Monday Digest #98
Weekly summary of finance, economic and tech news. Vision from DreamTeam. With 💜
Trump released a video message in which he said that on the first day as the head of the White house, on January 20, he will renounce the agreement on the TRANS-Pacific partnership (TPP).
The TPP is a preferential trade agreement between 12 countries in the Asia-Pacific region. Its goal is the reduction of tariff barriers, and the regulation of the internal rules in the participating countries in such areas as labor law, environment, intellectual property, and several others.
Reuters: in addition, he intends to:
- introduce a rule limiting government regulation (for each new constraint must be removed two old),
- forbid politicians to take lobbying jobs for five years after dismissal,
- initiate an investigation by the Department of labor of violations of the visa programs,
- cancel some restrictions on the production of energy, including shale oil and gas.
OPEC:
On November, 28, holds an internal meeting of representatives of OPEC countries in Vienna.
Note that previously it was assumed that on November 28 there will be a meeting of the organization of countries — exporters of oil (OPEC) with Russia and other countries that are not included in the cartel. However, it was canceled after Saudi Arabia refused to participate in the negotiations. The Ministry of energy of Russia also refused to join this meeting.
On November, 30 the countries-exporters will have to finalize the terms of the reduction of oil production that were previously adopted in Algeria.
On December, 4 there will be held a referendum on the changing of the Constitution in Italy.
This vote is called “voting for Italeave”, this time the acronym with the end -exit just didn’t fit the sound.
According to final opinion polls, most Italians will vote against the reform of public administration, proposed by Prime Minister Matteo Renzi, which requires to relay most of the powers of the Senate to the Parliament and the Prime Minister.
#macro #finance
Chinese banks increasingly rely on the sources of funding that have been popular with Western counterparts before the financial crisis. Leading investors and analysts warn that China’s financial system may be vulnerable to collapse in the style of Lehman Brothers.
The rapid growth of loans and other debt assets outstripps the growth of deposits. The ratio of Chinese private sector loans to commercial Bank deposits increased to 117% at the end of March from 84% at the end of 2008.
Though, this figure is still lower than that of developed markets such as the United States (181%), EU (178%), the fast uptrend raises concerns for the financial stability of the banking system of China.
The Turkish Lira has updated a historic low against the dollar.
In November, the Venezuelan Bolivar fell by 45%.
Manager Steve Eismann, who became the hero of the bestselling book by Michael Lewis “the Big short. Secret springs of financial catastrophe”:
European banks have clearly lost from the winning of Trump, as his policies will have a negative impact on the economy of Europe. In addition to non-performing loans, in every country in Europe, the largest owners of sovereign bonds are local banks.
Consumer prices in Japan in October declined for the eighth consecutive month. This is the most prolonged period of price decline from 2009–2011.
The Bank of Japan remains far from its inflation target of 2% in the face of weak consumer demand in the country.
According to the latest forecast of the Bank of Japan, inflation excluding fresh food will reach the target during the 2018 fiscal year, which starts in April 2018.
#COMMODITIES
In the USA the amount is finally starting to develop into quality. We are talking about the growth in production volumes and the increase in the number of drilling. Of the last 26 weeks growth was observed 24 times. Over the past week, growth was equal to 2 installation, and the total number of active drilling rigs amounted to 274 — the highest since January.
The arrival of Donald trump to power may lead to accelerated growth of oil production in the United States. Republicans traditionally support the oil and gas company, and Trump advocated the energy independence of the United States: he advocated for the removal of restrictions $50 bln for oil, gas, coal and for the construction of the Keystone XL pipeline and other oil infrastructure (including on the continental shelf).
Recall that earlier we wrote You that the decision of OPEC to limit oil production could play into the hands of producers of shale oil in the United States.
In India, businessmen and other people involved in money laundering and tax evasion, in different ways resist the government’s attempts to deal with these phenomena.
Authorities withdraw the largest banknotes from circulation, but businessmen, for example, pay salaries to staff for several months in advance or buy gold to get rid of cash. Due to high demand, retail prices of gold in India began to rise.
In addition, there are rumors about the impending ban on the import of gold in India. If this information proves to be true, it will be a real shock to the market, because the import of the precious metal in India is around 700 tonnes.
MarketWatch: This will produce a bombshell, the cost of one ounce of gold can suddenly collapse to $200. In August 1971 the U.S. President Nixon already shocked the world by announcing the release of “gold standard”, and, if India will ban the import, the magnitude of these two historical events can be quite comparable.
#INTERESTING
A group of scientists from the University of Central Florida (UCF) have developed a new method for the production of flexible supercapacitors. Smartphone with this power source will be capable of work out a week and be recharged in a matter of seconds.
Highcharging speed, by the standards of today, occurs due to the fact that static electricity in this unit builds up on the surface, and not through the chemical reactions in the battery.
Qiwi Bank, a part of Qiwi group, entered the market of consumer crediting: it released the interest free credit card named “Conscience”, which will be issued in Moscow, and in the spring of 2017 in Tatarstan.
The rate to the borrower during the credit period will be 0%.
The loan period is 1–12 months, the amount is— 5 000–300 000 RUB.
The project will earn rewards from its partners: shops, restaurants, gas station will pay to the project for attracting new customers.
Chinese travel operator Ctrip has signed an agreement to buy British metasearch of tickets Skyscanner.
The transaction will amount to about $1.74 billion.
Skyscanner and Ctrip expect to close the deal by the end of 2016.
Ctrip expects the deal will help the development of both companies — Skyscanner will give the operator access to global market, and the search engine will have access to the technology of the new owner.
#OPINION [dti in the media]
Managing partner at DTI Alexander Butmanov on RBC-TV on 25.11.16:
“Soros and Buffett follow quite different strategies, i.e. they are likely opponents, although they are allies in the ranking of Forbes. The fact that Buffett’s strategy is a mean reversal, that is, he finds undervalued securities and buys them, contrary to the opinion of the market. Soros also acts in spite of, but rather, it brings forth the trends and wants to “ride” them, i.e., Buffett is satisfied with a quiet economic situation, Soros, as I understand his strategy of the previous 20 years — earns on so-called “black swans.” So, actually, they are kind of opponents as black and white.
According to the latest data, Soros has unwittingly earned on Brexit, as he put a bet on gold companies, but these data were of the last month when gold was substantially higher, by approximately 10%, therefore, most likely, Soros has earned on Brexit in the moment. As it is now — whether he had closed positions or not — we will learn from the reports of his Fund if they are open. Yes, he tried to capitalize on Brexit, talking about Trump is the second question, on my data, he has not earned”.
IN THE VIDEO:
- Can big investors to provoke the “black swans”?
- The position of Buffett and Soros in relation to the charity.
- Will winning of Trump affect the opportunities to earn?
- Best deals & losses of Warren Buffett and George Soros.
- Soros and Russia.
Watch video: click here
The fed rate.
Mikhail Dorofeev, head of the analytical Department at DreamTeam, PhD, Professor of “Finance and Prices” department of Russian Economic University of G. V. Plekhanov:
The United States in 2017, amid everything else, has a very large debt, and the largest burden is on the first half (first quarter of the 17th).
Against this background, the delay of rate hike in 2016 was quite logical. Rates in America will grow, it is especially likely that the rate of increase will accelerate after the first quarter of 2017. due to the reduction of payments on the public debt of the United States.
In summary: if the rate will be increased in fact, since the mid-2017 this can happen two or three times a year.
Also we would like to draw Your attention that the LIBOR rate has increased to 0,93733 (see the chart below).
