fiscal Policy will release the adjusted outlook Wednesday for approval by the cabinet. The new figures will not take into account a stimulus package to be put together as soon as early August.

 The downgrade owes partly to the postponement of a consumption tax hike that had been slated for April 2017. The January estimate had factored in a surge in demand ahead of the increase. With the hike having been pushed back, the government will cut its projection for real consumer spending growth from 2% to around 1%.

Another issue is uncertainty surrounding the global economy, stemming from such factors as the U.K.’s decision to leave the European Union. The yen’s unexpected strength and slowdowns in China and other emerging markets are expected to depress exports and capital spending.

The Japanese government plans to set its real and nominal growth estimates for fiscal 2017 at 1.2% and 2.2%, respectively. It sees growth picking up slightly as the world economy gradually improves.

The Dollar Surge is a Sign of Emerging Market Troubles.

  
  Education
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A strong dollar doesn’t worry me, but a dollar that is THIS strong is a sign that something worrisome could be going on. Historically, substantial year over year increases in the dollar have been consistent with a flight to safety. With the recent European and Emerging Market turmoil we’re seeing huge demand for dollars as a good deal of foreign debt is dollar denominated.  The current surge in the dollar is a sign that there’s a flight to safety occurring and more turmoil in the financial markets than many might presume.

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IMF/EU Bails Out Greece (€110 billion), Papandreou Text, Greek Finance Minister, Riots (Videos)

  
Analysis, Economy, Education
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Greece got a bailout Sunday from the IMF (International Monetary Fund) and EU (European Union).  There will be harsh austerity measures (increase in taxes, lower public sector wages, pension reform), read this Reuters article: Greek cabinet to discuss tough new austerity steps and listen to the Greek Financia Minister speak below.  Specifically on the bailout, WSJ reported that,”Greece reached a historic deal with other euro-zone countries and the International
Monetary Fund for a three-year, €110 billion ($146.5 billion) bailout”. [full WSJ article] The bailout also includes a €10 Billion support fund for banks (Bloomberg).  Find the full text of Papandreou addressing his Cabinet on the bailout here. Below are videos from RussiaToday, Reuters and EUX.tv featuring Greek Finance Minister Giorgos papaconstantinou outlining the austerity package, riot videos and more.


 

Will this be a short financial capitulation event transferred to main street in Greece?

Greece posts bumper $2.4bn budget surplus

  
Analysis, Education
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Here’s something you don’t hear very often. Greece’s public finances are in very healthy shape.

Over the first four months of the year, the Greek treasury boasted a primary budget surplus of €2.4bn. This surplus, which does not include debt interest repayments, came in well above a forecast of just €566m, according to the Greek Ministry of Finance.

After more than 16 months in office, the Syriza government is managing to do exactly what its creditors demand – cut spending and raise taxes. The €2.4bn surplus was also better than the €2.1bn reached over the same period last year.

Athens’ coffers were boosted by better than expected tax revenues, which came in €325m above target at €14.11bn from January to April. Spending meanwhile came in at an impressive €2.28bn below target.

Squabbling over the state of Greece’s primary budget surplus has emerged as the latest sticking point between its international creditors. (more…)

Euro surpasses US dollar as the currency of online casinos

  
Analysis, Education
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At the dawn of the online gambling industry in the 1990s, the U.S. dollar was the major currency accepted in online casinos, but those days are over. The euro has replaced USD and is now the most popular currency. According to the latest research by KeyToCasino, the euro is currently accepted in 79% of all existing online casinos. 

The use of the U.S. dollar changed after the Unlawful Internet Gambling Enforcement Act (UIGEA), legislation regulating online gambling, was passed in the United States. The UIGEA has prohibited all gambling sites from accepting deposits online, forcing U.S.-oriented casinos out of business. At the same time, online gaming business in Europe has flourished, and many online casinos re-oriented their business towards European customers.

It has been 10 years since UIGEA, and many new online casinos have opened throughout this period. They have never considered targeting the U.S. market and never planned to include USD as a currency that is available for deposits. Players from countries with economically unstable currencies were forced to use the euro for their casino transactions.

American currency is not completely out of the gaming business however. It remains the second most popular currency in online casinos, followed by the British pound, which is accepted in 58% of online casinos. However, the overall popularity of Scandinavian currencies, which include the Norwegian krone, Swedish krona, and Danish krone, beats the pound because Norway, Sweden, and Denmark have the highest population ratio when it comes to casino popularity.

Among the other currencies that have become prevalent on online gaming market, there are the South African rand, South Korean won, and Russian ruble. The least popular are the Japanese yen and Chinese yuan. The Australian dollar beats the Canadian dollar in popularity because unlike in Australia, the legality of online casinos in Canada is uncertain, which results in the Canadian dollar not being widely accepted at online casinos.

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