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The International Investor

March, 2016 Archives

Bombs and Brexit

By Benjamin J. Butler

 

Markets have seen a large short-covering rally since February 11th, which is reminiscent of the bear market rallies we witnessed in 2007/8 in the lead up to the GFC. The macroeconomic situation still looks weak to me and there are now some divergences appearing - such as the S&P 500 and the NYSE McClellan Oscillator. I think we are very overbought and we will extend a topping phase over the next few weeks, if not a more precipitous decline. Although I perceive many risks out there, Europe - and Brexit in particular - is a rising risk and could be the big spark that catalyzes a big fall  at some point.

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Still a Seller

By Benjamin J. Butler

 

London

 

Last week I spent talking with a number of the City of London’s brightest minds from Chief Economists and successful fund managers to retired policymakers.

 

London is a really wonderful place when the sun is out (perhaps that’s the same for everywhere!). I managed to find a nice boutique hotel in Kensington, literally two blocks from where I lived for part of my student life. I took out part-time jobs so I could afford to stay in this exclusive part of town. The white Georgian buildings are always spectacular in the bright sunlight.  And I love the way that this part of town has wonderful English institutions such as the Albert Hall, the Natural History Museum and Imperial College, but also one can duck into little authentic Italian cafes or Lebanese restaurants. For me, I love many cities across the world, but London is the world’s most global city.

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10 Year Treasury at 0.4%?

By Benjamin J. Butler

 

London, United Kingdom

 

This week I am in the City of London, meeting with economists, strategists and some retired policymakers to gauge where we are. Yesterday I had an off-the-record chat with the chief economist of one bank which was quite insightful. There seems to be two types of economists out there working for large institutions. The first type are perma-bullish and always miss recessions and when crises come along they rarely foresee the dynamic feedback loops that significantly worsen the impact on the real economy.

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Change

By Benjamin J. Butler

 

Devon, United Kingdom


A year ago when I warned that the world was about to enter a very volatile period of change with financial market crashes, societal upheavals and geopolitical turmoil, one could be forgiven for saying I was being a little dramatic. Even I wondered -- as I moved out of my apartment in the city to find a quieter refuge -- whether I was jumping at shadows. Perhaps the change would be drawn out over a longer period of time and some of these imbalances and pressures could be unwound over a longer period of time, I sometimes thought. Now, I think it's pretty clear that abrupt change is on the imminent horizon. 

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