Posts

Shorting equities once again

We are approaching the end of a very long tunnel. Volatility has re-emerged but is not anything like what we saw in March. See daily chart of S&P500 and 20 day historical volatility below.     Historically, the Fed has always added stimulus when equities started to roll-over - it’s why they are in...

The US gambles with the dollar

Jerome Powell's recent announcement of the change in Fed policy to target inflation at 2% on average was not a surprise. Powell has previously tried to communicate that the Fed is indifferent between missing on the upside as they are missing on the downside. This policy statement tries to build on those previous statements....

MMT Revisited: National Capital Investment Accounts

This article aims to offer a solution to the weakness in consumption, productivity deficit and debt burden of the country. No small task. The answer I offer to our ills is to create an investment account for every voting member of society (i.e. they must vote, not simply be registered to vote). That investment...

Hand in hand they blindly go

Forefront in my mind over the next month is central bank policy and the narrative from Powell and other FOMC members from now up to and including their next meeting in September. Yields rose last week in reaction to signs of rising inflation. That then pushed down on the price of gold. The risk...

Another gold liquidation

Yesterday saw a large sell off in gold and silver. Reasons for the fall were abound including rising inflation, increasing yields and the Russian vaccine approval. All of them valid reasons why gold and silver would fall after sitting in overbought territory for so long. But what has changed? The reason I hold gold...

Looking ahead

LWE and SKI have held very similar positioning over the last couple of weeks. That reflects my view that the short and medium term opportunities are aligned. However, I expect as the Summer moves on we will see increased volatility due to fiscal incentives being reduced and the momentum trade on gold getting more...

Correlations indicate a new phase

When equities sold off in March the risk-off mode also took down gold and strengthened the US dollar. It was clear that investors were not positioned for such a downturn as they were forced to liquidate positions. Most recently however this correlation between equities and assets has broken down. As equities fell toward the...

Euro nations coming together

Positive news for the Euro as after many days of negotiations EU leaders finally agree to 390 bn Euro of grants alongside loans of 360 bn Euro. Whilst EURUSD has gained to the high end of its recent range, the Euro has not outperformed other currencies than the dollar. I don’t think this level...

High stakes poker

Have you had your free money yet? As a resident of Jersey, I've just been told I will receive £100 by September to spend in Jersey. Of course, it's not only me, every man, woman and child will receive a £100 by voucher or pre-paid card with an expected time limit of November before...

Positive Euro positioning

Darwinex pivot First, a word on the Darwinex pivot changing their fee structure from commissions to performance and management fee. Overall I support the change since it allows Darwinex to focus on growing AUM and performance instead of encouraging trading turnover. What’s good for investors in all 3 Stokes Bay Darwins is that there...