This year saw the Volatility Index (VIX) return to the highest levels because the 2008-09 Financial Crisis amid the demands a double drop recession (May). The S&P 500 fell 17% from its April highs in April to its lows at the start of July. Definitely not the tummy churning ride of over 50% from the turmoil, but enough to operate a vehicle the already stressed certainly, ready – to – retire folks (who hadn’t already bailed) scurrying into the hands of bonds with 3% earnings. If you chose to stay invested right from the start of the entire year until today you would have secured a meager 5.5% come back for all of this roller-coastering (and emotional navel-gazing).

Better than a 3% (bond produce) perhaps, but also a sleepless evening or two. This year’s diverse asset classes driving the model? Small Canadian companies with similar returns. High Yield commercial bonds. Fixed-rate perpetual Preferred Shares. Not sure, however the model will not capture the highs nor will it catch the lows like the S&P 500 (or TSX for example). As time passes, different asset classes perform in different ways at different times bringing balance and variety to a collection and smoothing out potential volatility. It isn’t exciting, nor should it be. Want boring investment strategy?

“whatever needs doing” activism and additional market manipulation. The Fed and global central bankers have nurtured the illusion that risk marketplaces are safe and liquid (money-like). They have spurred “contemporary finance” and the transformation of increasingly risky assets into perceived safe and liquid securities. Ironically, as the liquidity myth is lighted in UK real property funds, a sovereign debt market dislocation ensures “money” floods into potential liquidity traps in risk marketplaces around the world.

  • At what price, and
  • What capacity powerbank should I buy
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  • All else constant, today’s value of an investment increase if
  • Management time

Three-month Treasury costs rates finished the week at 27 bps. Two-year government produces added two bps to 0.61% (down 44bps y-t-d). Greek 10-season yields rose eight bps to 7.76% (up 44bps y-t-d). Japan’s Nikkei equities index sank 3.7% (down 20.6% y-t-d). Japanese 10-season “JGB” yields declined two bps to an archive low negative 0.29% (down 55bps y-t-d).

The German DAX equities index dropped 1.5% (down 10.4%). Spain’s IBEX 35 equities index dropped 1.0% (down 14.2%). Italy’s FTSE MIB index slipped 1.4% (down 25%). EM equities were combined. Freddie Mac 30-year fixed home loan rates lowered seven bps to 3.41% (down 63bps y-o-y). 1.619 TN, or 58%, within the last 191 weeks.

824bn, or 6.9%, over the past year. 61bn. Small Time Deposits were little transformed. 3.21 trillion…, rebounding from a 5-yr lower in May. The U.S. buck index gained 0.7 to 96.28 (down 2.4% y-t-d). The Goldman Sachs Commodities Index sank 4.9% (up 14.9% y-t-d). July 4 – Financial Times (Tony Barber): “Europe’s faultline runs through Italy. Weekend by Eliamep Such was the candid opinion of 1 participant in a conference held last, an Athens-based think-tank. Few other participants dissented. By ‘Europe’ everyone realized, mainly, the 19-country eurozone.

For the question on the minds of European policymakers is where, and also to what extent, political, financial and financial contagion may spread from Britain’s June 23 vote to leave the EU. The sharp falls in Italian banks’ share prices since the British referendum indicate where financial markets smell the threat of contagion.

389bn) in soured loans saddling Italian banking institutions, the government has sounding out regulators on ways to shore up lenders bruised with a renewed selloff following the British vote to leave europe. July 4 – Wall Street Journal (Robert Wall): “There is no Plan B. That’s what many companies across Europe have been telling traders since Britain voted to leave europe. The exit and its timing are so uncertain, executives say, that few companies got any significant contingency plans to either defend against the fallout or take advantage of the opportunity.

July 4 – Wall Street Journal (Giovanni Legorano): “Britain’s vote to leave the EU has produced dire predictions for the U.K. The damage to the others of Europe could become more immediate and potentially more serious. Nowhere is the chance focused more than in the Italian banking sector seriously. In Italy, 17% of banks’ loans are sour.

Categories: Finance