Sunday, 29 November 2015

Stories to be thinking about

A few finance and related stories we need to be thinking about before Monday morning:

Macro matters:

As we get near to the end of the year and thoughts turn to strategy for 2016 this useful annual annual asset class returns over the last decade or so highlighted by @conkers3 is hugely thought-provoking.  Look at both the recent commodities and US equities relative runs...

It is going to be a busy last month of the year as I noted in the latest Financial Orbit Speaks...

And possibly the biggest story in the upcoming week may be the ECB meeting.  The Sunday Times had a clear view on this story as I noted on Twitter earlier: 

Sunday Times business section getting excited: ECB chief plans new €600bn injection Second dose QE may drag down to parity with

And certainly some hope of QE being priced - despite recent political excitements - in Portuguese bonds as shown by this chart via @jsblokland:

Some interesting moves in the Swiss franc on Friday.  Currencies have been volatile at times during 2015 although they have not been as overtly influential as some (including me) thought during the year. An indication of dollar strength shown in the chart below (as well as the big Swiss franc unpegging versus the euro and revaluation):  

As noted by @abarrous ahead of the Spanish elections: 

3 weeks to go before the 20D election in : PP, PSOE and Ciudadanos tied according to metroscopia

The realities of one of the biggest geopolitical debates at the moment via @chinhon:

Useful on some potential longer-term choices for China from Michael Pettis here (I still regard the major rebalancing shorter-term as the shift from a more manufacturing centred economy to a more tertiary driven one - the Pettis piece also includes some useful statistics showing YTD until Q315 7%+ real income growth): 

'Beijing must continuously choose between a rising debt burden, rising unemployment, or rising transfers of wealth from the state sector. All of its policy options boil down to one or more of these three. So far it has mostly chosen the first, but this can only go on until the country reaches debt capacity limits'

Interesting on the silver market here by @smaulgld:

Demand for silver is outpacing supply again – yet the price of silver continues to fall.
Do the dynamics of supply and demand matter any more?
Silver really has struggled in the last year:

I mentioned market breadth in the Saturday wrap here and I thought this was a good write-up

Bit of US farm real estate value history.  Good place to invest over the longer-haul in my view:

Why an Amex was used to buy the world's most expensive painting (link here). 

China allows its citizens to transfer no more than $50,000 out of the country in any year, and using his card could help him get around this limit because he's just paying back American Express or the bank in China who issues his card.

Company-related observations:

The UK's most famous investor has called in an ex FBI agent to help them review whether an investment has a real structural problem (link here):

Phase Five Research, an obscure investment firm, published a blistering report packed with charges of insider dealing and shoddy science. Northwest, it said, was a “house of cards ready to collapse”.

Phase Five claimed Northwest had little chance of ever bringing its still-unproven treatment to market. Instead, Linda Powers, Northwest’s boss, had dragged out its development programme to maintain investor hope — and the company’s share price — while funnelling hundreds of millions in cash and shares out of Northwest into a private company she controls.

Staying with the UK it look as if the Shell-BG deal will be going through:

Chinese and Australian regulators are expected to give their blessing to Shell’s £55bn mega takeover of BG before Christmas, leaving the future of the deal resting squarely in shareholders’ hands.

Talking about big deals this was good...not the greatest indicator of the strength of deals (although I note many are from around the year 2000 where a huge amount of technology madness occurred - for me the Shell-BG deal makes sense for me). 

Useful on European sector performances: 
(h/t @acemaxx)

Should you follow Buffett's filings rather than Buffett per se?  Link here

Via Seeking AlphaAnheuser-Busch InBev is aiming to head off European regulatory concerns over its proposed acquisition of SABMiller by putting the Peroni and Grolsch labels that it would gain up for sale.No price for the brands has yet been indicated, but according to the Sunday Times, the sale would fetch billions of pounds.Potential buyers include Heineken, Molson Coors and Ireland's C&C Group, makers of Bulmers and Magners ciders.

All BHP Billiton actual or interested shareholders should read this from @Timstermac 

And ahead of the FTSE-100 reshuffle, the Sunday Times speculates who may be out (Morrisons, G4S, Meggitt) and who may be in (Provident Financial, Worldpay, DCC). 

And finally...

Don't get too excited about what you read in presentations as noted here:

'The best story though is Ciudad Real Airport - a true financial disaster south of Madrid - an international airport that never took an international flight and for which there was no obvious use.

A while back the BBC reported the airport sold at auction for 10,000 Euro - less than 0.001% of the construction cost.

It seems that Spanish Airports are like regional Chinese apartment buildings - where capital goes to die'.

Have a good week

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