JEast

An excellent addition to the value investing literature in addition to the Benjamin Graham fan or a value practitioner's library. Brandes on Value: The Independent Investor Cheers JEast

I'd be embarrassed to belong to a country that feels the need to tractor beam it's market like this. http://i62.tinypic.com/s5vf4g.jpg H/T from a Zero Hedge comment, thought the observation was funny because it is so true.

For historical reference, lectures from the series entitled Current Problems in Security Analysis given September 1946 to February 1947. http://www.wiley.com/legacy/products/subject/finance/bgraham/

And then in Europe, first retail bank goes negative interest rates for German businesses. Retail and business customers with over €500,000 on deposit as of November 1 will earn a “negative interest rate” of 0.25%. http://wolfstreet.com/2014/10/30/the-wrath-of-draghi-first-german-bank-hits-savers-with-negative-interest-rate/

Long ¥en Massacre -- Bank of Japan (BoJ) announced a surprise increase to its quantitative and qualitative easing (QQE) program. I guess this is not a shot across the bow anymore, but first engagement. Other Asian central banks will not site idly on their hands. http://www.moneyobserver.com/news/31-10-2014/japanese-stock-markets-soar-boj-hikes-qe

Another shot across the bow -- Renminbi becomes convertible in Singapore dollars. http://www.ft.com/intl/cms/s/0/64bac520-6a4f-11e0-a464-00144feab49a.html#axzz3HgRJ3qls http://www.nesaranetwork.com/2014/10/27/the-chinese-government-announced-that-the-renminbi-will-become-directly-convertible-with-the-singapore-dollar-effective-tomorrow-morning/

Sweden's central bank cut interest rates to zero to ward off prolonged deflation risk. http://www.reuters.com/article/2014/10/28/sweden-cenbank-idUSL5N0SN1OB20141028

In text books, that is what happens. However, central banks only have the logistics of "pushing" money into the system via the help of others (e.g. profit seeking banks). Currently in the US, those banks are are not pushing much into the system. The former FED Chairman was nicknamed "Helicopter Ben" - and from a logistics point of view, I have always thought that the FED should have rented about 100 chinooks and literally dumped money over the largest 20 metropolitan areas. That would have spurred inflation much quicker!! Alas, the electronic currency is still sitting quietly on a server somewhere with nowhere to go.

Is the commodity cycle turning over? We surely have seen Iron Ore collapse, so what is next? Via Zerohedge, maybe it is copper as the China property cycle is (or) has at least slowed down somewhat. http://i60.tinypic.com/2ed5fyv.jpg http://www.zerohedge.com/news/2014-10-25/coming-collapse-copper

Sending non-inflationary pressures somewhere else (e.g. mini currency wars). http://www.bloomberg.com/video/bloom-says-dollar-to-gain-as-deflation-exported-dELZI7bjThmm~edqvpDCRw.html Maybe inflation is on its way when the talking heads start discussing deflation.

It is my understanding that debt rarely gets repaid, it is just refinanced. The question on the table is what will be the mechanism of the refinance :-\

With this shot across the bow, the Asian wars begin today. http://online.wsj.com/articles/bank-of-korea-cuts-base-rate-1413337198

Maybe the growth has slowed a little (possible a good thing), but maybe the investing side is picking up. Interesting disclosure on investing in a cheap stock. http://www.moneycontrol.com/news/buzzing-stocks/icici-lombard-buys-1979-lakh-sharesgujarat-ind-power_1199114.html

It has been nearly 15-16 years since the TIG saga began and was used as a case of argument by the shorts over the years. Prem and company finally took the pen away from the Dallas office in mid 2000, but the damage had been done. Just another reference point that sometimes an insurance problem hardly ever goes away. However, I had not heard about the Argentina problem and their recalcitrant effort to not pay for the last 14 years. http://www.bloomberg.com/news/2014-10-10/argentina-may-ignore-bond-judge-sanctions-tig-case-shows.html Cheers JEast

Here is something we value folks do not pay very much attention to, 5-year forward looking inflation swap expectations -- but interesting. Roughly stated, for the last 10 years the US break-even point was about 300bp. http://i61.tinypic.com/30vfy15.png In Europe last week, the break-even was below 200bp and dropping. Meaning the consensus is now predicting year/year inflation to be very low indeed.

Under the Thomas Cook India Ltd umbrella, but thought it needed its own thread as part of the Fairfax family. http://www.business-standard.com/article/companies/ikya-group-acquires-canadian-firm-brainhunter-114091800384_1.html

Maybe one should not read too much into the USD/JPY rate too much, but what about the Baht, Ringgit, Rupiah, and AUD since September 1st. I do not believe these currencies are used in the carry trade. On the other side of the pond, latest inflation data out. http://i62.tinypic.com/vhco4p.png Ref: http://www.zerohedge.com/news/2014-09-30/eurozone-inflation-drops-fresh-5-year-low-eurusd-tumbles

Antifragile

As the ¥en approaches the USD/JPY of 110, I believe we have entered a new phase. A new chapter in the sense, that (though they should) other Asian countries will not just sit by and do nothing. They too will start to join the fight to keep exports up and start exporting non-inflationary impulses across the seas with their currency lowering efforts. I know and not to insult, but the whippersnappers are sure to say I see inflation all over the place. You are probably correct from an individual perspective, but not in the fullness of the aggregate. Your extra 5¢ on tomatoes does not compare to Boeing lowering a $300m plane by 5%, or Nissan lowering their retail prices by 7%. Anyway, just thought it time for a new thread on the macro drama. Cheers JEast

Still a little early, but maybe Mr. El Niño is doing his trick again this year with only five named storms for 2014 so far.

The drama continues as we appear to have entered Act 2 with PBOC's new mini-QE prior to a scheduled FED announcement (read as not coincidental). As such, currencies are tanking against the USD. Just a thought. When the USD was deflating, it spread global commodity inflation. If Asian currencies are now deflating in a race to the bottom, will that result in exporting global deflation??

As this thread is about 'musings' or contemplation, are the last few weeks in the macro world a tipping point to use an over used phrase? Started with Bunds at negative rates last year, then the ECB went negative, followed by BOJ going negative a few days ago, and today Swiss National Bank has gone negative. Topsy/Turvy indeed. Currency wars in the race to the bottom anyone?

Maybe FFH will at least get their money back on the inflation hedges. Spain inflation came in at negative 0.5% for the most recent data. http://www.marketwatch.com/story/spains-economy-sinking-as-deflation-deepens-2014-08-28?dist=beforebell

There once was a country that experienced a period of Hyperinflation and they did not like it. So, it appears they may take a shot at deflation and give it a spin. Yields three (3) years out for German debt are in negative territory! http://www.zerohedge.com/news/2014-08-27/greatest-depression-german-yields-now-negative-through-2017 Cheers JEast

non-inflationary stuff? -- Like importing less expensive things people buy at Wal-Mart plus chemicals, cars (Hyundai/Nissan) compared in USD today.