Wazua
»
Investor
»
Economy
»
Investors Lounge
Rank: Veteran Joined: 9/18/2014 Posts: 1,127
|
lochaz-index wrote:The naira has been through one tough roller coaster. The official devaluation downgraded it from 190 to 300+ vs the dollar in four months(June through to September) whilst the black market rate is still north of 400 having clocked a gruesome 436 about two weeks ago. Having extended a zero interest loan to Nigeria, the IMF is pressing for further debasement and a fuel hike. http://www.vanguardngr.c...itions-tough-handle-fg/
KE has taken two precautionary loans in two years, will it find itself in the same predicament in one years time? African currencies are having a torrid time especially the ones with fixed pegs. The Egyptian pound is falling like a rock and is still expected to fall some more. Quote:Abdel Aal expects the CBE to follow the controlled flotation and drop the Egyptian pound’s value down against the US dollar by 30%, either once or twice. More fx expenditures than revenue means the CBE doesn't have the ammo to float the currency despite the IMF's insistence. The next 18-24 months are promising to be excruciating for developing economies and their currencies more so the African ones. The fx market is a reliable pulse reader of coming moves in the financial world. Recent actions imply some heavy weight action is on the way probably in the bond market. http://www.dailynewsegyp...cial-request-borrow-imf/The main purpose of the stock market is to make fools of as many people as possible.
|
|
|
Rank: Chief Joined: 8/4/2010 Posts: 8,977
|
How will euro banks survive the looming strong USD without breaking the entire system!? Bail-in instead of bailouts will see the commoners riot all over euroland. This is going to be tough to watch. $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
|
|
|
Rank: Veteran Joined: 9/18/2014 Posts: 1,127
|
The confessions/admissions of failure keep streaming in from all corners. This is a nice read. Quote:The Stability and Growth Pact has more or less failed. Market discipline is done away with by ECB interventions. So there is no fiscal control mechanism from markets or politics. This has all the elements to bring disaster for monetary union. http://www.telegraph.co....lapse-warns-ecb-prophet/The main purpose of the stock market is to make fools of as many people as possible.
|
|
|
Rank: Veteran Joined: 9/18/2014 Posts: 1,127
|
The curious case of Japan...record foreign outflows, strong yen even vs the dollar, dropping CPI, weakening exports, bigger QE programs (including buying of stocks) and a falling stock market (investors strong arming the BoJ). Quote:The $US59 billion outflow, bigger than in any of 33 large financial markets tracked by Bloomberg, helps explain why unprecedented exchange-traded fund purchases by the Bank of Japan (BOJ) have failed to prevent a 12 per cent slide in Tokyo's Topix index this year. With overseas funds pulling out faster than the BOJ can buy, some of the world's biggest investors say there's little hope for a market revival anytime soon. "Japan is now in a difficult position when it comes to foreign investment," said Yoshinori Shigemi, a global market strategist at JPMorgan Asset Management, which oversees about $US1.6 trillion. High-up on Shigemi's list of concerns is the yen, which has advanced 16 per cent against the dollar for the biggest gain among major Asian currencies this year. That's bad news for Japan's export-sensitive Topix, where per-share earnings have dropped about 18 per cent since September 2015, data shows. Currency strength is also undermining the effectiveness of Abenomics, a key driver of foreign inflows in 2013. The government's prescription of massive monetary stimulus, increased fiscal spending and structural reform has so far failed to spur lasting growth or get the country anywhere near its 2 per cent inflation target. Consumer prices fell for the fifth straight month in August, while households cut spending by the most since March Read more: http://www.afr.com/marke...18-gs5fz0#ixzz4NY6vvv6Y
Being a net exporter of capital makes Japan a peculiar species. You have to pity kuroda with his brave attempts to crush the yen and kickstart inflation. The main purpose of the stock market is to make fools of as many people as possible.
|
|
|
Rank: Veteran Joined: 9/18/2014 Posts: 1,127
|
Not only is the average investor aka wanjiku fidgety about investing in any market but the 'pros' aka fund managers are also having their own version of deer in head lights moment by maintaining huge cash positions. The 'perceived' (but very real) risk levels by these fund managers (going by their cash levels) at the moment are bigger than they were during and after the collapse of Lehman, Grexit fears, debt ceiling concerns or the immediate aftermath of the Brexit vote. http://www.bloomberg.com...els-not-seen-since-9-11
Meanwhile, in Italy, savers - faced with NIRP and shaky banks - are opting to park their cash with the local post office (BancoPosta) despite it not having a banking license. It's anyone's guess how much has already been stashed in mattresses and safes. The main purpose of the stock market is to make fools of as many people as possible.
|
|
|
Rank: Veteran Joined: 9/18/2014 Posts: 1,127
|
Yuan headed to GFC levels yet there is no market reaction! In the meantime, China has massaged its GDP numbers to read 6.7% for one too many quarters. The main purpose of the stock market is to make fools of as many people as possible.
|
|
|
Rank: Chief Joined: 8/4/2010 Posts: 8,977
|
lochaz-index wrote:Yuan headed to GFC levels yet there is no market reaction! In the meantime, China has massaged its GDP numbers to read 6.7% for one too many quarters. Every CB is staring at the deflation monster and sweating. Who will fall first? Whoever that CB will be, the outcome will send a nasty shockwave into the system. While fate decides that outcome, currency devaluation is the only way out. USD will continue to gain as all debtors run around trying to pay down their debt. This is spiking the demand for the scarce USD.
Next stop, helicopter money as the bulldozer option to face this ugly deflation monster!$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
|
|
|
Rank: Chief Joined: 1/13/2011 Posts: 5,964
|
hisah wrote:lochaz-index wrote:Yuan headed to GFC levels yet there is no market reaction! In the meantime, China has massaged its GDP numbers to read 6.7% for one too many quarters. Every CB is staring at the deflation monster and sweating. Who will fall first? Whoever that CB will be, the outcome will send a nasty shockwave into the system. While fate decides that outcome, currency devaluation is the only way out. USD will continue to gain as all debtors run around trying to pay down their debt. This is spiking the demand for the scarce USD.
Next stop, helicopter money as the bulldozer option to face this ugly deflation monster! What deflation? Get OPEC to raise inflation and there you have it. December prick the bubbles. Easy  A moderated 6 clip growth or beating nought point growth expectations, choose.
|
|
|
Rank: Chief Joined: 1/13/2011 Posts: 5,964
|
OPEC underwhelms in Nov and it's routing and moat testing, Fed keeps talking up the USD & hike mongering. Otherwise, the discount window is closing. https://www.ft.com/conte...s/markets/feed//product
|
|
|
Rank: Veteran Joined: 9/18/2014 Posts: 1,127
|
lochaz-index wrote:lochaz-index wrote:The naira has been through one tough roller coaster. The official devaluation downgraded it from 190 to 300+ vs the dollar in four months(June through to September) whilst the black market rate is still north of 400 having clocked a gruesome 436 about two weeks ago. Having extended a zero interest loan to Nigeria, the IMF is pressing for further debasement and a fuel hike. http://www.vanguardngr.c...itions-tough-handle-fg/
KE has taken two precautionary loans in two years, will it find itself in the same predicament in one years time? African currencies are having a torrid time especially the ones with fixed pegs. The Egyptian pound is falling like a rock and is still expected to fall some more. Quote:Abdel Aal expects the CBE to follow the controlled flotation and drop the Egyptian pound’s value down against the US dollar by 30%, either once or twice. More fx expenditures than revenue means the CBE doesn't have the ammo to float the currency despite the IMF's insistence. The next 18-24 months are promising to be excruciating for developing economies and their currencies more so the African ones. The fx market is a reliable pulse reader of coming moves in the financial world. Recent actions imply some heavy weight action is on the way probably in the bond market. http://www.dailynewsegyp...ial-request-borrow-imf/ Take 3: at the bottom of the the sovereign bond barrel, Mozambique officially issues an SOS to its creditors. Will it be a soft default via debt restructuring as so desired or an outright default? Either way it has good company in the form of Venezuela. Their debt to GDP ratio is projected to close at 130% by end of 2016. A developed nation can try to juggle this kind of debt, but for a developing economy it is toxic. This has grown from 62.4% in 2014, 53.1% in 2013 and 38.1% in 2011. Ring a bell? KE had better watch out. Things went south in a two year window and now they are in distress. The metical lost 30% vs the dollar in 2015 and a further 70% this year which ballooned their debt. With inflation at a scorching 16.7% (from 2.4% in 2015), the BdM has hiked its rate to circa 23%. http://www.wsj.com/artic...estructuring-1477418742
EA economies and currencies have held their ground quite admirably in 2016, will they manage the same feat? The main purpose of the stock market is to make fools of as many people as possible.
|
|
|
Wazua
»
Investor
»
Economy
»
Investors Lounge
Forum Jump
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.
|