The occasion for this specific analysis is the recent statement about the main areas of concern of the Financial Stability Board (FSB) that was issued by the head of the global supervisor Klaas Knot. In particular, this statement focused on vulnerabilities in non-banking financial intermediation (NBFI), the so-called “shadow lenders”. More specifically, “Vulnerabilities in non-banking …
Category: Market Analyses
Analyses and articles for world financial markets
Global markets: After the plunge – The role of the carry trade, shorts and the hit to hedge funds
The numbers flashing on the stock screens on Monday were shocking. Whether Monday’s wild swings mark the final blowout of a global sell-off that began to develop last week or mark the beginning of a protracted downturn is impossible to know. Trust Economics is predicting a major crash next fall. The Nikkei on Monday posted …
The REPO Act poses a problem to US Geopolitical Hegemony
In the wake of Russia’s military operation in Ukraine in 2022, the US government launched its most aggressive sanctions campaign ever. The US government and its allies have frozen about $300 billion of the Russian central bank’s accumulated foreign reserves. It was a stunning display of the political risk associated with the dollar and US …
De-dollarization is constantly being strengthened
The dollar is still a primary currency for spending, liquidity and foreign exchange. But it’s no longer the top savings asset. Gold (now a Tier-1 asset…) will continue to be a high-value reserve (ie, it holds its wealth) better than any amount of money. In any case, the dollar and US Treasuries are now quantitatively …
At extreme levels of market valuations (bubbles), everything portends a crash
Lately there has been growing concern over the valuation of the US stock market, warning that it is currently overvalued. This analysis delves into the reasons behind this rating and explores the various factors that contribute to the perceived overvaluation. By trying to understand the basics of what “overvalued” means, we shed light on the …
The consumer, the average citizen, continues to suffer…
In April, former US Treasury Secretary Larry Summers drew laughs from investors when he said the Fed’s next move might be tightening, not easing. In other words, Mr. Summers is predicting another rate hike, which could cause the markets to… explode. And the truth is that few traders are still laughing. Of course, the likelihood …
Nvidia one step away from becoming the most valuable company in the world
Investors on Wall Street welcomed Nvidia with a “rally” of more than 9%, as a result of strong demand for the stock after the new, spectacular financial results. Currently, the market capitalization exceeds 2.5 trillion. dollars (passed the $1 trillion mark on 5/30/2023) and ranks Nvidia as the third largest company on Wall Street and …
Slowly and steadily cracks are appearing in the Financial System
The FED raised interest rates above 5%, yet the US economy is not broken. The bond yield curve has been inverted since 2022 and has remained inverted ever since. The lags looked short, with the US economy only briefly causing concern in 2023 when there was a consensus among market participants that a recession would …
From New York and London to Tokyo… all indices at all-time highs
From New York to London to Tokyo, there is one commonality among global stock markets: record highs. Of the world’s 20 largest stock markets, 14 have reached all-time highs recently. The MSCI ACWI index, which tracks developed and emerging markets, is setting one record after another. In the US, the S&P 500 and Nasdaq 100 …
How far or close are we from a painful crash?
The economic cycle we are experiencing is very different from most economic cycles we have experienced to date in our lifetimes. This means that we are in an income-led expansion, but also in an income-led consumption expansion, meaning that citizens in the US are enjoying wage growth of 6% per year, with personal consumption spending …