Theresa May's Brexit Gambit Is a Loser, Says Game Theory - Bloomberg

Theresa May's Brexit Gambit Is a Loser, Says Game Theory - Bloomberg

On Tuesday, the U.K. parliament made it clear that it doesn’t want the country simply to give up and stay in a customs union with the EU; it doesn’t want an extension of the Brexit process without a clear idea of what to do with the extension; and it doesn’t want to exit without a deal. It wants Prime Minister Theresa May to go back to the negotiating table with the EU and get a better deal (specifically, one that doesn’t land the U.K. in a permanent customs union with the EU to avoid a hard border in Ireland).

In more abstract terms, the parliament wants May to play the one-shot prisoner’s dilemma. In this game, both sides are prisoners and have the opportunity to cooperate or to defect (compromise on the Irish backstop or face a no-deal Brexit). 

Putin and the Apocalypse

https://www.project-syndicate.org/commentary/nuclear-war-putin-orthodox-approval-by-dina-khapaeva-2019-01?utm_source=Project+Syndicate+Newsletter&utm_campaign=f62eb6ea94-sunday_newsletter_27_1_2019&utm_medium=email&utm_term=0_73bad5b7d8-f62eb6ea94-93854061



...In recent months, popular support for Putin in Russia has declined sharply, with his approval rating falling from over 76% to 66% in the second half of last year. At the same time, a kind of neo-medieval thinking, focused on the restoration of autocratic monarchy and the supremacy of the Orthodox Church, has been gaining prominence in Russia.

How Should We Then Invest? - Maudlin

https://ggc-mauldin-images.s3.amazonaws.com/uploads/pdf/TFTF_Jan_25_2019.pdf





Seth Klarman, of Baupost Group



The divide between Americans has been exacerbated by the echo chambers of modern-day media and the internet. Many have written of how, in only about four decades, an America of three broadcast networks has become an America of hundreds of cable channels. A few decades ago, we had less connectivity but more connection. David Brooks and others write regularly about the challenges of increased loneliness and isolation. A person today can have a thousand Facebook friends—and few, if any, actual friends."



https://www.nytimes.com/2019/01/22/business/dealbook/world-economic-forum-klarman.html



The circulation of a letter from the investor Seth A. Klarman is likely to add to the typical hand-wringing at the World Economic Forum in Davos, Switzerland. The letter says mounting debt since the financial crisis could lead to a panic.

Leveraged-Loan Protections Go From Bad to Worse - Bloomberg

Leveraged-Loan Protections Go From Bad to Worse - Bloomberg



... In a deep dive into the asset class in August, analysts estimated that the average recovery rate on U.S. first-lien loans will probably decline to 61 percent in the next downturn, compared with a 77 percent long-term historical average. Second-lien loans may recoup only 14 percent, well below the 43 percent historical average, the analysts said. Moody’s rates about 29 percent of leveraged-loan issuers B3, compared with just 14 percent a decade ago. 

Project 5X - Risk Hedge

Project 5X - Risk Hedge



...5G will be up to 1,000 times faster than 4G.

But the real story is not the speed itself. It’s what the speed can do.

You see, 4G connections have a bit of lag.

You may rarely notice it, but it’s there.

5G will have zero lag.

Which may sound like a small detail...but it opens up a whole new world of money-making opportunity for you.

5G will allow you to:

• Appear as a hologram at a meeting in New York, from the comfort of your home, anywhere in the world.
• Have a self-driving car safely take you out for a night on the town.
• Download an HD movie in under five seconds.

Zero lag means the applications of 5G are endless.

King’s College in London did an experiment with 5G recently. Using virtual reality, a doctor performed surgery on a dummy patient from a different room.

That never would have been possible with 4G.

As you can imagine, with remote surgery, even the smallest lag could be disastrous.

The same is true with self-driving cars.

...

Today’s newest 4G phones have around 50 RF filters built in.

But 5G uses a different set of frequencies altogether. So, all phones will need new RF Filter chips.

That’s why, in order to take advantage of 5G, all 4G smartphones will have to be replaced.

All 5.1 billion of them!

Which gives us a rare investing opportunity...

...Take self-driving cars...

Just one self-driving car will use as much data every day as 3,000 smartphones!

Can you imagine how many RF filters one self-driving car will need?

The money-making opportunity in the RF filter space is mind-boggling.

...

And my research shows that only two companies stand to earn the lion’s share of profits from supplying those RF filters.

...Its a $180 million RF filter company based in Huntersville, NC, close to Charlotte.

The company is called Akoustis Technologies Inc. (NASDAQ: AKTS).

Akoustis is a disruptor.

It developed a unique kind of RF filter, called a BAW RF filter.

And even though BAW filters are expensive, customers are lining up to buy them.

That’s because companies need them in order to take advantage of 5G.

....This other RF filter company is, hands down, my top pick of 2019.

It has patented a technology that can build custom designs.

So, they’ll be able to build far more complex filter arrangements than Akoustis.

They’ll be able to do it faster and cheaper, too.

But there’s something else this company does.

...It doesn’t just sell RF filters. It licenses the design.

Then it collects royalties every month.

So, this company has managed to turn a one-time fee into ongoing streams of income, without giving up the intellectual property rights.

The 10 tax law changes that will most affect your 2018 personal return - MarketWatch

The 10 tax law changes that will most affect your 2018 personal return - MarketWatch

The investor known as the ‘Warren Buffett of Boston’ rattles Davos crowd with this warning - MarketWatch

The investor known as the ‘Warren Buffett of Boston’ rattles Davos crowd with this warning - MarketWatch



...The U.S., in particular, could reach an “inflection point,” when a skeptical global debt market will no longer lend at reasonable rates, and by the time the crisis comes it will be “too late to get our house in order. “Complacent” investors have been not only ignoring those risks, but taking on even more risk, he says, indicating he too is struggling to figure out where to invest right now.

German Gilets Jaunes in Stuttgart Have a Case, Too - Bloomberg

German Gilets Jaunes in Stuttgart Have a Case, Too - Bloomberg



...The original protesters were car owners. The mass rallies were initially directed against government policies many felt were unfairly targeting less well-to-do drivers -- environmentally-motivated fuel tax increases, draconian fines for traffic violations (France is one of the few European countries where a driver can even go to prison for speeding) and the lowering of the speed limit on country roads. Given France’s relatively high unemployment, real estate prices that prevent many from living close to their jobs, and underfunded public transportation in many areas, it’s easy to conclude the government either has it in for poor people who drive or doesn’t understand their plight. 



... 1.3 million cars with older diesel engines that are currently in use are affected, and the German government isn’t doing anything for their owners. 



...Since Jan. 1, cars complying with the pre-2006 Euro-4 emissions standard are banned from entering downtown Stuttgart. Starting in April, city residents won’t be able to drive such cars, either, and the pre-2011 Euro-5 standard will be outlawed by the fall.



...like in France, the conflict between lofty environmental goals and the needs of ordinary people isn’t so much about culture as about the fundamental question of how seriously governments should take the mobility needs of people who can’t afford to change cars every couple of years

U.S. Will Be Net Exporter of Oil in 2020 Thanks In Part to OPEC - Bloomberg

U.S. Will Be Net Exporter of Oil in 2020 Thanks In Part to OPEC - Bloomberg



...The U.S. is already by far the world’s biggest consumer of oil, using roughly one in every five barrels produced worldwide. 

Americans Living In Portugal - mortgages

Americans Living In Portugal

Maria Lee Clemente-Figueiredo Santander is a good option for loans as well as Novo Banco. From my experience as a real estate agent, their property evaluations are much better

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Maria Lee Clemente-Figueiredo replied · 4 Replies

John Iglar US credit ratings has no impact here. Banks look at your assets, debt & income. My data didn't fit the typical formulas here, so I found a broker. Quinta Finance gave me a lot of help and found me a mortgage. http://www.quintafinance.com/

Quant Funds' Poor Performance May Not Be Temporary - Bloomberg

Quant Funds' Poor Performance May Not Be Temporary - Bloomberg



... the search has focused on proprietary quantitative strategies, involving rule-based investments. The genre is ill-defined and marketed under different names, including factor investing, risk parity, smart beta and so forth.

Whatever the rubric, “quant” funds now have over $1.5 trillion under management.

...First of all, quant investing is tainted by hindsight bias —

THE AUTONOMOUS MOBILITY ECOSYSTEM: How automakers can compete in the future of mobility - Business Insider

THE AUTONOMOUS MOBILITY ECOSYSTEM: How automakers can compete in the future of mobility - Business Insider





... PwC predicts that the total number of cars on the road in the US and EU will drop from 556 million last year to 416 million in 2030.



...will entail competing with startups and tech giants for software development and data science talent, as well as reforming innovation processes to keep pace with digital trendsetters. Automakers will also need to create unique mobile app and in-car experiences to lure customers

Forget the Trade War. China Is Already in Crisis - Bloomberg

Forget the Trade War. China Is Already in Crisis - Bloomberg



...Charlene Chu, a senior partner at Autonomous Research and one of the foremost experts on China’s credit woes, estimates that 24 percent of total credit, worth some $8.5 trillion, has gone sour. That may sound outrageous, but in the 1997 meltdown, nonperforming loans in Indonesia, South Korea, and Thailand reached about a third of their total loans.

A Farmer Found a Trojan Horse Inside an Insurance Contract. Now He Might Bring Down the Canadian Insurance Industry. | Institutional Investor

A Farmer Found a Trojan Horse Inside an Insurance Contract. Now He Might Bring Down the Canadian Insurance Industry. | Institutional Investor

Sweden's New Government Sets a Scary Political Trend - Bloomberg

Sweden's New Government Sets a Scary Political Trend - Bloomberg



Lofven will govern on the basis of a 16-page document that looks like an untidy compilation of socialist, environmentalist and center-right ideas rather than a detailed and thought-out coalition manifesto. 

Elwood, Illinois (Pop. 2,200), Has Become a Vital Hub of America’s Consumer Economy. And It’s Hell. | The New Republic

Elwood, Illinois (Pop. 2,200), Has Become a Vital Hub of America’s Consumer Economy. And It’s Hell. | The New Republic

What would make a woman go back to Boko Haram? Despair | Azadeh Moaveni | Opinion | The Guardian

What would make a woman go back to Boko Haram? Despair | Azadeh Moaveni | Opinion | The Guardian



... In the early days of the insurgency, many women found the movement appealing because it offered alternatives to the patriarchy endorsed by their conservative families. The group’s leaders supported lower dowries, which meant more young women could choose husbands from among their peers, rather than the greying, financially secure men they would be traditionally compelled to marry. 



...She assumed that in Maiduguri, her kids would be able to attend school. But camp managers in Dalori II dismantled the one school on its premises, claiming it was no longer needed since people would be returning to their villages. But nobody has gone home, and now there is no school.



The northeast Nigerian state of Borno is now a vast patchwork of towns and villages with few men, a whole sub-society of single mothers trying to cope as breadwinners in areas with collapsed economies without their husbands’ protection and support. Some reintegration programmes offer skills training, but embroidering and selling a cap a month neither enables a woman to feed three children nor does it protect her from rape after dark.

Europe Needs a Revolution in UCITS Investment Fund Fees - Bloomberg

Europe Needs a Revolution in UCITS Investment Fund Fees - Bloomberg

China Is Bypassing Governments to Gain Influence in Europe - Bloomberg

China Is Bypassing Governments to Gain Influence in Europe - Bloomberg

Donald Trump Has Some Surprising Allies in U.S.-China Tariff War - Bloomberg

Donald Trump Has Some Surprising Allies in U.S.-China Tariff War - Bloomberg



...Their common enemy: the Chinese industrial state, an animus summed up in China by the lament “guo jin, min tui” — the state advances, the private sector retreats.



... a pervasive rent-seeking culture in which bribing officials was necessary to secure business deals, land and bank loans.



...Some wealthy entrepreneurs are moving their money offshore because they fear their tainted earnings will be confiscated. Others are putting off hiring and investing as the economy slows.



...The fact is that the world needs Chinese private enterprises to succeed if China is to remain a driver of global growth. And, conveniently enough, their demands mirror those of multinationals: better access to services markets that are currently dominated by state monopolies in energy, finance, telecommunications and transport; better protection for their intellectual property; a reduction in the subsidies, cheap financing and other advantages enjoyed by the state sector; and a desire to be left alone by meddling bureaucrats.



...the economic slowdown, exacerbated by trade tensions with the U.S., has stunned the Chinese leadership.  



...The International Monetary Fund calculates that while China’s per capita GDP, measured in terms of purchasing-power, is similar to Brazil’s, its consumption per capita is comparable only to Nigeria’s. If Chinese consumed like Brazilians, their spending would double.



... a comprehensive blueprint for economic reforms that would energize the private sector already exists. Five years ago, when Xi ascended to power, he unveiled a 60-point plan that pledged “to let the market play a decisive role in the allocation of resources.” Unfortunately, the document has been gathering dust ever since. Resurrecting those abandoned pledges in the name of rescuing private Chinese enterprises would give Xi the political cover to accede to some of Trump’s demands. A two-for-one bargain is available: China would be wise to take it.

Pension Fund Crisis Has a Start Date - Bloomberg

Pension Fund Crisis Has a Start Date - Bloomberg



...This brings us back to the recent decline in the stock market. This commentary uses 2016 pension fund data. Most pension funds use a June 30 fiscal year, so fourth-quarter calendar 2018 results will be reported in late 2019 or 2020. The two major aggregations of the thousands of fund reports will be published in mid-2021. If stocks continue down to the point that a major state passes the tipping point to crisis, the crisis will be well advanced before we see it in aggregate pension financial reports.



...The state and local pension crisis has passed from a long-term actuarial crisis to a medium-term cash flow crisis. Forget about liability projections and aggregated national numbers. Look at the least responsible big states and focus on asset values, inflows and outflows. That’s where disaster will force a new regime. 

Sweden's Stalemate Nears End With Deal to Keep Nationalists Out - Bloomberg

Sweden's Stalemate Nears End With Deal to Keep Nationalists Out - Bloomberg



 ...broader tax breaks for hiring home help and a green-light for allowing private welfare providers to make profits

Something Wicked This Way Comes | Mauldin Economics

Something Wicked This Way Comes | Mauldin Economics



the US and China ..., the Trump administration’s methods aren’t helping. They seem not to grasp that intentionally weakening an economy so tied to our own risks weakening the US as well.



...China is still subject to the law of large numbers. They can’t maintain 6% or higher GDP growth indefinitely.

The gap between US and China GDP growth has been shrinking over the last decade.

Source: Financial Times

It now appears the eventual Chinese landing could be harder than expected. 

...The uncomfortable fact is that a great deal of world growth is directly tied to Chinese growth. And not just absolute current growth, but expected future growth. Business has built 6% Chinese growth, compounded forever, into its models.

...Here’s a chart of China’s importance to top US semiconductor companies.

Note this is the percentage of sales, not earnings.

...A significant part of US growth last year came from a rise in US inventories. ... Those inventories are going to be sold in 2019 and often not replaced. A large part of the slowing economy in 2019 will simply be a reduction of inventories. The apparent robust growth of the last half of 2018 was essentially pulling production forward from 2019.

...Last month in European Threats, I quoted Victor Hill saying “a disorderly Brexit will be that spark that sets the Eurozone tinderbox aflame.” The fire is still ready to light and, if no deal emerges before the March deadline, could certainly erupt in flames, metaphorically speaking.

...The euro currency effectively gave Germany a stranglehold over the zone’s smaller players who bought German exports with German loans. We saw how that worked with Greece. Now a similar dynamic is unfolding in much-larger Italy—which, for its part, has some unique problems, too.

Yet with all this going on, the European Central Bank is still intent on ending its asset purchases in the coming year, even as it keeps interest rates negative. That is a formula for a wildly distorted economy, at the very least, and possibly much worse.

...Imagine what will happen if (when) the EU economy turns seriously south, unemployment shoots even higher than it already is, governments can’t afford their safety nets, and the population can’t afford higher taxes. It could get ugly and not just in France. Remember, many EU countries are parliamentary systems whose governments can fall anytime.

...what could change Europe’s trajectory

...1. A favorable Brexit deal. Since the UK’s 2016 referendum, eurozone shipments to the single currency bloc’s second-biggest export market have stagnated. If the clouds clear in the coming months, with a no-deal Brexit avoided, then risk premiums will diminish, sterling will rally and eurozone exports to the UK are likely to pick up. 

...2. Improved US-China trade relations. A deal to avert tariff increases would remove one major uncertainty hanging over the global economy. Again, risk premiums would fall.

3. A stabilization or acceleration in Chinese growth, ... However, there is little probability of a stimulus effort on the scale of 2009’s, so the effect on Europe’s economy and markets of Chinese policy easing is likely to be muted.

New construction projects “will revolutionise house prices” | Portugal Resident

New construction projects “will revolutionise house prices” | Portugal Resident

Why January 10 Could Spark (Another) Crisis in Venezuela | Americas Quarterly

Why January 10 Could Spark (Another) Crisis in Venezuela | Americas Quarterly



.... On Jan. 4, the Lima Group announced they would only recognize the country’s National Assembly as a legitimately elected body and called for the OAS to follow suit. 

“On Jan. 10, the clock starts ticking on a full-fledged accountability crisis in Venezuela,” said Luisa Palacios, the head of Emerging Markets research at Medley Global Advisors. 

The group includes the governments of Argentina, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Guyana, Honduras, Panama, Paraguay and Peru – but not Mexico. A president that much of the region considers illegitimate could mean that Venezuelans representing the Maduro government won’t be able to enter many countries. Further, financial dealings could be thwarted, accounts in foreign soil frozen, and weapons cooperation suspended. ...

...in 2019 with oil production falling below 1 million barrels a day.

What Venezuela’s severe economic crisis and hyperinflation mean is that Maduro’s capacity to distribute rents is significantly declining and the value of those rents is evaporating. ...

... I have always thought that regime change in Venezuela might be a two-stage process with some kind of political change within chavismo before there is a transition towards an opposition government. 

8 Famous Artists’ Favorite Vacation Spots - Artsy

8 Famous Artists’ Favorite Vacation Spots - Artsy

Will U.S. Housing Prices Crash? This Bear Says Worst Yet to Come - Bloomberg

Will U.S. Housing Prices Crash? This Bear Says Worst Yet to Come - Bloomberg

Bridgewater Posts a Stellar 2018 | Institutional Investor

Bridgewater Posts a Stellar 2018 | Institutional Investor



...The firm’s flagship Pure Alpha strategy gained 14.6 percent net of fees in 2018, the person said. That compares with a loss of 6.7 percent in data tracker HFR’s HFRX Global Hedge Fund Index and a loss of 4.4 percent for the Standard & Poor’s 500 stock index, including dividends reinvested. The Pure Alpha strategy has produced an annualized return of 12 percent since its inception in December 1991, according to the person. Bridgewater declined to comment.

China's Dollar Debt Is Surging, and That Spells Trouble - Bloomberg

China's Dollar Debt Is Surging, and That Spells Trouble - Bloomberg

Bulls have long argued that China’s financial risks are contained because of the country’s low levels of external debt and large foreign-exchange reserves. That has changed. China’s external debt has been increasing by an average of $70 billion per quarter since the beginning of 2017. If it keeps rising, Beijing will have the unpalatable choice of burning through its reserves or letting the yuan fall, both of which would carry additional risks.

China and the world need to think clearly about this growing dollar debt dependence. Any cessation of funding could have severe and unforeseen consequences.

To Help Put Recent Economic

To Help Put Recent Economic