Interesting Links

There seems to be a lot of stress at DeutscheBank.

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This article reports on PBOC's selling of US bonds and buying of Japanese bonds:

[url]http://asia.nikkei.com/Politics-Economy/Economy/China-gobbling-up-Japanese-government-bonds[/url]

They analyzed the latest TIC report - I think.

I post this here because I draw the following from it:
[LIST][*]PBOC seems to act as a trader -not as an investor (I saw posts on blogs about the "PBOC-Trader" in the past)[*]PBOC sold into bond strength from January on.[*]PBOC chooses JGBs as alternative[/LIST]
a contradicting argument is:[LIST][*]PBOC simply has to reduce their reserve holdings, because of the slowdown at home.[/LIST]

This article highlights the sentiment of Japanese CFOs that President Trump is a negative for US economy.

[url]http://asia.nikkei.com/Politics-Economy/Economy/Japanese-CFOs-see-a-President-Trump-as-top-risk-to-US-economy[/url]

[QUOTE]More than 70% of Japanese chief financial officers consider a Donald Trump presidency a near-term risk to the American economy[/QUOTE]

This could be one reason of recent US equity and REIT weakness.

I don't agree with this judgement.
Trump's proposed fiscal policies seem way healthier for the US economy than Hillary's policies.

Finally, in the American system, the president's political power position (ex-military) is one of a proposer - not an implementer (that lies with congress and senate).
So the identity of the president does not weight too much.

The Japanese behavior seems to be a case of herd/group-think effect.

IMHO, another reason to look to fade this break in US equities, once the election uncertainty wanes.

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Now that I think about. A similar sentiment might be present with Europe's CFOs (and other Asian, Chinese ones).

I consider George Friedman one of the most sharp-sighted contemporary.
His model based analysis is unparalleled, testable and tested.
Here is the summary of his The World in 2017 report.
The rest is here: [url]https://geopoliticalfutures.com/the-world-in-2017-2/[/url]
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Summary

Our 2017 forecast includes projections for several regions. Here are some highlights.

The United States:

U.S. foreign policy will shift toward nationalism and this will change U.S. relationships throughout the world.
The U.S. will not experience a recession in 2017 but will show signs of one by the end of the year.
The U.S. will seek to enforce or renegotiate trade deals such as NAFTA. Further multilateral trade agreements are unlikely.
The U.S. will seek to redefine trade relationships on a basis more advantageous for the U.S. and China will be the first target.
The U.S. will try to limit exposure to instability in the Middle East and Eastern Europe by shifting the burden of maintaining stability to allied forces.
In Asia and the South Pacific, the U.S. will maintain close military relationships with key countries, such as Japan and Australia. The U.S. will also continue to develop closer ties with India and will maintain relations with smaller countries like the Philippines.
The U.S. will increase cooperation with Russia in fighting the Islamic State in the Middle East.
Despite these improvements, the real relationship between the U.S. and Russia will continue to be defined by opposing fundamental interests.
The U.S. will work with the Turks to stabilize the situation in Syria at the expense of the Syrian Kurds; the U.S. will increase cooperation with Iran in the fight against IS in Iraq.
The U.S. will not be able to disengage from fighting IS or defeat IS decisively.
In Afghanistan, the U.S. will keep limited troop numbers on the ground but the Taliban will continue to advance their control over parts of the country.

Europe:

Germany will see a drop in exports in 2017.
Italy’s banking crisis will continue. It will morph into a political crisis and a confrontation with Germany and the European Union.
Non-euro EU member states, especially those in Eastern Europe, will be exposed to the stagnation in the German economy.
The refugee crisis will continue in 2017. Differences between European countries on how to deal with the crisis will continue and border controls, already a fact of life, are likely to be extended.
The U.S. will pressure the Europeans to commit to NATO. European states will agree but will not live up to their financial commitments to the organization.
Brexit will continue to have a political impact on Europe in 2017 but will have a limited effect on the U.K. and the EU member states’ economies.
The U.S. and NATO enforcements on the Eastern containment line with Russia will continue in the East, while the West will focus on debating better ways for the EU to defend its borders and increase internal security.

Russia:

Russia’s economy will face severe challenges, and this will begin to manifest as social unrest, especially in the countryside.
Oil prices in 2017 will not rise high enough to offset Russia’s economic woes.
Russia will seek to continue and formalize the frozen conflict in Ukraine.
Russia will be open to a certain degree of cooperation with the U.S. over fighting IS in the Middle East.
Russia will use proxies to assert its influence in some of its traditional borderlands, including the Balkans, Central Asia and the Caucasus.

East Asia:

President Xi Jinping will solidify his dictatorship in China in 2017, and the crackdowns on unrest and potential rivals will increase in severity.
Unemployment in China will increase in 2017 and lead to unrest, but not enough to undermine the Communist Party’s rule.
China will feel pressure from the U.S. and will look to respond in asymmetric ways, such as involving itself in the domestic affairs of other countries in the region.
No war will occur in the South China Sea or the Taiwan Straits.
Japan will increasingly appear to be the decisive power in East Asia.
North Korea will continue to develop its nuclear program, but no war will break out as a result.

Central Asia:

Central Asia’s instability will accelerate into crisis. Kazakhstan, Uzbekistan and Turkmenistan are the most vulnerable countries.

South Asia:

Indian Prime Minister Narendra Modi will try to increase the power of the state, especially over the Indian economy and will fail. GDP growth and foreign direct investment will fall.
India and Pakistan will not go to war over Kashmir.
The Taliban will build on gains made in the past year, gaining more control of Afghanistan, and Pakistan will see an increase in domestic insurgency due to spillover.

The Middle East:

Regional powers will compete for influence as a result of the chaos in the Sunni Arab world; Turkey and Iran will be the most active competitors.
Turkey will increase its military footprint in Syria, and Iran’s position in Iraq will improve in 2017.
Saudi Arabia will be forced to scale back its regional policy agenda, especially concerning the war on its southern flank in Yemen.
Raqqa will not fall in 2017, but the Islamic State’s conventional power will weaken.

South America:

Gridlock in the Venezuelan government will break in 2017. The government of President Nicolás Maduro in its current form will not survive 2017.
Brazil’s economy will finally end two years of deep recession and return to modest GDP growth.
The Argentine economy will show signs of normalization as a result of President Mauricio Macri’s reforms.

Africa:

The U.S. and France will very selectively engage in security operations in Africa.
Low-income countries in East Africa – Ethiopia, Kenya, Tanzania and Uganda – will see their economies grow multiple points above global and regional average growth rates in 2017.

Long-Term Technological Transformation:

2017 will be the beginning of a long decline in microchip-based industries that will not be reversible. These industries will be reduced to desperately looking for new and more dubious applications.
Between now and 2030, there will be an overlap with a new technology that is not yet obvious, which will revolutionize life the way the internal combustion engine and the microchip did.

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[url]http://www.businesswire.com/news/home/20170926005655/en/Intercontinental-Exchange-Announces-ICE-Futures-U.S.-Contract[/url]

FAANG might as well have their own index they already control the Nasdaq....lol

This is indeed interesting.

I plan to publish the NQ8 RT Money Flow before the end of the week. The NQ8 includes the Fang list, except Chinese stocks (BIDU, BABA)


Pascal