Thursday , November 14 2019
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Tag Archives: Europe

Swiss National Bank’s Monetary Racket, US Stock Holdings & the Wild Ride of its Own Shares

We’ll also look at its garbage pile at the bottom. These folks don’t even pretend to be stock pickers. They buy and let it stick till it falls off on its own. The Swiss National Bank, which filed its disclosure of US stock holdings today with the SEC, has figured out the best money racket of all times. It works because currency speculators are eagerly gobbling up Swiss francs. In January 2015, the SNB started to print Swiss francs ostensibly to depress the value of the CHF, a tiny...

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Negative Yielding Bonds Turn into Punishment Bonds

After peak negative-yield-absurdity in August, bond prices fell – the “bond bloodbath” – and the mountain of bonds with negative yields has plunged by $5 Trillion, or by 30%, despite rate cuts. The 10-year US Treasury yield rose on Friday to 1.94%. That’s still very low, and below inflation as measured by core CPI (2.4%), but it’s up nearly 50 basis points from the lows at the end of August. During this time, the Fed has cut its interest rate target twice, by a total of 50 basis...

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Months After Takeover, European Supermarket Giant Dia Discloses Huge Losses, Plunging Revenues, Soaring Debt

Russian billionaire rues the day he bought it. “We should have been more cautious and done our due diligence better.” By Nick Corbishley, for WOLF STREET: Dia, once one of Europe’s largest supermarket chains but now struggling with cascading losses and a near-bankruptcy experience, has just disclosed its results for the first three quarters of 2019. The firm racked up even more losses (€504 million) in the first nine months of this year than it did in the whole of last year (€365...

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U.S. Barely Cleanest Dirty Shirt Among Manufacturing Giants

US & China come up with conflicting data, Germany in crisis, Japan has “excessive” downside risks, South Korea faces “headwinds from all sides.” Manufacturing in the US is growing at crawl-speed or is actually declining, depending on who the beholder is. China appears to be on a similar track, with manufacturing export orders in particular trouble. But the other manufacturing giants – Germany, Japan, and South Korea – are not so lucky. On Friday, two major beholders released their...

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Redemptions Rip Through UK Equity Funds as Fallout from Woodford Collapse Grows

In funds with a liquidity mismatch, the First-Mover Advantage is huge, as Woodford’s investors found out. By Nick Corbishley, for WOLF STREET: On Oct 15., it was announced that Neil Woodford’s flagship Equity Income fund (WEI), which has blocked redemptions since June, would be closed for good. And signs are emerging that the problems that bedeviled WEI may be spreading to the wider UK equity fund sector. Across all UK-domiciled funds, investors pulled £2.1 billion in September taking...

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The Crisis in Catalonia & What I Saw in Our Neighborhood in Barcelona

As separatist region is rocked by violence, businesses sound alarm. By Nick Corbishley, for WOLF STREET: Two of Catalonia’s biggest business associations, Foment de Treball and Pimec, have called for calm and dialogue after ten days of non-stop political and civil unrest in the separatist region of Spain. At a gathering of almost 450 Catalan business people and executives on Wednesday, the two associations called for a political solution to what they described as “the grave conflict we...

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Just Weeks After the Collapse of Thomas Cook, Spain Launches First Bailout of its Huge Tourism Industry

“An unforeseen crisis.” Other headwinds intensify too. By Nick Corbishley, for WOLF STREET: Less than a month after the collapse of Thomas Cook, the global travel & vacation-giant and airline operator, the Spanish government has unveiled an €800 million taxpayer-funded bailout of its all-important tourism industry. During the presentation of the new 13-point royal decree, Spain’s vice-president Carmen Calvo described the measures as a “reasonable response to an unforeseen crisis” —...

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Global Air Freight Sinks into Longest Recession since 2008

US-China trade war, falling business confidence, slowdown in China, German exports, and new: the temporary shutdown of Hong Kong’s airport, the largest cargo hub in the world. Demand for global air freight, domestic and international, as measured in freight tonne kilometers (FTKs), fell by 3.9% in August compared to August last year, the 10th month in a row of year-over-year declines, the longest such period of declines since 2008 during the Global Financial Crisis, according to the...

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US Dollar Status as Global Reserve Currency Slides

Chinese Renminbi struggles forward in slow micro-steps. If the US dollar loses its hegemony as a global reserve currency, it would be a sea change globally, and specifically for the US economy. Today, we got the next installment in that saga, via the IMF’s quarterly COFER data on foreign exchange reserves. Total global foreign exchange reserves in all currencies ticked up 1.1% from the first quarter, to $11.7 trillion. US-dollar-denominated exchange reserves rose only 0.7% to $6.79...

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Metro Bank Teeters after Bond Sale Fails. Shares Collapsed 95%

Hedge-fund manager Steven Cohen and Michael Bloomberg are among those ruing the day they bought the crushed shares of the UK bank touted as a “bargain.” By Nick Corbishley, for WOLF STREET: Even by its own recent standards, Metro Bank has had a torrid week. On Monday, shares of the British retail bank tumbled 5%, on Tuesday, 25%, on Wednesday, 5%, and on Thursday, 4.5%, before staging a brief comeback in the final hours of trading on Friday, to end the week 35% lower. By Friday...

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