Cowards and Cows

Thu, 2017/06/15 - 10:00am | Your editor

On a day when this investor feels like a coward, let's start with cows. How now brown cow, grazing in the green, green grass. Brian Bellhouse, the Oxford Prof made a fortune with a DIY PowerJect syringe replacement injections using compressed gas to avoid having to pierce the skin. He was killed during a country walk in East Sussex by stampeding cows this week.

Qatar, boycotted by its neighbors, settled a herd of cows in a barn to provide milk to the population, hitherto supplied from across its borders in Bahrain and Saudi Arabia. I suspect they will live in air-conditioned barns as dairy herds do in Israel.

A Norfolk vegetarian who inherited a beef farm donated his 59-cow herd to an animal sanctuary rather than let them be slaughtered.

The Narendra Modi rigorous Hindu government has hit India's show industry, mostly manned by lower castes, because they cannot get leather. Workers are being fired for the sake of the the sacred cows.

 

U.S. stock futures dipped and Asian and European shares were on the defensive on Thursday after media reports that Pres. Donald Trump is being investigated for possible obstruction of justice by special investigator Robert S. Mueller. The counsel has contacted 3 present and former intelligence officials to question them regarding contacts between the Trump campaign and Russians or others who may have been meddling in the US election. This opens up a new can of worms.

I worry about the Saudi-Qatari standoff as it cannot but mean major trouble ahead.

And Theresa May, the other top leader of the English-speaking world, is still not assured the votes of the Democratic Union MPs from Northern Ireland. (Apologies to reader FBN and others who may have found my references to the Orange Order offensive, and who think the Ulster Protestants should be called Scots-Irish. I was reflecting on a building, not politically correct at the time, to say nothing for now.)

 

More from Spain, Mexico, Israel, India, Australia, Britain, the USA, Bermuda, Greece, Cyprus, Canada, Finland, Poland, and a few other places.

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May Day for Brexit?

Wed, 2017/06/14 - 7:11am | Your editor

In college, I attended High Holy Day services with my childless Boston aunt and uncle who lived in Allston rather than at the university. They were not very religious, running a German delicatessen selling non-kosher food to fellow-European refugees, so the Jewish New Year and Day of Atonement services were not in a synagogue. They were held in the Orange Lodge in Allston, a relic of Protestant Irish immigrants to Boston who wanted to continue their harrassment of the Fenians in the New World.

By then the Northern Irish had become a tiny minority as Boston's Irish Catholics took political power. During the services when I got bored I examined the stain glass windows, showing the Battle of the Boyne, when William of Orange (husband of Mary) defeated the ragged Irish rebels and their church, represented by something like the College of Cardinals in full panoply and miters. There also was a stained glass window showing the Orange-men marching with banners and halbards through the Irish slums and trampling the inhabitants.

These symbols had gone date well before the Jews hired the Orange Hall, but they spring to mind as the British Conservatives join with the relics of the Orange Order to continue to govern during the Brexit crisis. The legacy of William of Orange and the Rev. Ian Paisley is devisive and dangerous.

 

Yesterday David Jones and George Bridges, two of the 4 British cabinet members working on Brexit, resigned over the complexities of the new narrow parlimentary majority dependent on the Orangemen. They are frustrated by the failure of Prime Minister Theresa May to keep the Department for Exiting the European Union, or DEXEU, informed of what she is up to in her talks with the Northern Irish members and also with EU leaders.

 

French Pres. Emmanuel Macron and German Finance Minister Wolfgang Schaueble today called on Mrs May to halt the drive to remove Britain from the EU before negotiations formally begin next week, saying once talks start it will become harder to reverse any UK move to exit. Her alliance is a further irritant. I wrote that she might be a secret remain supporter last autumn (following a Canadian academic who suggested she was a Trojan Horse).

 

This morning Bloomberg writes that “Doubts appear to be growing in the UK over its government's tough stance and ability to handle the withdrawal successfully after last week's election.” So there may be a good outcome, the one my British relatives all support, starting with my husband.

 

More for paid subscribers follows from Japan, Britain, Finland, New Zealand, Mexico, Chile, Argentina, China, Hong Kong, Canada, Australia, Germany, the US, the Dutch Antilles, and a few other places. Today is deal-making day.

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Stock Sale

Tue, 2017/06/13 - 10:21am | Your editor

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Copying the Enemy

Tue, 2017/06/13 - 8:34am | Your editor

From the Algarve I am pondering how both Theresa May and Donald Trump are becoming like their enemies. Mrs May has to deal with horrible terrorists, and yet she is allying herself with horrible terrorists from Northern Ireland to keep power. These Ulstermen have blood on their hands bigtime just as their IRA opponents do.

Trump seems to be involved in trivia rather than focusing on the largest current challenge to US security, from nuclearized North Korea. Pres. Trump's televised full cabinet meeting involved everyone from himself on down praising his administration's work to date. This reminded the Frankurter Algemeine Zeitung today of nothing so much as how the North Korea regime praised Kim Jung-Un for more talent at governing than anyone else.

Is Washington turning into the Hermit Kingdom just as London is turning into Belfast?

Today we have news from Britain, India, the USA, Israel, Bermuda, Spain, Switzerland, Denmark, Canada, Japan, and Panama. Read more »

CRISIS1

Mon, 2017/06/12 - 5:30am | Your editor

To view a newsletter, pre-subscribers should head for the following website, which is free: http://www.talkmarkets.com/content/global-markets/may-hem-sterling-collapses?post=138246&uid=4662.

 

*I have no idea if Trump is suicidal or not but his decision to stand up to Comey while under oath reeks of Mayism. I imagine that there has to be a tape, or otherwise Trump is toast.

*Our pal Adrian Ash wrote to explain the gold sell-off surprise after Theresa May failed to win a Parliamentary majority. The editor of www.BullionVault.com said the UK investors were selling and taking profits as gold rose in sterling terms. Volume in British trading was 4 times that of anormal Friday and the price in sterling of the yellow metal hit £1007 after it opened the week at £993.

Also unexpectedly, the UK index rose, mainly because the FTSE 100 is dominated by companies which operate globally, and are able to offset the terrors of a “hung” parliament thanks to currency factors. The exceptions were outfits like BT, the homeland telco, which mostly earn sterling. And even though oil stocks are under bearish pressure worldwide now, UK oil companies are up because they are dollar-earners.

 

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May-hem

Fri, 2017/06/09 - 6:59am | Your editor

Politics is a risky business and Theresa May's poll gamble has failed. I got some flak yesterday for reporting the odds offered on a May victory by Ladbrokes bookies because early polls—before the two terrorist attacks and her blunders over debates and taxation of senior citizens—had put May 20% ahead of lefty Labour leader Jeremy Corbyn. But of course t moves by the betting public in Britain is a good way to predict how people will vote.

I expect the Tories will bring out their long knives. The ousted former PM David Cameron was made the scapegoat for an unnecessary poll over Brexit; how much more venom will be generated by the party which had a solid majority before May opted to go to the country well before it was necessary under the rules.
May may have to walk the plank, in which case a coalition government including some wiBremain elements like the Northern Irish Democratic Union Party, which wants to keep links with Ireland, the Liberal Democrats, the Greens, and the solo independent, and the solo Independent will hold the key to power. They can swing either way, to Labour or the Conservatives. But whichever way they move, May may not survive as the exemplar of a “hard” brexit.

As I write she is meeting with the Queen to discuss creating a minority government with support from the DUP, which is potentially a blow to the whole Brexit project. A border running between Ireland and Northern Ireland is a blow to both economies and peace between them.

The Frankfurter Allgemeine Zeitung tried to figure out what the UK polls mean for Brexit. It quoted Michael Hewson of CMC Markets in London: “The Scottish Nationalists and Liberal Democrats want to stay in the European Union. So there is a possibility that Brexit may never happen at all!”

As for sterling, Stephen Gallo at Bank of Montreal told the Financial Times that Brexit is "factor number one" for determining the pound's near-term direction. A minority Conservative government implies a "softer Brexit", he adds, a scenario that points to a firmer pound. Today in Asia trading, however, the pound was pounded, because markets hate uncertaity.

 

There is news today from India, Britain, Israeli, Australia, Canada, Germany, Spain, Sweden, Hong Kong, Mexico and a few other places like Nevada. Monday's blog will be from Portugal.

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UK Election Day

Thu, 2017/06/08 - 2:28pm | Your editor

It is way too early to talk about the UK election results, or what the Fed will do, so here is some local color. Ladbrokes, a local bookie, is offering new punters 20 to 1 odds on a Theresa May victory but you will collect not in cash, but in future bets. You can also order a victory hamper with champagne and rosettes of the appropriate color (red for Labour; blue of Tories) and if your constituency votes right it will be delivered and billed. If your fave loses they just cancel.

We went to the Old Vic last night with my in-laws to see Woyzeck starring John Boyega, an Afro-Brit whose actor career began with their son, Joe Cornish, who hired Boyega to play Moses in his cult sci-fi film, Attack the Block. Joe also taught John, a vicar's son from a London suburb, how to audition and how to handle direction. Now John is a Star Wars star, but he is almost family for us.

Apart from the acting, which was terrific, this was a terrible Woyzeck, set in Berlin during the Cold War, and full of modern quirks like a hatred for drug trials and soap powder, and a plea for working class solidarity and anti-war agita.

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Harvard Yard Sale

Wed, 2017/06/07 - 6:30am | Your editor

The Road Warrior is reporting to her subscribers from a patched-together email system because our London fiberoptic conversion has killed both our phone and Internet systems. It is probably not related to the terrorist attacks coming out of this neighborhood but just to incompetence by the people doing the tech, who are coming tomorrow to set things to rights.

 

Road Warrior Note 2: two of my teenaged grandchildren have just been given learner driver permits and are now a threat on the roads of Cleveland. You have been warned. By the time they are fully grown chances are that cars will drive themselves even in Ohio.

 

Tomorrow Britons vote and what looked like a slam-dunk for Theresa May has turned into a potential rout. It turns out that she is just as inexperienced at governing as her US counterpart, with whom she rushed to bond after he was elected. Like Trump, May only trusts a small and inexperienced team of advisors, and like him she cuts funding for ideological reasons which hurts her chances of winning future elections. In her case the funding cut was for police to investigate potential terror attacks, during her 6 years as head of the UK home office. In his case it is cuts in Medicaid which helped his own supporter base.

 

My poor university has put on the market its New Zealand dairy farmand other real estate from its portfolio, writing off investments that at one point topped $4 bn at a substantial discount from what the land cost. The Wall Street Journal headlined its article this morning “Harvard Yard Sale”.

 

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Qatar in the Gutter

Mon, 2017/06/05 - 12:16pm | Your editor

Five Arab countries including Saudi Arabia, the Emirates, and Egypt have cut diplomatic ties and close their border with oil- and gas-rich Qatar, cutting air, sea, and land links and ordered their citizens to leave the country. The impact will hit everything from challenger Qatar Airways to supply of dairy milk to Qatar from Saudi Arabia. The US has a military base in Qatar used among other things to protect the Gulf from Iran.

The Saudis claim that Doha destabilizes the region by backing terrorist groups like Al-Qaeda and ISIS, which Qatar denies. This split within the Sunni Gulf region is unprecedented.

It will almost certainly delay the plan to sell a percentage of Saudi Aramco on global markets. Qatari bond yields rose 20 basis points and its stock market fell 7% today.

The Gulf upheaval may wind up delaying another Federal Reserve rise in interest rates. Lower bond yields mean “a reduced opportunity cost of holding gold and greater motivation for income funds to allocate something to it,” according to Tom Kendall at ICBC Standard Bank, quoted by Adrian Ash of bullionvault.com, our former advertiser.

Gold is likely to breach its 6 year downtrend in US$s today, at $1290, as it already has broken higher in sterling after the London Bridge bombing and in euros. If Theresa May fails to win the parliamentary election Thursday all bets are off. And if she continues to threaten to walk out over the talks with the European Union over Brexit there is more trouble ahead.

 

 

More for paid subscribers follows from India, Israel, Switzerland, Australia, Argentina, Brazil, Canada, Cuba, Mexico, Britain, Chile, Colombia, Portugal, Germany, Panama, the Dutch Antilles, Hong Kong, and a few other places. We start with notes about money, a favorite subject.

 

I fly away to London today hitting the East End rather than chaotic Heathrow, as we are heading for City Airport. I had no idea there would be a terrorist attack in my area over the weekend and have no idea how things will go.

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Tables Posted

Sun, 2017/06/04 - 10:47am | Your editor

Today we have horrible news of another terrorist attack in London, hitting the East End area where we tend to hang out. Our family are all fine, but it puts a dampener on our future trips to the Borough Market and the Old Vic, and the area around London Bridge and Brick Lane where we like to eat Indian food.

Yet I have to confess that I am speculating about how the spate of crimes by Muslim zealots (during Ramadan, when they are supposed to focus on repentence!) will affect the parliamentary poll to take place Thursday where the Tories are backing cuts in immigration from the European Union as part of their Brexit program.

Today I posted the last performance tables before we fly off tomorrow, and they are impressive for one simple reason: the dollar is at a 7-month low against most major global currencies. Since we tend not to hedge exchange rates, in order to increase the diversification of our portfolios, it boosts performance.