Economics

Central Bank Balance Sheets

14 Feb: The Curious Case Of Central Bank Balance Sheets

There are plenty of “market experts” who believe they know the cause of the next crisis. Reality is that nobody knows for certain. What we do know is that the next crash is not far away. The current market cycle is officially the second-largest bull market since World War II. The bull market is officially 106 months old.

Dollar

31 Jan: The dollar exchange rate as a global risk factor: evidence from investment

Exchange rate fluctuations influence economic activity not only via the standard trade channel, but also through a financial channel, which operates through the impact of exchange rate fluctuations on borrowers’ balance sheets and lenders’ risk-taking capacity. The paper explores the “triangular” relationship between (i) the strength of the US dollar, (ii) cross-border bank flows and (iii) real investment.

short thesis wins finance holdings

10 Mar: Short Thesis – the strange tale of WINS Finance Holdings

Wins’ stock valuation is a puzzle. Investor Jacob Ma-Weaver, at Cable Car Capital, notes that most of the stock’s gains occurred on tiny volumes of odd-lot trades and end-of-the-day transactions. Some 40% of Wins’ trades on a recent day were for one share apiece. On March 09th 2017, the obscure Chinese financial company, headquartered in New York, trades at $315. Yes $315. That is not a typo. Up +1200%.

The Voting Machine and a Different Kind of Bubble

09 Mar: The Voting Machine and a Different Kind of Bubble

Ben Graham, the father of value investing, once said of the stock market, “In the short run, the market is a voting machine but in the long run it is a weighing machine.” To Graham the market was like a popularity contest. Investors “vote” for a stock out of considered enthusiasm for its prospects. Results however are determined in the long run as profits are “weighed” year after year and intrinsic value is revealed.