Monday, October 15, 2018

Central banks could eventually end up owning all assets

Click here if the above video does not play

Tuesday, October 2, 2018

Top world cities positioned for long term success

The cities positioned for long term success does not include any from China or India. Marc Faber talks about current top cities vs future top cities on his latest October 2018 GloomBoomDoom report.

According to Jones Lang LaSalle (JLL), the cities which are best positioned for long term success are San Francisco, Silicon Valley, Boston, New York, London, Los Angeles, Paris, Amsterdam, Toronto, etc.

JLL further states that, "In an increasingly digital and global economy, cities must be able to attract high-end talent, foster innovation, and maintain competitiveness – and failing to do so can have dire consequences. 
Which cities are prepared to adapt, and which will get left behind in the dust?"

In order to answer this question JLL produced a City Momentum Index, which tries "to identify the cities that are at the forefront of the innovation economy, by looking at key factors such as the number of tech firms, education, environment, transparency, infrastructure, and international patents." The cities that are at the top of the JLL Momentum Index are: Hyderabad, Bangalore, Ho Chi Minh City, Pune, Kolkata, Hanoi, Nanjing, Delhi, Hangzhou, and Xian.

Out of the 30 cities best positioned for long-term success, 12 are in the US and 3 in Canada, 2 in Australia, and 10 in Europe. Only three cities were located in Asia (Tokyo, Seoul and Singapore, but not one was located in either India or China).  

Of the 30 cities with the highest growth momentum, only 5 cities were outside Asia (Nairobi, Lagos, Dubai, Seattle, and Bucharest).

I have to say, I found it bizarre that no cities in China and India were on the list for long term success.

As Herodotus opined already in the 5th century BC, "The cities that were formerly great, have most of them become insignificant; and such as are at present powerful, were weak in olden times. I shall, therefore, discourse equally of both, convinced that human happiness never continues long in one stay.”

Monday, September 10, 2018

More fiscal and monetary accommodations are inevitable

The US stock markets are making all time highs with the S&P500 and DOW almost at record highs. There will be a decline at some point in the future, and when that happens, investors should be prepared.

"With respect to asset markets, I think the most important question investors have to consider is how central bankers will react when the global economy weakens and when asset markets decline. Furthermore, how will currencies, capital markets (stocks and bonds) and precious metals, and other asset markets (real estate, collectibles, cryptocurrencies, etc.) react to another round (inevitable in my opinion) of monetary and fiscal accommodations, and other interventions such as tariffs (in short further manipulations of free markets)?"

Tuesday, September 4, 2018

Is it better to live in one of the most expensive cities or least expensive ?

Marc Faber in his latest market commentary talks about the various "cost of living" in various parts of the world and gives his take on what is being ignored in these rankings.

"Last month, I explained how challenging it was to make comparisons about the cost of living in different cities around the world and touched on the cost of health care and of education in various countries and specifically in the US. I mentioned at the time that Zurich and Geneva were deemed as the world's most expensive cities."

"While Zurich is the "most expensive" city with the UBS Cost of Living Index at 116.6, the world’s least expensive cities are New Delhi, Manila, Kiev, Lagos, and Cairo (Cost of Living Index respectively at 46.0, 45.2, 44.0, 40.6, and 34.6).

So, where should you live and work? This report fails to provide a definite answer but addresses numerous issues that need to be considered when taking a decision.

Safety is, in my opinion, an important consideration. You need to be careful about your own security everywhere in the world whereby the cost of protecting yourself, your family, and your property is far lower in some countries than in others. [I would rank Japan and Singapore as the world’s safest countries.] Furthermore, sleeping at night without worrying about yourself and your family being violently attacked is probably worth the price of living in one of the world’s more expensive cities."

Thursday, August 30, 2018

Growing trade deficits

On why the US has a trade deficit

“Trump is surrounded by number of economists and they think that American trade deficit [is] relative, relative decline of American labour force is due to import China. The import from China is symptoms of having become less competitive. Capital spending in U.S. has been low for 20-30 years. Economists have always argued to boost consumption in order to stimulate the economy. Obviously, one of the consequences of this is the growing trade deficit.”