Market Commentary

Something Wicked This Way Comes?

Something Wicked This Way Comes?

The passing of Jack Bogle this week leaves the world of investing much poorer, but his career has benefitted investors enormously (nearly $1 trillion) according to some. He eschewed the riches that most on Wall Street seem to covet and genuinely helped millions of investors get cheap access to capital markets returns. This post sums up what many of us owe to him; he has truly left an enormous legacy, which we should all try to keep alive. “Success is not final, failure is not fatal: it is the courage to continue that counts.” – Winston Churchill

Read more
A Brief History of Time (and Puts)

A Brief History of Time (and Puts)

As of Friday last week, World Equities had lost $15 trillion in value (-7%), with almost two thirds of Global stocks now in “Bear market” territory (i.e. down 20% or more). In Wall Street, talk is already turning to the possibility of the “Powell Put” being in play – the idea that, should markets fall below a certain point, the Fed will ride to the rescue with rate cuts/money printing/buying assets directly etc. or whatever else is deemed necessary to ensure that asset prices don’t fall. As we pointed out a couple of weeks ago, asset prices appear to be the only relevant metric in policy decision-making – and don’t the markets know it!

Read more
Venezuela slides into the abyss

Venezuela slides into the abyss

The Venezuelan economy is in freefall. In the last 5 years, their economy has shrunk by 50%, amidst shortages in medicines, food, and other material basics, inflation is over 500,000%, (and the IMF projects it to be 1 million percent by year-end). According to U.N. estimates, nearly 2.3 million Venezuelans have left the country over the last 2-3 years (about 7% of the population). The currency has collapsed too, as confidence implodes, with some wags now suggesting that the State TV broadcaster drops their version of “Who wants to be a millionaire” as even the jackpot is now worthless – 1 million Bolivars is currently worth about £3.09. In mid-August, President Maduro announced a 95% devaluation

Read more
Turkey Being Roasted

Turkey Being Roasted

“I can calculate the motion of heavenly bodies, but not the madness of people”. – attributed to Sir Isaac Newton.”To every action there is always opposed an equal reaction”. Newton’s Third Law of Motion August is supposed to be a quiet month, as dealers go off to the beach, but it is not turning out that way so far – Turkey has seen a nasty decline in both its currency (the Lira) and it’s asset markets as investors look to get out at almost any price. It seems that it is becoming increasingly difficult to distinguish between the Lira and Bitcoin on volatility terms and is in danger of starting a self-reinforcing bout of contagion in global asset markets. How did this happen and what does it mean for investors ?

Read more