May 5, 2020
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New ideas are needed
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The New York Stock Exchange’s recorded losses at an overall high level last Friday. Data from the US industry sectors was poorly received by investors.
Early bird catches the worm
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The AI hype and recent quarterly figures have given Nvidia the highest increase in value in Wall Street history. A whooping increase of $277 billion in one day. The market value of the semiconductor specialist moved to the two trillion-dollar mark on Friday.
Forget the past
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The international stock markets have experienced an up-and-down week. In the US, the rise in producer prices was spoiling investors’ buying mood at the end of last week and the Dow Jones Industrial Average (DJIA) was falling. The German benchmark index, DAX, reached a new record high on Friday and left trading with slight gains.
Swift changes
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CHANGES happened for this year’s Super Bowl, the multi-billion dollar sporting event. The NFL’s grand finale is undergoing a female revolution. Because of star guest Taylor Swift, health and beauty companies are also getting involved as advertising customers for the first time ever.
Good start
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Strong big-tech balance sheets lifted Wall Street into positive territory at the end of last week. However, disappointment over the latest US labour market report limited gains.
A new dawn
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The Securities and Exchange Commission (SEC) in the US has approved exchange-traded funds (ETFs) investing in the digital currency, Bitcoin, after a long period of hesitation. In the struggle with Bitcoin proponents, including large banks and asset managers, the SEC admitted defeat and ultimately allowed Bitcoin ETFs.
Rates remain unchanged
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After their recent record run, the international stock markets lacked further momentum at the end of last week. On Friday, investors lacked buying arguments on both sides of the Atlantic and trading was experiencing a lacklustre day all around.
Petro versus luxury
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The petro fortunes from the Middle East are reshaping the latest list of the wealthiest families in the world. Oil billionaires, luxury dynasties and industrial tycoons are part of the list of the greatest fortunes. For the first time in a long time, there was a change at the top.
Higher for longer
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Hopes remain for a continuation of the year-end rally on the equity markets. After the recent price gains, investors are hoping for such an outcome. In the coming week, economic data and signals from central banks are likely to dominate events.
Euro is gaining
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Black Friday is behind us. But the rise of online shopping has reduced the importance of Black Friday as a single day event. What originally started in the US has become a global event.
Deflation in the East
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Everyone in The Bahamas is feeling the rising cost of goods, energy and transportation. No matter if you visit the food store, turn on your AC or fuel up your car, you are paying more for these necessities than compared to the previous year. But the inflation rate in the islands is decreasing, and went down from 3.1 percent to 2.3 percent when compared to last year.
The world is getting smaller
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For the past three months, the MSCI World index has been posting losses. The index is one of the most important building blocks for long-term equity savers.
Crypto on the front foot
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The digital currency, Bitcoin, is making strong gains and traded temporarily above the $35,000 mark last week. One reason for the price surge is speculation about a first “direct” Bitcoin exchange-traded fund (ETF).
Snob effect
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Whether it is fine whisky or trendy Warhol painting, many things are becoming more expensive, even for the ultra-wealthy. This leads to a bull market in luxury properties because many rich people are eager to demonstrate to their community how bulging their wallets are.
No love for sandals
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The day after the IPO (initial public offering), Birkenstock investors are still not happy. The traditional sandal manufacturer experienced a debacle in its eagerly-awaited share offering in New York.
Is good news really good news?
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Despite the tight monetary policy, the boom in the US job market continues unabated and is once again fuelling concerns about further interest rate hikes among financial markets players. A total of 336,000 new non-farm jobs were added, almost twice as many as many economists had expected. In addition, according to revised government data, there were around 120,000 more jobs in August and July than initially reported.
The price of life
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Who wants to live for ever? And how long will I live? If you want to know this, you should have your telomeres examined. These are the sequences at the end of the chromosomes. And the longer the telomeres are, the longer the lifespan. For this discovery, Elizabeth Blackburn, Carol W. Greider and Jack Szostak received the Nobel Prize in Medicine in 2009.
A new era of big government spending: Reshaping the American economy amid geopolitical uncertainty
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Over the past two years, the US has witnessed a profound shift in economic policy, marking the dawn of a new era of big government spending. This transformation is driven by a combination of factors, including President Joe Biden’s ambitious initiatives, such as the Inflation Reduction Act and the CHIP Act, which are reminiscent of the largest government spending sprees of the 1930s. These initiatives not only aim to reboot the US economy but also set a precedent for the world to follow.
A new era of big government spending
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Over the last two years, the United States has witnessed a profound shift in economic policy, marking the dawn of a new era of big government spending.
Software with solid gains
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August is behind us and markets worldwide had a more or less quiet month. In New York, caution about the forthcoming labour market report has somewhat pushed the hopes of an interest rate pause by the US Federal Reserve into the background. The leading index, the Dow Jones Industrial Average, slipped gradually until the end of August and posted a loss of 2.4 percent.
Investors advantage
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The boom in artificial intelligence continues to fuel profits and sales for chipmakers. Nvidia exceeds expectations with its figures, the stock climbs to a record high and makes chief executive, Jensen Huang, $4bn richer.
A weak dragon
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China's real estate giants are faltering. Evergrande has filed for bankruptcy protection and competitor Country Garden is on the verge of insolvency. To prevent panic, Beijing could intervene with billions of dollars in aid.
The impending impact of AI on financial markets
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In a world where technology continues to evolve at an unprecedented pace, recent advances in Artificial Intelligence (AI) are poised to reshape the landscape of financial markets.
Prepare for soft landing
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In view of the slowdown in inflation, US consumers increased their consumption significantly in June. The US Commerce Department said last Friday that consumers increased their spending by 0.5 percent from the previous month. Economists had expected growth of just 0.4 percent, down from a revised 0.2 percent in May. Private consumption is a cornerstone of the US economy, which continued to grow robustly in the spring, also thanks to consumer spending.
New highs for old companies
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ARTIFICIAL intelligence (AI) has been the new hype on Wall Street over the past six months, and investors are looking at start-ups and already-established companies to benefit from it.
Expensive superstars
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Ticket business for the superstars in the entertainment industry is shared by a few providers worldwide. While the Live Nation group (LYV.US) with its subsidiary Ticketmaster dominates the business in the US, the German Eventim (EVD) is one of the leading international ticketing and live entertainment providers in Europe.
Global hike
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The Bank of England, the UK central bank, is raising interest rates to 5 percent in the fight against inflation.
Goal!!!!
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Just like the game on the field, the prices of soccer stocks on the stock exchange are often difficult to predict. Because listed clubs are impacted by major events, particularly their on-field success, these stocks are often considered volatile. Sporting success increases the attractiveness of the club for fans and advertising partners, and increases the chance of selling more fan articles.
New faces, same story
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The re-elected Turkish president, Recep Tayyip Erdoğan, wanted to calm the markets and settle the Turkish currency crisis with the new finance minister, Mehmet Şimşek. But the plan did not work, and the lira hit a new record low on Friday last week.
New hope
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The averted US debt default, and positive data from the American jobs market, put international investors in a buying mood. In Germany, the Dax index jumped over the 16,000 point mark last Friday. Wall Street also closed higher.
A new giant
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The chip company, Nvidia, is benefiting massively from the boom in artificial intelligence (AI). The boom in AI gives the chip and graphics card manufacturer a boom in orders. The technology heavyweight's stock rose by almost 30 percent on Thursday last week. Nvidia trumps Apple's previous daily record on Wall Street.
Little juice left
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Global stocks of orange juice have shrunk significantly, and raw material costs are rising. Consumers must be prepared for price increases for their most popular drink.
Raise the lid
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The US federal government's debt ceiling has been reached and the clock is once again ticking. A default is imminent. International Monetary Fund (IMF) spokeswoman, Julie Kozack, fears "very serious" consequences for the global economy. The stock market is already getting nervous. The markets were down for the last two trading days of the week.
Debt for nature
Prime Minister Philip Davis KC was in the UK last week and spoke at the Caribbean Council reception in London, where he said once more that about 40 percent of the county’s $11bn-plus national debt was the result of post-hurricane repairs and restoration efforts. He stated further that climate change is the greatest threat that The Bahamas is facing. But this battle against climate change is a costly endeavour, and the country must be innovative in creating new sources of income and reducing the crippling debt it is faced with.
Show Time
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POLITICIANS worldwide are fighting over carbon dioxide prices, domestic flights and kerosene taxes to slow down climate change. The goal is to limit the global rise in temperatures to two degrees. But most energy forecasts are of the opinion that we are losing this battle. With this in mind, it is no surprise that car manufacturers are trying to do their part to make the world a greener place.
Pharma battle
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PHARMACEUTICAL companies typically compete with each other in various areas such as research and development, marketing and sales. Some of the biggest pharmaceutical companies in the world include Pfizer, Novartis, Roche, Merck & Co and Sanofi, and all of them are being traded on the various stock exchanges.
Week in review
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Week in review In the US, the Dow Jones and Nasdaq climbed on Friday and were at their highest level for four weeks. The European indices were also continuing their recovery. The losses since the collapse of Silicon Valley Bank, which started the global banking industry’s problems, are almost balanced.
Crypto revival
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The current plight of the banks brings back memories of the 2008 financial crisis. Calls for alternatives are getting louder. Bitcoin supporters are feeling encouraged.
Flashbacks of 2008
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The past two weeks have produced flashbacks to the 2008 financial crisis following the collapse of Silicon Valley Bank (SVB).
Managing our personal finances
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Financial literacy and emotional control matter at least as much as income in determining how wealthy someone is likely to become. Managing money can be a challenge for many people, regardless of their income level. The reasons for this are complex, but one key factor is the role of emotions in financial decision-making.
The debt ceiling issue
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For years the US national debt limit has been a persistent political issue, pitting Democrats against Republicans. As the latest deadline for the approval of a new limit approaches, with a cut-off date of March 2023, the question is whether the two parties can find common ground and agree to raise the size of the US sovereign debt.
Let’s start digging
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Worries about inflation and interest rates flared up again and triggered a price slide on the international stock markets during Friday last week. In the US, the PCE price index for January, which is based on consumer spending, was significantly higher than expected.
Rumour has it
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The ups and downs in the international markets continued last week. Robust economic data fuelled concerns about interest rates but, at the same time, consumer activity remained strong. This created a dilemma for many investors.
Earthquakes and history
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LARGE earthquakes have been a persistent threat to human civilisations throughout history, causing destruction and altering the course of entire societies.
Reasons to be (moderately) optimistic in 2023
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The global economy has been on a roller coaster ride since the start of 2020. First, we had COVID and the lockdowns, with economic activity almost coming to a standstill. Then came the euphoria of the reopening, which followed the success of the global vaccination programme. However, it was not long before inflation appeared on the radar of policymakers.
Artificial intelligence
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Artificial intelligence (AI) was an often-used word on Wall Street last week.
Is Tesla a car maker or a tech company?
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Being the world’s richest man is not for everybody. It takes a blend of determination, hard work and talent.
Mixed emotions
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The upward trend in the stock market continued into 2023 for a second week. The reporting season in the US traditionally starts with the balance sheets of the large financial institutions. However, their quarterly figures were mostly worse than expected.
Fresh start
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The first trading week of 2023 is behind us after providing some hope on the global stock markets.
A massive U-turn in China
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Having maintained a strict zero- COVID policy for almost three years, the Chinese government had become a prisoner of it. The strategy was designed to address the low vaccination rates of the elderly population (80 million people aged 80+ years are not vaccinated and 44% of the population did not receive the third dose, this percentage rising to 60% among people aged 80+ years). And, although studies in Hong Kong comparing CoronaVac with BioNTech’s vaccine have not been conclusive, the Chinese government did not seem to have much confidence in the degree of immunity provided by their own vaccines.
Rocky Road
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Several important interest rate decisions, and accompanying statements by the central banks, are depressing the stock market mood.
Market outlook for 2023
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THIS year has been a fertile one for market volatility. After decades of relative price stability, inflation returned with a vengeance, forcing a policy shift by developed country central banks and triggering interest rate hikes around the world.
Bad Santa
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THE mother of all consumer battles is over, and Apple is one of the winners. Americans shopped online for a record $11bn on Cyber Monday, and AirPods and MacBooks were very popular.
Lessons learned
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The collapse of the FTX crypto exchange, and the controversy swirling around its founder, Sam Bankman-Fried (SBF), have plunged the crypto market into an existential crisis.
Timeless Gold
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THE fact that gold prices have been subdued over the past year must be one of the most counterintuitive financial market dynamics of recent times. The precious metal is known as a safe haven, and a hedge against rising inflation. We certainly have had plenty of both recently, so why are gold prices down by more than 15 percent in relation to the yearly maximum reached in March? The answer is relatively straightforward: Blame the US dollar.
Destruction of an icon
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WHAT exactly happened? How could FTX go bankrupt almost overnight? And what does that mean for the entire market? We are trying to reconstruct the whole drama.
Fight against inflation
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IT WAS another seesaw week in the global financial markets. The hope that Beijing will relax COVID measures that have been very strict so far is fuelling expectations of higher demand.
Destroying fortunes
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EVEN the most powerful online retailer in the world is having trouble with the gloomy consumer mood. After disappointing quarterly figures, Amazon’s share price collapsed dramatically. This also affected the fortune of its founder. And some of the world’s other richest men are still feeling the effects of this technology crash.
Rise and fall
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It has been a few busy weeks in the Forex (foreign exchange) markets. On Thursday, the reaction of the markets was unequivocal, and we saw a certain ruthlessness when UK prime minister, Liz Truss, had barely announced her resignation before the pound sterling was appreciating again. The 30-year UK government bond yield fell nine basis points, which means investors are now viewing those securities as less risky once again.
Main Street versus Wall Street
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We are living through a phase of divergence between the interests of the real economy and those of investors in the financial markets. What is good for Wall Street is bad for main street, and vice versa. This dissociation between our everyday lives and those of high-flying investors is bad for the reputation of the markets, exacerbating the resentment of those who believe that a global elite is taking everyone else for a ride.
Avalanche!
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The first warning of an avalanche usually comes from the noise it makes, as the mix of snow, rocks and other debris rolls down mountain slopes at speeds that can reach 30 kilometres per hour.
Disaster avoided
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As predicted in last week’s article, the inflation rate in the euro area has reached double digits for the first time since the introduction of the single currency. As the European statistical office, Eurostat, announced on Friday, following an initial estimate inflation was 10 percent in September. In August, it was still 9.1 percent. Bad news for the Euro zone, but it was an even worse week across the channel.
Dollar on the rise
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What a stock market week. The euro reached a new 20-year low on Friday, while the yield on the ten-year Bund tested the 2 percent mark for the first time in nine years. The euro’s exchange rate fell to $0.97, while the yield on ten-year Bunds caught on around 1.95 percent after rising to 2.01 percent at the start of trading.
New Tunes
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THE Music industry has been in a state of transformation since the Internet’s launch in 1999.
Decency and stock markets
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Decency and stock exchanges are two different things. If you did not know that yet, you could see it again this week. The Queen dies and what are the stockbrokers doing in the City of London? Still trading stocks as if nothing happened. At least they could have offered a reasonable discount. A black Friday would have been a sign. But what does the FTSE 100 stock index do? Closes with a comfortable gain of more than 1.5 percent. A thoroughly cheerful trading day.
Bitcoin: The Story So Far
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BITCOIN is the original cryptocurrency, created in the aftermath of the 2008 global financial crisis when someone known as Satoshi Nakamoto (their real identity is unknown) published the blueprint. The aim was to bypass traditional financial intermediaries and end central banks’ control over money, relying instead on a peer-to-peer system supported by blockchain, which is the name given to cryptographic information distributed across a decentralised network.
A market turned upside down
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These are tough times for investors. Unwritten rules underpinning the financial markets’ behaviour do not seem to apply any more. In the old days, a hawkish Federal Reserve would be likely to trigger a sell-off of stocks. Especially when inflation remains close to four-decade highs and a recession is lurking on the horizon. In the past, such scenarios would have entailed a significant loss for indices such as the S&P 500 or the NASDAQ.
Tough Times for Britain
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During the second quarter of 2022, the United Kingdom’s GDP dropped by 0.1%, confirming the gloomy expectations of analysts, with the pace of the contraction expected to accelerate in the runup to the end of the year. Meanwhile, June’s inflation exceeded 10% for the first time since February 1982, while wage growth was limited to 5.1%. A significant drop in buying power for British families, driving an increase in poverty.
Crisis - what crisis?
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Who is talking about a crisis and recession? In the US, inflation was last at 9.1 percent, economic output shrank in the first half of the year - but the labour market is booming. Even experts are surprised.
Happy investors, angry consumers
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While the population is carrying the burden of high electricity and gas prices, energy companies are reporting record profits and making their investors happy.
The end of the show
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Almost no other company has shaped the world of film and television in recent years like Netflix. The video service has shaken the balance of power in Hollywood. It positioned itself as anti-television that does not force its customers into a rigid program, does not expect them to advertise, and releases whole seasons of series at once instead of every week.
Winter is coming
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I do believe there are catastrophes that everyone can see coming long before they happen. Events and developments that become apparent long before they occur, initially often swept under the carpet, then deliberately ignored before being trivialised in their effects a little later - and whose impact is only recognised at the very end, when there is nothing left to deny.
The wrong Tweet
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Many consider Elon Musk to be the messiah of the global technology industry. But he got bogged down with his billion dollar plans to take over Twitter. And, at Tesla, the problems are piling up.
Contradictory Futures
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On the futures markets, metal prices have recently fallen sharply. This is not an all-clear for inflation, because if you look at longer-term price development, the problem becomes more than clear.
Time for a new global order which deals everyone a fair hand
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SINCE the financial crisis of 2008, the idea that globalisation is doomed gained traction in some circles, fed by the rise of nationalist movements, trade wars, the COVID pandemic and, most recently, the war in Ukraine. The free capital flows and open borders trading, which characterised the global economy over the past four decades, currently face a serious backlash.
Bust or deflated
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ACCORDING to experts, the cryptocurrency Bitcoin is entering its lowest and darkest market phase. The price of Bitcoin fell to its lowest level since December 2020 on Wednesday, and even hit $20,000 for a short time. The oldest digital currency was trading at around $20,500 on Friday, June 17.
Choppy waters
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Downtown Nassau and its cruise port have seen some signs of life during recent months. The berths are full, and the tourists were roaming the streets and supporting the local economy once more.
Food security
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The shockwaves caused by Russia’s invasion of Ukraine continue to reverberate, transcending the nations directly involved and the wider European region. The impact has been profound and felt globally, both in the political and economic spheres.
The Fed’s latest conundrum
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OVER the last six months, inflation fears have focused the attention of policymakers, economic agents and investors. Central banks have tilted towards a more hawkish stance, while headline-grabbing rises in the cost of living came to dominate the media narrative. In the markets, dynamics shifted dramatically. Risk appetite evaporated, stocks tumbled and bonds were sold.
Tricky Russians
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EVEN many Russians cannot believe their eyes at the exchange offices in Moscow: The ruble is getting stronger and stronger. The Russian war of aggression against Ukraine, western sanctions, the mass departure of companies - all of this is weakening the country’s economy. On Thursday, for example, McDonalds announced the sale of its 850 stores to a Siberian businessman. This should also affect the ruble exchange rate.
What Next for Cryptos?
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As the era of cheap money comes to an end, so do the conditions that propelled the price of Bitcoin and other crypto assets to the dizzying highs reached at the end of last year. At the time of writing, Bitcoin was trading just above $27,000, a drop of more than 60 percent from all-time maximum of almost $69,000 touched last November.
Hope and Fear
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THE recovery on the European financial markets continued vigorously in the second half of last week. Good corporate balance sheets and low prices beat fears of war and the return of COVID lockdowns.
Crypto Thieves
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FTX and SALT will jointly present a new event, Crypto Bahamas, that will debut this week from April 26-29 at the Baha Mar resort in Nassau. The invitation-only event will feature collaboration and networking among leading investors and builders in the digital assets industry.
Stocks and wars
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“BUY when the cannons roar. Sell when the violins are playing.” This stock market wisdom comes from Carl Mayer von Rothschild (1788-1855), partner in the Frankfurt banking and trading house, M.A. Rothschild & Sons. “Be fearful when others are greedy and be greedy when others are fearful,” Warren Buffett also said.
Soaring prices
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THE US Federal Reserve apparently intends to raise interest rates significantly – and reduce the balance sheet. Fed Reserve governor, Lael Brainard, signalled this aggressive action.
The economic war
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RUSSIA’S invasion of Ukraine is not going as Vladimir Putin expected. After more than a month of fighting, Moscow’s ‘special operation’ has stalled. Despite almost 200,000 soldiers, supported by large numbers of armoured vehicles and sophisticated weaponry, Russian forces have been held back by poor planning and logistics, a fierce Ukrainian resistance, and an unusually united West, whose weapon supplies and intelligence sharing proved decisive in the unfolding of events on the ground.
Geo-monopoly
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Prices plummeted around the world after Russian troops invaded Ukraine. But no stock exchange has been hit as hard as the Moscow Stock Exchange.
Web 3.0
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“$500?” chuckled former Microsoft boss, Steve Ballmer, after Apple chief Steve Jobs introduced the first iPhone in 2007. “This is the most expensive phone in the world. And it doesn’t appeal to business users at all because it doesn’t have a keyboard.”
Stagflation fears
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FIRST came the military, then the energy shock. In 1973, it was the Yom Kippur War between Israel and the Arab states that caused oil prices to quadruple within weeks. Now it is Russia’s attack on Ukraine.
The price of war
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An invading army can win all the battles and still lose the war. The objective of a military occupation, especially one driven by imperial ambitions, is to neutralise armed resistance and secure control of the centres of power, ultimately aiming to conquer the hearts and minds of the occupied.
Europe’s energy dilemma
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Thanks to the mild winter, the European Union (EU) has enough natural gas right now. Nevertheless, some countries could face difficulties. If gas imports from Russia were not possible for years, the consequences would be more dramatic, and demand would have to be reduced.
A dangerous stand-off
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The last couple of years certainly have not been boring, at least in the sense implied by this old Chinese proverb: May you live through interesting times.
Build, build, build, stop!
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ERNEST Hemingway once wrote that bankruptcies happen gradually, and then suddenly. Such words seem appropriate to describe the fate of Evergrande, one of China’s largest real estate developers, which appears set to default on debt interest repayments.
Battle of the videostar
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FACEBOOK’S parent company, Meta (FB), has not had a bad year. Not every company can claim to have increased its sales by 37 percent in one year. The social networks, Facebook and Instagram, as well as the messenger, Whatsapp, generated almost $118bn following $86bn in the previous year. A good $29bn of that remains as profit.
The truth behind the Fed’s rate inaction
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MANY investors and analysts were caught by surprise after last week’s ‘No-Event’ from the Federal Reserve’s Open Market Committee (FOMC) meeting. The Fed’s chairman, Jerome Powell, only came with words rather than actions at last Wednesday’s press conference, where he announced the FOMC did not make any changes to short-term interest rates, even though this had been widely expected.
Stock markets on track for really tough January
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The first month of 2022 has been a challenging one for most stock market investors thus far.
Cheap money era is now likely over
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LOOKING ahead to 2022, two narratives will be hard to avoid. One is the ongoing energy crisis, which saw oil, gas and coal prices skyrocketing over the last few months. And if inflation, which to a large degree is linked to the energy crisis, proves to be a more permanent problem than previously thought, the tightening of monetary policies by some of the world’s main central banks has also taken centre stage.
Big data is big business
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A lot of investors call data the new oil or gold. But they are wrong, since data nowadays is much more valuable to all companies as it is almost irreplaceable.
Tech bubble or opportunity?
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Numerous stocks from the technology sector have recently been hit hard. Is the Opportunity there now to buy or leave it alone?
Where to in 2022?
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THE stock market year 2021 will be remembered as a good one - despite some setbacks.
Trading inflation
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THE acceleration in the rise of consumer prices of the last 8 months continues to spread.
What drives the price of bitcoin?
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Traders of bitcoin are used to sharp price action, such as the one experienced during the first weekend of December, when the digital currency lost around 20 percent of its value.
Small but mighty
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These are very small parts, sometimes no larger than a grain of rice, that are causing such great turbulence in the world economy.
Our daily bread
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All Christians in this world pray hundreds of millions of times for “our daily bread” every new day.
Keynes, Friedman and Stagflation
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Between the end of World War II and the 1970s, mainstream economics was dominated by the ideas of John Maynard Keynes, a British economist.
The Metaverse
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FACEBOOK recently changed its corporate name to Meta. This is a move that is more than just an attempt to deal with the brand erosion suffered over the last few years, as the controversy surrounding the social network increased due to hard targeting of users and accusations that its algorithms contribute to the polarisation of society through the dissemination of radical views and false information. The choice of name, Meta, hints at the future envisaged by Mark Zuckerberg for the company.
The race to go green
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“WE cannot outrun your carbon emissions. We cannot outrun the hurricanes, which are becoming more powerful, and we cannot outrun our sea levels as our islands disappear.”
Central banks love to print money
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Except for a few countries, Germany being a noticeable example where the use of physical cash to settle everyday transactions remains high due to cultural reasons, payment by electronic means is becoming more and more common.
THE ART OF THE DEAL – TRUMP’S RETURN
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WHILE mainstream in the US, the vehicle of a SPAC also found its way into Europe in the beginning of 2021 and changed the IPO (initial public offering) landscape.
The perfect storm
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There is still a shortage of containers all over the world. The ships are jammed in the ports, for example, in Los Angeles. The pandemic is disrupting global trade.
Buy the future
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Investors are buying the future on stock exchanges worldwide. Let us look into the possibly important developments and sectors for the next decade. The COVID- 19 pandemic is dividing the economy into an old and a new world. We see the following trends up to 2030 that could provide opportunities for investors:
A cold winter results in hot prizes
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The energy crisis has long since arrived in England. Long queues in front of petrol stations are no longer uncommon, and price increases are also imminent in Europe because the gas price is at a record highs.
Build, build, build - STOP!
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Ernst Hemingway once wrote that bankruptcies happen gradually, and then suddenly. Such words seem appropriate to describe the fate of Evergrande, one of China’s largest real-estate developers, that appears set to default on debt interest repayments.
Our unlikely partnership with dogs
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KNOWN as men’s best friend, dogs are undoubtedly our favourite pets. They entertain, provide company, guard our houses and even work alongside security forces, hunters and shepherds.
YOUR FAVORITE HOT DRINK IS A HOT COMMODITY
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Because of problems in the supplier countries, coffee prices have been rising for more than a year. Those who enjoy hot beverages must be prepared for worse – coffee can get significantly more expensive.
How long will the airline crisis last?
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COVID has hit the aviation industry hard. but with vaccinations progressing, airlines are optimistic and hoping for a quick recovery. That could be premature.
Why Bitcoin profits from China’s mining ban
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THE cryptocurrency Bitcoin has gained around 70 percent in value within five weeks – although China is regulating the cyber currency ever more closely. In the long term, the ban from Beijing could even stabilize the crypto market.
How will gold perform during the second half of the year?
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AUGUST 2020 was a remarkable month for gold traders, with the price of the precious metal reaching an all-time high of more than $2000 per ounce.
The world leading sand dollar
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LAST year The Bahamas became a global leader in e-money, after launching its own Central Bank Digital Currency (CBDC), the Sand Dollar, ranked number one in the PwC Global CBDC Index. A remarkable achievement for the nation, that captured headlines around the world. But what is a CBDC? Should other nations follow the example of The Bahamas? Why not instead adopt an existing cryptocurrency, like bitcoin, for example, like El Salvador did?
Inflation, structural or transitory?
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MUCH has been said about the recent escalation in consumer prices, which some see as the result of the economic boom and logistical issues arising in the aftermath of the pandemic, likely to soon start fizzling out. However, others view the situation as something more serious that is likely to linger on for years.
COFFEE AND GLOBALIZATION
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THE etymology of the word offers clues on the history and trajectory of what is, after water and tea, the most popular drink in the world; the English term coffee was adapted from the Dutch koffie, which in turn evolved from the Turkish kahve, itself based on the Arabic qahwah, which I’m told means “dark in colour”. It is believed the plant originates from Ethiopia and Sudan, while the first known reports of coffee being drunk dates from the 15th century, in Yemen, where it had arrived transported by Somali merchants.
The importance of the Olympic Games
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THE Summer Olympics finally got on the way last Friday, in Tokyo after a year’s delay caused by the pandemic.
Power and prestige from the race into space
As World War II came to an end and the rivalry between the United States and the Soviet Union grew, the space race became one of the main stages where the two superpowers competed for an intangible that often plays a crucial role in capturing the hearts and minds of domestic citizens, as well as those of government officials around the world.
The unlikely journey of gold
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EXCLUDING perhaps the collision of two neutron stars, supernovae are the most dramatic events in the universe’s vast menu of wonders; a cosmic fireworks show that occurs when stars reach the end of their lives by exploding. Such bursts last less than two minutes and can outshine entire galaxies, generating more energy than the sun will do during its entire lifetime.
The Federal Reserve hawkish pivot
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ON Wednesday June 16 the United States Federal Reserve stunned observers, announcing the intention to start rising interest rates at some point in 2023, bringing the dot plot forward by a full year.
The return of oil
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BARELY 14 months ago, oil traders were paying almost $40 to anyone willing to accept delivery of a barrel of crude by the end of May 2020. Such had been the pandemic’s impact in the demand for the black gold, that storage reached full capacity and those who, acting as middlemen, had secured large quantities of oil, were unable not just to resell it but even to keep it stored at a suitable location.
The new lust of the next generation - wealth through the stock market
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Millions of new brokerage accounts were opened worldwide last year. Young people between 20-30 are going public. They invest their money according to different standards. And the rules for long-term shareholders are also changing.
The US agency shaping all our future
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THE last four decades have been marked by exponential advances in technology, which, to a large extent, consisted of fine-tuning ideas that surfaced in the aftermath of World War II.
Fashion and the Inflation Dilemma
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EVER wondered why fashions come and go? How come skinny jeans, for example, will be trendy one season only to be frowned upon by the fashion police just a few months later?
Steps towards a greener future
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STILL unknown to most, Carbon Allowances will soon start catching headlines, gaining importance as an increasing number of countries adopt zero net carbon targets, leaving polluting businesses’ under pressure to either drastically reduce emissions or offset them through such credits, in order to avoid heavy fines or outright closing-down by authorities.
The Rise of NFTs
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THE artistic world has through the years provided many anecdotes that illustrate the subjectivity of the concept of value.
The online food boom
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THE food industry, restaurants and take-out joints, has experienced a tremendous revolution during the last two years.
Are rare earths the next big thing?
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THE commodities scene has for generations been dominated by gold and oil but as travel and power move away from combustion engines and carbon-intensive sources in favour of greener alternatives, a collection of minerals known as rare earths are becoming increasingly influential and the potential cause of trading battles.
The Football business
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ROOTED in medieval ball games and distilled through the generations of English public-school boys that played it, football association, or simply Football, as it is more commonly known (unless you’re American, in which case it’s soccer), is by far the planet’s most popular sport.
THE RETURN OF VALUE STOCKS
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SEASONED stock market investors tend to divide shares in two main categories: Momentum and Value. The latter fits into the traditional philosophy of trading by acquiring stocks that are cheap but nevertheless have the potential to outperform more glamorous (and pricier) ones - something akin to bargain hunting. (Interestingly, data analysis shows that historically cheap stocks tend to perform better than pricier ones in the long run.)
The American turbo-charged recovery
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THE US economy is currently on track to surpass previous growth expectations, as demonstrated by the latest job numbers published on Good Friday, which gave account of 916,000 new jobs created in the country during the month of March, largely exceeding the consensus forecast of 647,000.
The fragility of the monster
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BORN in 1460 in Sines, a small town on Portugal’s West coast, Vasco da Gama is one of the greatest explorers of all time. His journey by sea, from Western Europe to India via South Africa’s Cape of Good Hope, was an incredible feat of courage and seamanship. Sailing through seas never before navigated, Da Gama eventually reached the Indian port of Calicut on 20 May 1498, almost a year after setting off from Lisbon.
Gold’s role in a post-pandemic economic recovery
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Investor demand for bullion may have dimmed recently but gold’s everlasting appeal endures.
It’s never too late to change however hard the challenge
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Just around the corner from Crystal Palace in south east London is the leafy suburb of Sydenham, where street layouts haven’t changed much since Victorian times, when the young Ernest Shackleton walked them on the way home from school.
The $1.9tn American bazooka
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LAST Thursday, in the Oval Office of the White house, Joe Biden signed into law a $1.9tn stimulus package for the American economy. The final approval occurred a day earlier than had previously been announced, signalling the President’s desire to enact, without further delay, one of the top legislative objectives of his tenure.
THE GREEN AUTOMOBILE REVOLUTION
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NIKOLA Tesla, born in 1856 was a Serbian- American engineer who contributed to our modern alternating current electricity supply system. He became a well-known inventor and was noted for his showmanship at public lectures and his demonstrations to celebrities and wealthy patrons.
The object in the stars that could be a sign of alien life
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BLAISE Pascal was a 17th Century French philosopher, theologian, mathematician and physicist who created the famous Pascal’s Wager. A theory, in which he argues a rational person should live as though God exists. The principle is simple: if God really exists the believer will only suffer the loss of some terrestrial pleasures in exchange for infinite gains (eternal life in paradise); on the other hand, the non-believer stands to enjoy the limited and short term benefits of a sinful terrestrial life but will afterwards endure eternity in hell.
Inflation fears trigger higher treasury yields
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EARLIER in the year many analysts shared their predictions for how we could expect the financial markets to behave in 2021. The very large majority foresaw a continuation of the stock market rally that emerged in the aftermath of the pandemic. The underlying conditions were, after all, expected to remain in place, with protracted dovish monetary policies and robust asset purchase programmes of the main central banks dictating the course of the events.
The 21st century tulip bubble?
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THE 1600s were undoubtedly the Dutch golden age, a period during which the European country became a leading arts, science and military global power. As Holland became rich and powerful so did its citizens, with many using growing disposable incomes to invest and speculate, creating a thriving financial market where concepts such as future contracts were first traded. It was around this time that occurred one of the most famous and bizarre episodes in the history of finance: The tulip bubble.
All aboard for the market manipulation game
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First GameStop then silver shortly after, hit the front pages of the business press across the globe in the last couple of weeks.
GameStop for short sellers?
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IT was March 2010, in the aftermath of, the then, worst financial crisis since the 1930’s, when Michael Lewis, an American author and financial journalist, published his best-selling book The Big Short.
What to expect from the financial markets in 2021?
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AMONG the many twists and turns of 2020, the behaviour of the financial markets stands out as particularly fascinating and bewildering. The discrepancy observed between the state of the underlying economy and the performance of stocks and other investment assets surprised even the more seasoned observer, with major stock indices, as well as gold and Bitcoin, all reaching record highs. As Wall Street kept opening bottles of Champagne, main street struggled through an unparalleled peace-time recession characterised by record unemployment numbers and dramatic GDP contractions.
Boeing stocks take off as the 737 MAX returns
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On 29 October 2018 an aircraft flying for Indonesian carrier Lion Air, crashed into the Java sea only thirteen minutes after taking off from the Jakarta International Airport, killing all 189 passengers and crew members on board. Less than five months later, on 10 March 2019, Ethiopian Airlines flight 302 took off from Addis Ababa International with 157 people aboard. Six minutes later the plane crashed. There were no survivors. Both crashes involved brand new airplanes and happened within minutes of taking off. Also, the same aircraft model was involved: Boeing’s recently launched 737 MAX.
The goal of the century and monetary policy
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For those who feel passionately about football (soccer) and the financial markets, last Wednesday was a bitter-sweet day. Diego Armando Maradona, perhaps the world’s greatest ever footballer, passed away aged 60 following a string of health complications. On that same day, the Dow Jones stock index hit an all-time high, for the first time breaking through the 30,000 points barrier.
ActivTrades: Tech shares rally – Is it a massive bubble about to burst?
Given the economic fallout wreaked by COVID-19, it is little surprise to see the macroeconomic figures of a large majority of countries falling sharply, while many companies have reduced their target profit for this year and for 2021. Yet despite all this, US indices just reached new all-time records, with the Nasdaq in particular showing the most dramatic rally.
ActivTrades: The great markets melt-up
The financial markets have been the outstanding performers during the pandemic, seemingly benefiting from conditions that otherwise brought entire sectors of the economy to their knees.
ActivTrades: The end of the road for the dollar?
The economic and political concept of monetary hegemony was coined by the economist Michael Hudson in 1972, when he published Super Imperialism.
ActivTrades: The invisible enemy
We tend to think of ourselves, and perhaps understandably so, as the most successful species on the planet, the pinnacle of evolution determined by natural selection.
ActivTrades: Is data the new oil?
The 20th Century was the golden age of oil. The black gold, as it became known, drove the ambition of ruthless tycoons and was the reason that lead countries to war. Fortunes were made and lost and maps had to be redrawn, as oil rich regions were able to punch above their weight in terms of geostrategic importance.
ActivTrades: Lessons to learn from the Swedes softly-softly approach
While most countries around the world reacted to the COVID pandemic by imposing strict social distancing measures, often requiring the shutting down of large sectors of their economies, one nation stands out, having decided to take an alternative approach. I am of course referring to Sweden.
ActivTrades: The eternal appeal of youth
It’s becoming increasingly common to hear that 40s is the new 30s, 50s the new 40s and so on. But is it really so? Undeniably, many of us appear younger than our parents did at the same age.
ActivTrades: When the going gets tough investors turn back to old friends
Despite the mayhem caused by the coronavirus pandemic and rising Sino-American tensions, an old favourite has managed to keep its sparkle. I'm talking about gold, of course.
ActivTrades: Change may be uncomfortable but we must embrace it
Altering habits isn’t easy, there is comfort in routine and change can be painful; we have all experienced, at various points in our lives, the disruption caused by it: the first day at a new school, a relationship break-up, changing jobs, etc.
ActivTrades: The story behind the decisions that lead to war
The history of mankind, has to a large extent been that of its wars, with the winners of any conflict invariably finding themselves in the privileged position of being able to immortalize their own version of the events.
Coronavirus pandemic – the ActivTrades perspective
The coronavirus pandemic is a one in a generation event. The disruption it brought to the lives of countless individuals and businesses is unparalleled during times of peace; For the first time in several generations, life came to an almost standstill.
The importance of preparing for unknown risks
The coronavirus crisis demonstrated that countries with preparations in place to deal with a pandemic, such as South Korea, Singapore and Taiwan - despite having been among the first to suffer the impact of the virus - experienced lower numbers of cases and fatalities than others without any plan for such events. For these, the cost of unreadiness has been staggering, both in human and economic terms.
ACTIVTRADES: The faster the better - some things never change
In the distant year of 490BC a Greek messenger raced from Marathon, the site where a Greek army had just fought and beaten the invading Persians, to Athens, more than 25 miles away, to deliver the good news. Many centuries later, in 1896, this feat w
SpaceX success shows the new space race is on
IN 1957 the then Soviet Union launched Sputnik, the world’s first communication satellite, firing the starting shot for the first space race. Over the following decades the USSR and the USA were involved in a competition, with each side trying to out
How human risk-perception influences stock markets
WITH the global economy contracting at the fastest ever peacetime pace, it is bewildering to see stock markets moving in the opposite direction. So, why are investors endangering their capital at a time of such uncertainty by speculating on the perfo
Could this be the end of globalisation?
The coronavirus has created much disruption, unbalancing the pillars that sustain our way of living. This is particularly noticeable in the effect the virus-containment measures are having on globalisation. As the disease progressed from east to west
Working from home, the first coronavirus megatrend
The economic fallout from the COVID-19 containment measures is well known, with GDP contracting across the globe at a pace not seen since at least the Second World War. City centres normally effervescent with activity became almost deserted, as did t
The past, present and future of cash
Cash, in one form or another, has been around for millennia, being used as a means of payment and storing wealth. Throughout history large and small transactions have been carried out, using settlement methods that evolved in accordance with whatever
Who'll be the winners and losers in this post-COVID new world?
Speculating about what the post-COVID-19 world will be like, at a stage when we are all still experiencing the shock caused by the disease, could be compared, as someone said, with writing the review of a theatre play before the first act is over. Th
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