Summary Stability is perceived as something positive in financial markets. However, too much stability breeds complacency and risk leveraging, which results in instability. We are headed to one of those rollercoaster moments. Most people think that financial stability is good. Actually, stability is bad for financial markets. Long periods of stability tend to provoke… Read More We Are Heading Into Another Minsky Moment
China is still one of the fastest growing economies in the world. Even the weakness provoked crackdown on debt should be a long-term positive. E-commerce is still one of the most disruptive sectors in world’s economy, and Alibaba is a giant in this space. The current market rout has brought a severe price decline, and… Read More Alibaba: The Christmas rout brought a risk/reward gift for bold investors
Summary The quantitative tightening and interest rate hikes have had a negative effect on the world economy, except in the US. A further hike would end up putting even more pressure on EM economies. Sooner or later, that will spill over to the US. Financial turbulence is also suggesting that the tightening is going too… Read More The Fed rate decision is a tipping point for the Global economy
Maybe a more suitable title could have been: “Does trend-following being profitable makes sense?” Many traders don’t care about the reasons why they achieve profitable strategies out of trend-following techniques. They don’t want to know. For them, it suffices to keep making money out of them. For me that doesn’t work, I need to understand the… Read More Why does trend-following work?
Photo Credit: PAS China President Trump has been promoting a trade war with China. His defenders argue it is time to rebalance what has been a win-lose trade relationship. Although there are positives in getting cheap goods from China that the trade balance can’t capture, it is true that China’s long growth spree should be… Read More Macro Observations: The trade war doesn’t mean a trade surplus
(Photo credit: James Lee) Presently, the main doubt tormenting me is whether we are already in a long-term bear market or not. Everybody seems to hold the view that we are still some time away from it, and this is, precisely, what worries me. One of the most interesting facts about economic recessions and bear… Read More A Recession is coming… Or is it already here?
(Photo credit: Sankarshan) First of all, we have to get the context for this transaction. IBM (IBM) proposed taking over Red Hat (RHT) in a $30 billion deal. There are some specifics that must be covered. One of the most important is the fact that this is a friendly deal, i.e., the acquired management team is… Read More IBM + Red Hat: Market is assuming a 20% chance of failing the acquisition