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Stability In Renminbi Offers An XXL Profit Opportunity
- Currencies can move and they move significantly when they have been sailing in calm waters for extended periods of time - just like the Chinese Renminbi now.
- A reasonable bearish position on the Renminbi will be a great way to hedge out the uncertainty of outcomes with respect to how the Chinese economic miracle "unwinds".
- Mark Hart who came to prominence after shorting the "sub-prime thing" in 2007 is applying his view on China via options on the Renminbi.
- The return potential offered by options on the Renminbi is HUGE because volatility is grossly underpriced.
Are We Sitting Precariously Close To A Repeat Of The 1997 Asian Tiger Crisis?
- Singapore is a very fragile economy highly dependent on dependent on the cost of capital staying low or at least rising very slowly over the coming years.
- Singapore property prices have advanced some 50% since the start of 2006 and most of the price movement occurred from 2009 to 2013 (a period of an infinite QE program).
- When Fed rates return to their historical averages, Singapore’s housing market will discover a double whammy of underwater homes and unaffordable interest payments.
- Singapore is not alone in its fragility to rising interest rates. There is a region-wide emerging markets bubble.
The 'Sexy' Facts About Debt Markets
Sat, Oct. 4 • 3 Comments
- Global debt levels have swollen to 200 year highs.
- Debt ratios in the developed economies have grown by 20 percentage points to 275% of GDP since the beginning of the GFC.
- In the emerging economies, debt ratios have grown with the same pace to 175% of GDP.
- The Bank of International Settlements warned that global debt levels could trigger another Lehman-style crisis.
Round 2 For The Japanese Yen
- The second round of yen weakness is now occurring and there appears to be an identifiable catalyst.
- The catalyst for the next wave of yen weakness is the most recent release of Japanese economic data which was worse than expected.
- The longer Abe’s policies fail to deliver the hoped-for economic results, the more intensely they will be implemented.
- Expect more yen weakness over the coming year as the exchange rate heads back towards the pre-2008 levels.
The Bubble Is In Cash, Not Stocks
Fri, Sep. 5 • 25 Comments
- High cash levels equate to a huge pool of marginal buyers, rather than sellers, for stocks and other “real” assets.
- Cash levels more or less the highest in a generation.
- However one looks at it – cash is still a way more popular investment alternative than stocks.
- If consumer confidence is anything to go by, we are probably only half way through the current bull market.
- I think to a large extent the rise of the stock market in the past 5 years has been driven by corporate buybacks.
Coffee Mugs, Human Organs, And AK-47s
Fri, Aug. 1 • 6 Comments
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