Tag Archives: recession

The slammer got slammed

There is nothing so rewarding as the moment you realise that you get to slam the door on those slamming the door on you. It is an innate feeling that is in the core of all of us. It is more powerful than getting the drop on your boss or CEO with an overwhelming amount of narcissism and the overbearing feeling towards the need of being some dominant / dominatrix figure (at that point they become merely a figurine).

I made several references over the course of 2018 that this was coming, the stronger one in May 2018 (at https://lawlordtobe.com/2018/05/05/milestones/) where I made the reference: “the EU was never about everyone agreeing on everything and the economic setting that requires that to happen at present is also making the dangers of waves that sinks the barge called EU. Now, that seems like an exaggeration, but when you realise that the German anchor is the only one giving stability, you can see the dangers the EU faces and more important, the dangers of no reserves and an utter lack to keep proper budgets in place, a setting now in more danger for the reasons that I gave supported by the economic views of many others. I believe some are downplaying the impact, yet when we realise that EVERY European Union government is downplaying the economic impact (as every nation always wants to look as good as possible, which is a PowerPoint setting of the human ago) we get a much more dangerous setting“. The article ‘Milestones‘ has more, it also has references to the AfD (Alternative for Germany), and even as we see in the Financial Times (at https://www.ft.com/content/d695fff8-b838-11e9-96bd-8e884d3ea203) “It is a happy hunting-ground for the AfD: if polls are accurate, it could emerge as the most popular party in regional elections on September 1, even beating the left-of-centre Social Democrats which have governed this corner of East Germany since reunification in 1990. Two other eastern regions, Saxony and Thuringia, are also choosing new parliaments this autumn and, as in Brandenburg, the AfD is set to make big gains. That is a major problem for the eastern political elite“, I believe that this powerful eastern political elite is part of causing the headline ‘Germany: AfD surge threatened by party disunity‘, they are that scared at present. The gains cannot be stopped not to the degree some elitists are vouching for; the best that they can hope for is derailing them from becoming the majority, which is actually a political war that is allowed. The question becomes will it work?

We are 2-3 weeks away from finding out.

CNN gave us less than 2 days ago: ‘5 of the world’s biggest economies are at risk of recession‘ (at https://edition.cnn.com/2019/08/14/economy/recession-risk-economies/index.html), it is a huge part because the impact matters. Under Mario Draghi and his bond buying program, there are no reserves left, so the impact towards recession is about to get real. The shift in quality of life makes the consumer spending tactic an instant non option.

Yet, it all comes down to the Washington Post who (at https://www.washingtonpost.com/business/2019/08/14/stocks-tank-another-recession-warning-surfaces) gives us: ‘Stocks losses deepen as a key recession warning surfaces‘. It is here that we get: “after a reliable predictor of looming recessions flashed for the first time since the run-up to the 2008 financial crisis. The Dow Jones industrial average fell 800 points, or about 3 percent, and has lost close to 7 percent over the past three weeks. Two of the world’s largest economies, Germany and the United Kingdom, appear to be contracting even as the latter forges ahead with plans to leave the European Union. Growth also has slowed in China, which is in a bitter trade feud with the United States. Meanwhile, Argentina’s stock market fell nearly 50 percent earlier this week after its incumbent president was defeated by a left-wing opponent“. First of all, ‘reliable predictor‘ is not the term I would use, the dangers were clear for well over a year, it was the wrong stage of a trade war, with the Huawei 5G setting that pushed the inevitable date forward by a lot. The entire Huawei stage was a stage of stupidity, and a more dangerous post-recession part than anyone was willing to consider. We might find clarity in the footnote: “But with so many losing confidence in the near-term prospects of the economy and rushing to buy longer-term bonds, the U.S. government now is paying more to attract buyers to its 2-year bond than its 10-year note“, is looking in the wrong direction. It is merely a small symptom at present and direct consequence on risk and not the one that bites. The US is losing its footing on the global mobile market faster and faster. And even as we accept the ‘marketing’ that Huawei gives via Cnet towards 6G, the direct truth is outstanding for a longer time. It links to my own IP that is currently available to Huawei and I want my share of that market, I believe that my part after the fact will be enough to truly make me independent on several fronts. One party found my claim a $ billion market through the investment on $25m post taxation too good to be true, but it is the second wave that takes care of my needs and you gotta give a little to get a little. It is was the ‘denied’ parts of Credit Agricole and the Paris games of 2024 that gave me the final straw I needed to see that I was right all along. In all this verification that I was correct was always the biggest issue for me to deal with, and the recession is making those big business daddies of greed close to desperate, giving me a small push forward. Those people are not willing to walk away from a one billion market at the investment of 2.5%, no bank has ever offered those margins and with the Credit Agricole parts exposed to the smallest extent, I know it will work. It is there that I saw that the IP I designed was never considered by either Google or Huawei, all set to iterative paths to innovation, and the economy shows that nearly all of the other players were looking at the next quarter, whilst the quarter+3 was the game changer. The Olympics gave the option to look at inverted innovation and make it a new innovation, Paris was not the first, but certainly the clearest indicator and whilst we see through Channel News “Huawei Technologies has joined 564 other entities in the Paris Call“, the message is not that there are 565 players, it is that they are all looking in a similar direction whilst the none excavated the gold mine that was right behind them, a first lesson that the classics can inspire towards a new direction. Now that I see their direction I found two other fields that had not been considered to the degree it needed. Saudi Arabia is giving us Neom City, but there is a lack in one direction and now that this can be exploited we see even more options. You only had to be willing to get your hands dirty in the most literal of ways. And all this is pushed even more through the impact of the European economy. A French invention gets a new life after almost 2 centuries and we can see that there is more to be found.

Sergey Brin on Sat. morning

It is what else Harmony OS can do that will push the benefits away from the US and it will hurt Google to the smallest degree (almost inevitable), Google is just too big, but now that the equation changes, it is Google who will be chasing Huawei, so well done Trump dude, you merely made everything worse for America and I will sell to the quickest bidder and the 2.5% approach gives me the edge; the two known entities Ren Zhengfei and Papa Smurf Sergey Brin can make the investment from the small change they have in their pockets and the bait would be just too appealing for them.

Al this was confirmed and accentuated through the US Senate with: “In February, the US Senate Commerce Committee held a hearing titled “Winning the Race to 5G and the Era of Technology Innovation in the United States”, to discuss what policies are required to accelerate the deployment of 5G to keep America “competitive on the international stage”” and whilst we accept the American point of view, they forgot about two elements in the 5G field and the upper echelons of decision makers showed at that point that they were working in a dimmed room without lights, giving additional evidence that they never saw the writing on the wall and now I get to make a new voice and whilst I only am willing to trust Google or Huawei in all this, there can only be one winner and the others are merely a chaser at best, it is the price of iteration over innovation. Even as Microsoft and IBM are in denial of what they are about to lose, they do know and accept their choice. Microsoft is banking on Azure and there the hindrance of Harmony will cause a void, they were ready for Android, yet HarmonyOS is another matter and China is seeing that as another opportunity. It is there where we see the talks of Huawei with the Shanghai Blue Cloud Technology taking an additional turn, and how many players in the Paris games are banking on Azure? How many lose out when they are not ready for the 5G version 2 under HarmonyOS, it will work with Android and Azure, but suddenly we will see some accidental 10% gap (latency) and that is how the game was played and all this before my elements come into play, and they will!

The big business slammers all relying on PowerPoint presentation they are given the elements and when we see the 2023 acceleration and people cannot answer the differences because they never considered looking behind them as well as looking at the corners of their eyes, the blind corners they ignored; now they no longer have one blind spot, they suddenly have three and we get all kinds of concept promises in presentation form, all whilst the data was never that unclear from the very beginning. An issue they claimed that it was being looked at.

So here I am, having to take their shit with the option to sit at the sidelines watching them fight over options because they anticipated without comprehension, sometimes the universe gets to be nice and smile at those having to take their shit. A direct zero day exploit of the applied intent of narcissism on how good a presentation looks, whilst their data never clearly supported it.

My case of exceeding expectations towards customer satisfaction trumped some short sighted ‘Ca$h is king‘ setting, because it works at the grocer, but that part has no bearing when their minimum needs exceed he budget of 80%, it was a simple equation from the very beginning. So when we are now considering the new ‘truth’ where the Washington Post gives us less than an hour ago: ‘Weak global growth likely to mean US slowdown, not recession‘, we merely see wishful thinking in the quote “Yet most analysts expect the U.S. economy to power through the rough patch, at least in the coming months, on the strength of solid consumer spending and a resilient job market. The U.S. stock market plummeted earlier this week when the bond market, spooked by the global turmoil, sent a possible early warning sign of a recession ahead: The yield on the benchmark 10-year Treasury note slipped briefly below 2-year Treasury yields“, the article (at https://www.washingtonpost.com/business/weak-global-growth-likely-to-mean-us-slowdown-not-recession/2019/08/15/1cb8d81a-bfba-11e9-a8b0-7ed8a0d5dc5d_story.html),all whilst we see the clarity of next quarter believes linked to the next Thanksgiving and Christmas, all whilst it is Q2 2020 that makes the tequila slammer which gives the drinker the sledgehammer headache stated it was one that they never saw coming. The entire trade war is taking a new turn and when the people realise on all that the US is missing out on and therefor anyone taking that path will also learn that there is a long term price to pay and it is the markets that Google and Huawei are now staging for that brings the next stage. China has too much to gain, whilst Google will try to retain losses that they will optionally get (reduced growth is clearly a loss). Even as the impact for Google is small, losing one percent is still big news and there one percent adds to a billion plus, whilst their risk to hedge will cost them a mere 1.8% of the optional loss, it is a non-issue.

Guarantee?

There is none, but the option of a new 2% market is worth so much more than that, and it is not open to the iterative industries, innovators only, because it will be about the momentum and there is too much to gain. Consider what the 565 are looking at, whilst I focused on the group that represents up to 445,000,000 SME companies in a new 5G setting. The Olympics are merely the icing on the cake. 2020 Tokyo opens the doors more clearly but the impact is abundantly seen in Qatar 20222 and Paris 2024. And at present I see that they never looked in the places where they could be, merely where they want to be.

In the end it is one of Warren Buffett’s quotes that got me there: “the great moves are usually greeted by yawns“, thanks Warren; you were absolutely right on that part!

 

Leave a comment

Filed under Finance, Media, Politics, Science

Falling off the wagon

It all started with a success story, it then ‘evolved’ into the age of complacency as it was lying in a lazy floating chair in a swimming pool. America was lazy, complacent and greed driven.

Huawei overtook Ericsson in 2012 as the largest telecommunications-equipment manufacturer in the world, then casually overtook Apple in 2018 as the second-largest manufacturer of smartphones in the world, still behind Samsung Electronics, and rose to the 72nd rank on the Fortune Global 500 list. In December 2018, Huawei reported that its annual revenue had risen to US$108.5 billion in 2018 (a 21% increase over 2017).It is at this point that America was a mere 3rd position, Huawei is presently servicing 47 of the 50 largest telecom operators on the planet, for the first time in history America no longer really matters as a technology provider. Sources like the Economist, the Guardian, Fortune and TechRadar all give the same news. It is at this point that the USPTO has to give the goods (read: the bad message) that Asia has surpassed America with registered patents by a lot, and the US has to deal with more and more bad news as they get strangled by a debt that surpasses $22,000,000,000,000. 22 trillion and no end in sight to turn it around, now that 5G is off to the races more bad news is given as the American and Nokia 5G solutions are decently inferior to the ones that China (Huawei has). The American overreaction is astounding and it comes with additional levels of humour. When we see an article by cyber security expert Zak Doffman in Forbes ‘Huawei ‘Slams FedEx Vendetta’ After Courier Refuses To Deliver P30 Phone To U.S.‘ (at https://www.forbes.com/sites/zakdoffman/2019/06/23/huawei-slams-fedex-vendetta-after-courier-refuses-to-deliver-p30-phone-to-u-s) where we see: “Parcel returned by FedEx due to U.S. Government with Huawei and China Government—return to sender, the humour is here as we also saw a month ago: ‘Drug traffickers’ favourite way to move fentanyl is FedEx and USPS‘, so Fedex can stop a Chinese mobile phones, yet is incapable of stopping drug traffickers. It has become that bad and for the life of me, the idea that that stupidity has grown to this degree at the moment has made me realise that pretty much my only option left is to offer my IP at 10% value to China as America clearly can no longer be trusted to stop the stupidity in its own ranks.

And it gets to be worse. Now we see: ‘The U.S. blacklists five Chinese supercomputer firms, including AMD joint venture THATIC‘ (at https://www.pcworld.com/article/3404464/the-us-blacklists-five-chinese-supercomputer-firms-including-amd-joint-venture-thatic.html). So as we are now introduced to ‘U.S. firms will be forbidden to do business with the companies‘ we are shown more than stupidity. I have been an avid fan of the segregation, isolation, and assassination triangle in tactics, but this is pretty much the first time in history that a nation is doing it to itself, implying that American bankruptcy is so close to the collapse that they need whatever they can to delay the collapse of their economy. I can never trust any government in that position to be honest about any trade it holds. Handing my IP over to China is perhaps the only option to get any decent amount of funds out of them, and I have to pay the rent at some point.

Do I care about these Chinese companies? Not really! Apart from my trusty Huawei mobile, I do not know any of them and there is no real reason to know or care about them, but the actions of America to the degree that they are doing it, like they are the biggest whoring bully on the block also implies that they can do it to anyone else and as I see it, there are plenty of UK (BT), Swedish (Ericsson), Finnish (Nokia) and other firms they can do this to when things do not go their way. They will come up with some kind of National security scheme like Finland is next to Russia or something like that. It is nice to advocate open and fair trade when you are the only one dealing (IBM, Microsoft) but that is no longer the case and Microsoft has become too self-indulgent as they screw up market after market just to push their Azure solution. America can no longer be trusted, that is the short and sweet of it, they know it and Americans know it too, but they are too desperate and there is no stopping a desperate bully who is about to no longer matter.

And the world is not ready for a bully like that. Japan is too deep into its own problems, Europe is desperate to avoid whatever recession comes next and the others have no independent voice. In all this India is as isolated as it gets and that takes 12.5% of the global population out of the equation. As the risk of a 2020 recession in Europe is nearing an almost certainty there is panic, there is panic on Wall Street because the 2020 recession will hit the US squarely in the chest during the elections, ending whatever small edge the Republicans have and it changes everything for them. The 2020 recession will be worse than ever because the ECB squandered their reserves on incentives and stimulus as there are no reserves left. The ECB, IMF and Wall Street all knew that this could come and the 5G hype was all about avoiding it so that the new economy could restart what was lost, but their lag against Chinese Technology vendors (read: mainly Huawei) is so large that it will help the Chinese economy, but the others will only get a fraction of the IP they do not own and that fallback (or non optional fallover) is a lot larger than some are willing to admit to.

Now the short sighted American bias against Huawei and China is hitting new heights as they try to isolate China, yet in the end they are isolating themselves as Europe is seeking another option, they are seeing the value of Chinese IP and they want alternatives, especially if it could delay or even turnover their own impending recession, in that scenario America will lose more and more because their own technology is flawed, untested and lacks innovation. It will hit Europe, whilst benefitting the Middle East as Saudi Arabia, the UAE and Qatar have signed up with China, America lost more than just weapon deals there.

What Cisco achieved with UTS in Sydney a decade ago is now happening in Qatar, Qatar University College of Engineering now has a similar deal with Huawei, implying that Qatar might be the first place where Huawei trained 5G engineers and innovators are born pushing 5G innovation. For Qatar this is more than good news, there is a first stage where Al Jazeera could become technologically more advanced than CNN, another blow to American pride and Al Jazeera is eager to really get there. They have miles to go, yet with 5G fully deployed they can do it in less than half the time we expect. All elements that push America back further and further. When I stated that this was a stupid move by America in 2018, I actually had no idea that they would lose to this degree, but at present they are and their decisions are making things worse not better.

As we see the first Huawei Authorised Information and Network Academy (HAINA) programme launched in Qatar, we also recognise that this will enable Saudi Arabia and the UAE more and more, so there might be a diplomatic stance ending the unfriendly border issues between the three and they will profit stronger and stronger.

There is absolute truth in the statement: “Undersecretary of the Ministry of Education and Higher Education Dr Ibrahim Al Nuaimi, said developing the technology capabilities of Qatar’s youth will have a significant impact on the smart evolution of society and country, contributing to the growth of Qatari economy.  “Initiatives such as this one between Qatar University and Huawei demonstrate the power that cooperative action can have in shaping the future of a nation,” he remarked“, it still requires the foundation and the nurturing of how to grow innovation, yet I have seen again and again that the hungry will find alternatives to make food and Qatar is clearly famished at present.

And there is one more nightmare to face. You see if China gets any IP hands on anything that could replace x86 technologies, the US is truly done for. At present they will laugh, scream and make all the claims that an ego driven nation could make, but then there is the history. We have 1975 when Federico Faggin and 11 employees created the Z80, there was a small team led by Chuck Peddle who came up with the 6502, it hit Intel and Motorola hard, a chip at less than 15% of the cost of an Intel or a Motorola processor. It would fuel an industry that would sell well over 15 million computers in an age where computers were not popular. We recognise that America was the driver in all this, it drove RISC to be the factor for the creation of Summit, still the fastest Supercomputer in the world, yet now that China surpasses America in patents, they have the core to create a new age of computer technology. We see that from 2017 onwards the Huawei Mobile Phone is the personal server to have; the fact that it is a mobile is beside the point. My IP was a security pass on personal mobile servers and that is the foundation of the next decade. It is not the personal computer or desktop, there is still the laptop and Chromebooks (and likeminded devices) have the option to be the next power drivers, but Huawei has the hand with 4 aces, they have the foundation of mobile personal servers and it scares America. My idea for what would have been (optionally) the Google Tome was founded on that idea as I created a solution to stop the NHS collapsing. Now that most elements are with Huawei and Chinese operators, America actually matters less. Even as Microsoft is still screaming Azure (whenever they can), we see that there are other options that could do similar and could surpass Microsoft within 4 years, that realisation is scaring America to death. They have no options when that happens. Complacency got them there and the next generation of these so called ‘captains of industry‘ are holding a hand with a two and a seven and they are playing Texas hold’em. A proverbial Snake eyes for the craps dealer in the house, which is the setting and the stage they can no longer escape. It is where they are at and their overreaction merely shows their levels of desperation.

In 2021 we will see that not only will they have lost 5G to a crippling degree, the other players will fare even worse. If China gets a decent deal with Japan, America will have segregated itself, they isolated themselves as Europe and the Commonwealth will seek whatever keeps them afloat and at that point with the debt closer to $25 trillion, they will end up cutting their own wrists with all the uber wealthy Americans seeking sunny shores in their mega yachts. Suddenly places like the Riviera, Dubai, the Virgin Islands and Italy will be swamped with Americans who will be quiet as mice as they wait for America to reinvent itself in the span of 2-3 decades, and America needs to get lucky to do it that fast. As the world is set to the currency of IP and patents, it might take a whole lot longer than that.

When I decided to get my Master in IP in 2010 I knew that there was a change in the winds, it was the clearest in IT, but I saw how it would impact to a much larger degree, I saw the shift to mobile patents in 2012, and now I see the other shifts too. I feel certain of my view, I cannot tell how politicians will react because that too impacts the changing tides, but overall they seem to align to the need of greed too often as such, my predictions are more likely than not coming true. It’s a sad world, if only American firm had not been so lazy relying on iterative technology for a decade, things would be very different indeed.

To complete the change China really only needs three more innovative steps in 5G communication to make it certainty and turn these steps into nail to service the coffin that is America, with the Middle East in play, there is every chance that they will pull it off, the rest of us (the non-Americans) will need to decide on how that future serves us best, because that too is a choice we face, and we have to make it ourselves.

And if you were in doubt until now, the Wall Street Journal reported only hours ago: “U.S. President Donald Trump is looking to require next-generation 5G cellular equipment used in the United States to be designed and manufactured outside China, the Wall Street Journal reported on Sunday, citing people familiar with the matter.” So consider this quote really clearly: the entire China matter has been going on for weeks, yet yesterday we see that equipment is to be ‘designed and manufactured outside China’, a discriminatory tactic that shows that there was no clear tactic in play, and clearly the Americans are not up to scrap at present. What else was not anticipated on?

Someone fell of the wagon and others were unable to see the dangers clearly, The US still does not recognise that it has a real problem; the first stage of solving the problem is at present not met. Do you really need more convincing?

 

Leave a comment

Filed under Finance, IT, Law, Media, Politics, Science

Updates

First of all

So whilst Microsoft is trying to rephrase their weak position through: ‘We are continuing to look at engagement as our key metric for success and are no longer reporting on total console sales‘, yes try to sell that whilst you have been all aggro on boasting boosted numbers for decades. Now that Xbox is about to become the number THREE system, they are running scared. The Nintendo Switch is now at 32 million, which surpasses the previous total number of Xbox One consoles sold, but they are currently allegedly at 41 million consoles sold, which means that there is only a 9 million gap until the most powerful console in the world degrades to the bronze position. Nintendo sold 14 million consoles in the last quarter alone, so that gives light that this is the last quarter with Xbox in the number two position, optionally the last month. Yet, I admit, my expectation of passing Microsoft by January 31st was not met, I was wrong. Yet the total number of consoles sold in the last quarter is still an amazing feat by Nintendo and it also shows that even as I was not correct in the end, my view was a lot better than all the market analysts.

The writing is on the wall.

I personally believe that some analysts have been setting the stage for shorting the stock of Nintendo. The question becomes what the law states. You see, when we look at the definition of shorting stock, the most generic version is: “he or she borrows shares of a company from an existing owner through his brokerage, sells those borrowed shares at the current market price, and pockets the cash“, yet in this case, the premise is not entirely that clear, with ‘he or she borrows‘ we need to consider that shorting the stock was done as a service for a third party, giving rise to the sale at tremendous profits. At present I seem to be wrong, there is no evidence of a setting to allow for a short sell. Yet the predictions that were made last year were so wrong, in so many ways that the overall findings would lead me to this path (there are others too). So is it just me? I would actually agree with this, was it not for the fact that the level of wrongness regarding Nintendo was so profound.

The state last year (Oct 2018) was given with ‘Nintendo Delivers Record Quarter, But Misses Estimates‘, so the stock tumbled a little less than 2%, in all this, whilst within a year the total lifetime sales of the Microsoft Xbox One were completely by 67% at that time, in addition, the software sales were almost globally ruling software top ten lists all over the place. We can argue that the ‘missed estimates’ were so ludicrously unrealistic that the entire matter had to be looked at, now we see the last quarter alone delivered 14 million consoles, which is almost 50% of what Microsoft achieved in sales between 2012 and 2016, four years versus three months, so how were estimations missed?

The puzzlement is supported even further with: “That’s Nintendo’s most profitable Q2 in eight years and a solid increase from the $211 million it booked last year.” It is in that light that I had an issue with the predictions in the last year. From my point of view Nintendo smashed almost every record, yet the stock is not reflecting that, giving rise to a few issues, but as a non-trader and a non-economy educated person, I cannot give the weight to that thought, yet the thought remains.

And now that we are treated to: ‘Nintendo cuts Switch sales forecast despite strong holiday season‘ the matter should be set, yet I am not convinced. Even as we see 14.5 million consoles up to now the last two months are unlikely to give them the 5.5 million consoles they need, they expect to get 2.5 million consoles and that seems achievable. I am not convinced that the 5.5 million consoles cannot be met, merely because Microsoft is on the ropes and there is no marketing, no advertising to reflect that. In this aggressive expansion universe it seems odd that Nintendo is not taking up the gauntlet to that degree.

They drastically improved visibility, especially compared to the WiiU. They have the titles that have a large appeal across the board and the people who do play the Switch love the interactions. In addition the shock news of Marvel Ultimate Alliance 3 and the fact is that it is exclusively to Nintendo Switch is not merely news, it is equally a shocker to Sony as well, as this was the kind of stuff that Sony needed to prevent from happening. The fans (including me) loved the first one on Xbox 360 and as we see the foundation of the original Gauntlet added to the DC and Marvel Universe, we get a game any comic book fan would love to play and nearly everyone that was one did and loved it. So to get this exclusively to Switch is a dealmaker as well as a record breaker. I doubt that this game will be out in time to get the next quarter sales up to the degree it needs to be upped, but it will soar sales of Nintendo yet again (optionally not in time to make the 20 million marker).

So did Nintendo do it wrong? I am not convinced, they made huge mistakes in the WiiU era and seemingly repaired all those flaws in the Nintendo Switch stage, no matter what estimates were not met, we now see that Nintendo Switch has gotten to 45% mark of the PlayStation 4 lifetime sales in under 2 years which is quite the feat as Microsoft got nowhere near that result, ever!

In second place

This is given to us by the Guardian (at https://www.theguardian.com/world/2019/jan/31/italy-slips-into-recession-for-third-time-in-a-decade-economy) it is in the setting of the same wall with more writing. It was to be expected as Italy has a whole range of economic anchors and downfalls. Yet I had hoped that Italy would have been able to stagnate their economy; alas they do not get to be that lucky and recession is the result. The problem is that this could also adversely affect France at present. It is (according to the Business Insider) yet at present the recession there is most likely, yet not a certainty. No matter how it wields, the French President will have to make a few committing jumps on several levels and as the stage between the US and the EU is polarising France will be on the side of the French needs, which by the way is not on par with American needs, so the Europeans have that to look forward to in the next 5 weeks. It is also the Italian part where we see failings, the Guardian gives us: “The deputy prime minister Luigi Di Maio, the head of the Five Star Movement, said the recession was proof that Europe’s budget rules should be relaxed to allow Italy to stimulate its economy back to growth“, which is the larger mistake. That approach did not work for the ECB and now the EU nations have a 3 trillion Euro anchor around their necks, adding debt will not have any true influence on the economy. the entire spending spree is now to be the anchor that drowns the 27 EU nations sooner rather than later and that is the overbearing part why Brexit was essential, the moment the UK is cut form that, the entire mess evolves too fast for anyone to correct for. The entire mess on four economies, where the one (UK) leaves and two (France and Italy) have merely a recession to offer, which means no options at all leaving it all to Germany who has enough for the ace of spades to be handed to them again and again. Germany avoided recession as it grew by 0.1%, which means that they only defeated the recession on the academic principle. It still means that the German economy is stagnating and that is not a good feeling when you are a German. So whilst we now see a whole parade of blaming the UK on making matters worse through a chaotic Brexit, I merely state that these idiots only have themselves to thank. If they had done something about the lack of transparency at the ECB as well as muzzle Mario Draghi from spending 3 trillion euro’s, money they never had, the situation would not be this dire (as I personally see it). The fact that the Business Insider also reported: (at https://www.businessinsider.com.au/europe-economic-gdp-growth-data-heading-to-recession-2019-1) “Junk bonds went through the roof. Total issuance of junk bonds from non-financial companies (rated BBB) went parabolic, according to Bank of America Merrill Lynch, as more highly rated bonds declined“, it is directly linked to the problem, that market went up by €100,000,000,000 in the last year alone, so this time if there is another meltdown (like 2008) and it happens, Europe will not see the fallout as it happened in Wall Street. No, this time around Europe will be the cause of it all to a much larger extent, so the impact on Europe will be beyond disastrous. Whatever quality of life there is, the Europeans can kiss it goodbye for decades. They could quite likely desire the time of harsh austerity, how is that on forecasting quality of life?

In combination

The EU is in a bad place and it has been reflecting all over the place. You see, last November we were treated to: ‘CPPIB is shorting $750 million worth of EU stock, making it one of the most active short-sellers in Europe, data show‘, more important, it gets an added “Unusual in that Canada’s biggest pension plan also tends to hold ‘rather long-term’ positions“. It seems a perfectly valid place to be in, especially when we see that so far that pattern seems valid. We see the additional “the CPPIB has nearly doubled the number of its disclosed short positions since last year, to 23 from 14. That places CPPIB 14th on the list of the most active short sellers in Europe“, as stated before, I can see the presence, and in this case I cannot explain it (merely because I am not knowledgeable enough to do so). Now, as we see the recession hitting Italy, followed by France soon enough, we might see the reflection on how the gains for the CPPIB could be one of the most profitable ones they have ever had. Even as there is still a little doubt, the firm holding ‘$356.3 billion in assets’, might soon be growing to a half a trillion wealth management colossal. With the positions becoming winners as Talend SA, Wirecard and PostNL falling like a brick in free flight, we see that the CPPIB is lunging forwards through growth (for now).

When we see the impact markets where the fun of wealth comes through the investing towards the gloom of failure, there we see profits soar, profits for those selling short that is. This is not the end or the beginning of the end. As France is setting the stage to move directly into a recession we will see more and more short selling profiteers and as France stumbles, the eyes of all will focus on Greece. Even as we are given ‘Greece moves towards ending austerity with rise in minimum wage‘, it is hard to predict the outcome. It makes perfect sense to do this and when you realise it is significantly less than half of what an Australian would get over that same period. It makes us wonder how the Greeks had been able to keep themselves alive. I personally hope that the view of Alexis Tsipras works out the way he thinks it will, the case is viable, and will it work? Only time will tell at present. Yet it is also a dangerous place. That is seen with: “A glimmer of light emerged on Monday as borrowing costs on 10-year bonds dropped to a four–month low and Tsipras announced that the government would imminently be issuing a five-year bond“, we get the logic of essentially needing to borrow, but Greece is in a much too dangerous place and those bonds could backfire in a terrible way, I believe that the bond issuing was done too early, in a time when there is still too much to lose. In that I actually hope that I am wrong, yet my track record towards predicting these events have been too often on the nose and that worries me to no end.

In this Bloomberg view supports mine (at https://www.bloomberg.com/news/articles/2019-01-07/all-the-risks-besieging-europe-bonds-are-spilling-over-into-2019), the headline ‘All the Risks Besieging Europe Bonds Are Spilling Over Into 2019‘ gives that. Even as the view does not include Greece, the overall risk will be hitting all EU nations (as well as the UK). There are two parts to this, the first opposing me is the view “The risk of spillover from Italy is in our view overestimated,” by Arne Lohmann Rasmussen, head of fixed-income research at Danske Bank A/S. Both that as well as the positivity that he thinks that Spain brings is set on realism, the man is a professional, let’s not forget that. Yet on my side we see: “What happens in Italy is still likely to be felt in its Mediterranean peer, albeit not to the extent of the euro-area debt crisis earlier this decade” this is the Goldman view and I believe t is more accurate, more important the doubt and worrying nature of these investors will make them sketchy and shift happy on a few levels, so when Italy is hit, France will get a beating as will Greece and it will affect Spain too, depending on their economy optionally a lot less and there we get back to the academic non recession of Germany, that 0.1% in the plus, when that gets hit negatively it will escalate the Mediterranean issues by a lot more hitting Spain for certain and hitting the others harder. It is merely my view, yet I believe it to be the correct one. For how much is unknown, I have no idea and I am not willing to guess. We will see a lot more by the end of March. It is at that point where we see what the actual impact will be, at the point the people will decide to either enjoy a little sunshine or make sure that they can avoid the winter of their bank accounts, in Europe these options have become mutually exclusive, an impact that will hit tourism in Greece and Spain in more ways than one. At least the Greek prediction that their tourism will level off in 2019 is decently realistic, which opposes the view: ““2019 will be Greece’s year,” according to DER Touristik, the largest travel company in German-speaking countries” one that is wishful thinking at best.

 

Leave a comment

Filed under Finance, Gaming, Media, Politics