17-10-18 Blotter

©2017 Cantillon Consulting Sarl - www.cantillon-consulting.ch 40 Money, Macro &
Markets Monitor Insight & Support for the Managers of Wealth October 11h 2017

Markets Monitor Insight & Support for the Managers of Wealth October 11h 2017

Markets Monitor Insight & Support for the Managers of Wealth October 5th 2017

Markets Monitor Insight & Support for the Managers of Wealth October 7th 2017 As much as we chart jockeys all love drawing grand conclusions from the FOF accounts, look at the scale of the known unknowns here. Then consider that the underlying BEA data itself includes phantom ‘imputations’ of 20-30% of the constituent line items and the unknown unknowns loom larger still.

Markets Monitor Insight & Support for the Managers of Wealth October 9 th 2017

©2017 Cantillon Consulting Sarl - www.cantillon-consulting.ch 51 October 4th 2017
From the Post-Lehman low, this expansion has run at some 17.5% annualized – a rate similar to those enjoyed during the two great expansions of 1942-66 (16.0%CAR) and 1982-2000 (18.3% CAR). Note that each of thee prior expansions has been interspersed by a lengthy period of zero nominal growth and hence of falling real returns. If it could maintain the current pace, the index would close its ~23% gap to the extrapolation of that 80-year trend, in just under three year’s time, but would need an absolute rise of 60% to do so.

Money, Macro & Markets Sean Corrigan Asset Allocation: Stocks v
Bonds v Commodities 52 Wednesday, October 4th

Even allowing for equities’ trend appreciation in relation to commodities, they have only ever been more expensive at the height of the Tech Bubble, around the turn of the millennium

Similarly, US fixed income has enjoyed an extreme period of outperformance over this same, four-decade horizon. A reversion to the mean is hardly inconceivable, therefore.

In the past half-century, rolling three year correlations between bond returns and commodity prices have been negative for around 85% of the time, a proportion which increases to around 95% over the past three decades.

By contrast, those with equity returns have been negative less than 60% of the time – and for less than 40% of the overlapping 3-year samples in the last twenty years

US Goods (top) & Services (bottom) Job dynamics, ‘000s: Source - BLS

Much is made of the crushing burden of student debt in the US – now in excess of $1.4 trillion. But if one adjusts for both currency and population size (roughly 6:1) - as here on our chart – the UK total of £100bln is now over half as big and is growing more than twice as quickly. Further scale to adjust for differences in median household income [the UK’s £26,300 x $1.25 = $32,875 v America’s $59,000] - ergo by a further 1.8:1 - and the numbers are nigh-on equal. No wonder Labour leader Corbyn’s irredeemable pledge to eradicate their debt – itself largely the product of his predecessors’ ‘reforms’ - was so successful in buying student votes at the last election.

Sean Corrigan www.cantillon-consulting.ch

Markets Monitor Insight & Support for the Managers of Wealth September 4th 2017 Disclaimer All content is intended to give general advice only. The investments and instruments mentioned therein are not necessarily suitable for every individual and you should use this information in conjunction with other advice and research to determine its suitability for your own circumstances and risk preferences. The value of all securities and investments, as well as the income derived from them, can fall as well as rise. Your investments may be subject to sudden, often substantial, declines in value which may not be recoverable; others may expire worthless after a specified period. You should not buy any of the securities or other investments mentioned with money you cannot afford to lose. In some cases there may be significant charges which may reduce the value of your investment. You run an extra risk of losing money when you buy shares in certain securities where there is a large difference or ‘spread’ between the buying price and the selling price, a circumstance which means that, should you sell them immediately, you may get back much less than you paid for them. In the case of investment trusts and certain other funds, these may use or propose to use the borrowing of money in order to increase the size of their exposures and/or invest in other securities with a similar strategy. As a result, movements in the price of the securities may be more volatile than the movements in the prices of those underlying investments. Some investments may involve a high degree of such borrowing (often referred to as ‘gearing’ or ‘leverage’) This means that a small movement in the price of the underlying asset may have a disproportionately large effect on that of your investment. Accordingly, a relatively small adverse movement in the price of the underlying asset can result in the loss of the entirety of your original investment. Changes in rates of exchange may have an adverse effect on the value or price of the investment and you should be aware that additional dealing, transaction, and custody charges for certain instruments may result when these are not traded in your home currency. Some investments may not be quoted on a recognised investment exchange and, as a result, you may find them to be ‘illiquid’. You may not easily be able to trade your illiquid investments and, in certain circumstances, it may become difficult, if not impossible to sell the investment in a timely manner and/or at its indicative price. Investment in any of the assets mentioned may have tax consequences regarding which you should consult your tax adviser. All reasonable care has been taken to ensure that all statements of fact and opinion contained in the either written or spoken form are fair and accurate in all material respects. All data is from sources considered to be reliable but its accuracy cannot be guaranteed. Investors should seek appropriate professional advice if any points are unclear. Copyright ©2017 Cantillon Consulting Sàrl. Any disclosure, copy, reproduction by any means, distribution, or other action which relies on the contents of such materials, made without the prior written consent of Cantillon Consulting, is strictly prohibited and could lead to legal action.

Money, Macro & Markets Sean Corrigan China: Another crack in
the dam 74 Thursday, September 28th

©2017 Cantillon Consulting Sarl - www.cantillon-consulting.ch 75 September 28th 2017
This is an important series of charts which we have shown several times of late…

…but this is perhaps the one to which investors in China itself should perhaps pay most attention THOSE WISHING TO ENGAGE OUR SERVICES OR SEEKING INFORMATION ON WHAT WE OFFER SHOULD CONTACT US AT: info[at]cantillon-consulting.ch

SUMMARY The fruits of a lengthy exercise of full intellectual
independence, trading in, commenting upon, and analysing markets, placed fully at your disposal to help enhance your investment process. Dedicated personal interaction, as well as written assessments, to enliven the debate and to mitigate risks by broadening the circle of opinion. Detailed macro/market research with the possibility of undertaking special commissions upon request. Ideas and arguments to incorporate into your existing framework of client communication or to present as the stand-alone opinion of one of your firm’s expert counsellors. Assistance with content for reporting, proposals, marketing, etc. Education and training. Public speaking to entertain and inform you and your invited guests. www.cantillon-consulting.ch Copyright ©2017 Cantillon Consulting Sàrl

For the technically-minded, a break of 3300 by the Shanghai Composite opens up firstly a 50% retracement of the last 5-months’ run to 3200 and secondly a deeper reversion to its starting point – also the 2016-17 mid – at close to 3000 for a >10% correction

Money, Macro & Markets Sean Corrigan Briefing Notes: Forget the
Fed, ponder the PBoC 81 Sunday, September 23rd

©2017 Cantillon Consulting Sarl - www.cantillon-consulting.ch 82 September 23rd 2017
Compared to the position before the crash, US Banks have ~$1 trillion more in cash (principally IOER earning reserves) in relation to Total Assets than they did before QE started. These stand at a three- decade percentage high

And, whisper it, but the Fed has already effectively reduced its balance sheet by $200 billion or so, thanks to the reserve absorbing tools it has at its disposal. ‘QT’ could simply reduce these elements pro rata with security sales/maturities if it wished to be cautious FRB Balance Sheet Net of GSE/Depository Inst Claims v QII’2014 Peak: Source - FRB

…and real money supply growth is still comfortably above recessionary levels. Despite all that, nominal money supply growth has been arrow-straight and on the long term trend for the past 4 ½ years

Loan and TSF growth is hitting new (arithmetic) highs even as deposit growth slows sharply

That combination has pushed the MARGINAL Loan-to-Deposit ratio to a worrisome 100%

SUMMARY The fruits of a lengthy exercise of full intellectual
independence, trading in, commenting upon, and analysing markets, placed fully at your disposal to help enhance your investment process. Dedicated personal interaction, as well as written assessments, to enliven the debate and to mitigate risks by broadening the circle of opinion. Detailed macro/market research with the possibility of undertaking special commissions upon request. Ideas and arguments to incorporate into your existing framework of client communication or to present as the stand-alone opinion of one of your firm’s expert counsellors. Assistance with content for reporting, proposals, marketing, etc. Education and training. Public speaking to entertain and inform you and your invited guests. www.cantillon-consulting.ch Copyright ©2017 Cantillon Consulting Sàrl

M1 is below trend and slowing sharply from last summer’s post-Crash highs (better not to ask about the other components of M2!)

The effects of that deceleration will ripple across the economy, if continued

Markets Monitor Insight & Support for the Managers of Wealth July 11th 2017 Disclaimer All content is intended to give general advice only. The investments and instruments mentioned therein are not necessarily suitable for every individual and you should use this information in conjunction with other advice and research to determine its suitability for your own circumstances and risk preferences. The value of all securities and investments, as well as the income derived from them, can fall as well as rise. Your investments may be subject to sudden, often substantial, declines in value which may not be recoverable; others may expire worthless after a specified period. You should not buy any of the securities or other investments mentioned with money you cannot afford to lose. In some cases there may be significant charges which may reduce the value of your investment. You run an extra risk of losing money when you buy shares in certain securities where there is a large difference or ‘spread’ between the buying price and the selling price, a circumstance which means that, should you sell them immediately, you may get back much less than you paid for them. In the case of investment trusts and certain other funds, these may use or propose to use the borrowing of money in order to increase the size of their exposures and/or invest in other securities with a similar strategy. As a result, movements in the price of the securities may be more volatile than the movements in the prices of those underlying investments. Some investments may involve a high degree of such borrowing (often referred to as ‘gearing’ or ‘leverage’) This means that a small movement in the price of the underlying asset may have a disproportionately large effect on that of your investment. Accordingly, a relatively small adverse movement in the price of the underlying asset can result in the loss of the entirety of your original investment. Changes in rates of exchange may have an adverse effect on the value or price of the investment and you should be aware that additional dealing, transaction, and custody charges for certain instruments may result when these are not traded in your home currency. Some investments may not be quoted on a recognised investment exchange and, as a result, you may find them to be ‘illiquid’. You may not easily be able to trade your illiquid investments and, in certain circumstances, it may become difficult, if not impossible to sell the investment in a timely manner and/or at its indicative price. Investment in any of the assets mentioned may have tax consequences regarding which you should consult your tax adviser. All reasonable care has been taken to ensure that all statements of fact and opinion contained in the either written or spoken form are fair and accurate in all material respects. All data is from sources considered to be reliable but its accuracy cannot be guaranteed. Investors should seek appropriate professional advice if any points are unclear. Copyright ©2017 Cantillon Consulting Sàrl. Any disclosure, copy, reproduction by any means, distribution, or other action which relies on the contents of such materials, made without the prior written consent of Cantillon Consulting, is strictly prohibited and could lead to legal action.

Money, Macro & Markets Sean Corrigan USA: Gearing up for
Trouble 94 Wednesday, September 20th

Markets Monitor Insight & Support for the Managers of Wealth September 20th 2017

Money, Macro & Markets Sean Corrigan USA: Gearing up for
Trouble 109 Tuesday, September 19th

Markets Monitor Insight & Support for the Managers of Wealth September 19th 2017 CAR 4.4% CAR 4.5% CAR 6.7% CAR 5.6% For the typical manufacturing company, debt service is hardly onerous at present, thanks to the persistence of Depression Era levels of interest rates, long and short. However, it is surely a matter of some concern that, though having recovered from last year’s ‘hidden’ recession, both revenues and operating income have barely attained their trend levels of the entire floating-rate era. This means that they are each growing more slowly than the above-trend pace of debt addition – that latter increase obviously exacerbated by the urge to replace equity (another line item increasing at a sub-par rate as a consequence) with ever more borrowed money.

Markets Monitor Insight & Support for the Managers of Wealth September 19th 2017 The combination has naturally served to raise already-elevated debt ratios – with Net Debt/EBITDA making new highs in a highly atypical manner since this is not being driven involuntarily by a recession-induced collapse in the denominator, but by an entirely discretionary increase in the numerator. As a result, while returns to equity may look acceptable, those to total capital are clearly on the wane - to the not entirely coincidental accompaniment of overly low bond yields. The central bank Doom Loop - mistaken by some for that mythical beast, ‘secular stagnation’ - is truly alive & well.

Markets Monitor Insight & Support for the Managers of Wealth September 19th 2017 The recovery in the price of commodities – principal among them, that of shale oil – has restored a modicum of respectability to the extractive sector’s scorecard, albeit only after the loss of a decade’s worth of returns. Note, too, that debt ratios are still above those seen during the late-90s oil price collapse, if no longer as bad as those of the mid-80s disaster. THOSE WISHING TO ENGAGE OUR SERVICES OR SEEKING INFORMATION ON WHAT WE OFFER SHOULD CONTACT US AT: info[at]cantillon-consulting.ch

Markets Monitor Insight & Support for the Managers of Wealth September 19th 2017 Meanwhile, if not as extreme as in ‘higher-order’ manufacturing, a similar phenomenon is at work in the wholesale and retail sectors. Rising debt ratios amid a modest expansion are not to be taken lightly here, either. By way of illustration of how endemic this all is, our last chart shows that even the Industries of Tomorrow are not immune from this affliction. Moore’s Law may have met its match in Miller-Modigliani, Mario & MIT macro While there are few generalized signs of distress at present, it is all too apparent that many companies will sail into the next set of stormy seas with a good deal of sprung planking, strained bulwarks and some very frayed rigging, indeed.

Money, Macro & Markets Sean Corrigan USA: Was the Payroll
report ‘weak’? 119 Monday, September 4th

Markets Monitor Insight & Support for the Managers of Wealth September 4th 2017 We must always resist overanalysing the too-many-moving-parts NFP report but, taken at face value, far from being ‘weak’, the past three months have seen a return to recovery-average job additions accompanied by a marked acceleration in per capita wages earned.

Markets Monitor Insight & Support for the Managers of Wealth September 4th 2017 The latter has, in fact, opened up a statistically notable discrepancy with the numbers pertaining to the sector as reported by the BEA. If the BLS version proves to be the more representative, that would imply an appreciable upward revision to personal income and possibly the savings rate is in the offing. THOSE WISHING TO ENGAGE OUR SERVICES OR SEEKING INFORMATION ON WHAT WE OFFER SHOULD CONTACT US AT: info[at]cantillon-consulting.ch

Markets Monitor Insight & Support for the Managers of Wealth September 4th 2017 Adding some credence to the case, the ISM report for manufacturing was again a strong one, signalling the best conditions in six years and, barring the relief rally bounce out of the GFC trough, the most upbeat in more than twice that stretch. Regular readers will know that we contend that such surveys primarily tend to reflect revenue growth (the most readily perceptible change for a business manager to register). As such, this might be a portent that the past five months of relative stagnation on that latter score (partly driven by softer energy prices) has finally come to an end. Since we can also map accelerations in revenue (and ultimately in NGDP) with increases in the Fed funds rate, ceteris paribus (and ergo ex-Harvey) this would put the FOMC back in the game, contrary to much current belief.

Markets Monitor Insight & Support for the Managers of Wealth September 4th 2017 To add a little nuance to the aggregates, an obvious area of recent torpor has been private construction spending – which has barely budged in nine long months. Without getting too ‘Broken Window’ about the matter, THAT is presumably about to change, thanks to the poor unfortunates in Houston…. ….Conversely, the formerly lamentably weak capital goods sector seems to be enjoying a welcome renaissance: the first sign that a tighter labour market is having an impact on corporate decision-making perhaps?

Markets Monitor Insight & Support for the Managers of Wealth September 4th 2017 So, in summary, we have some aspects of the macro data telling us that things are as good as they have been these past six years, yet real (and nominal) UST yields remain locked in the middle of the lowly range traced out since then and corporate debt has dropped to the lower deciles of its distribution, effectively into Great Depression, capped-benchmark territory. No wonder then that stock prices are so elevated and still better bid for choice. Wilfully mispriced fixed income explains a multitude of evils. Graphs courtesy of Bloomberg

Markets Monitor Insight & Support for the Managers of Wealth August 21st 2017

©2017 Cantillon Consulting Sarl - www.cantillon-consulting.ch 130 August 21st 2017
1990-2017 2009-2017 VALUE LINE

Sean Corrigan www.cantillon-consulting.ch

Money, Macro & Markets Sean Corrigan Whatever they’re selling, I’m
buying 132 Tuesday, September 5th

Markets Monitor Insight & Support for the Managers of Wealth September 3rd 2017 We went bullish on copper back at the end of July with COMEX prices in the $2.60s. Now, 15% higher, within ~5% of a full 50% retracement of 2011-16’s 60% slump, and after a 7-sigma build in spec longs, it might just be time to quit.

Money, Macro & Markets Sean Corrigan China: Is the tide
turning? 136 Monday, Aug 21st

Markets Monitor Insight & Support for the Managers of Wealth August 21st 2017 When China first started losing forex reserves in the latter half of 2014, the impact was initially to shrink the monetary base and so to tighten domestic conditions. Before long, however, the PBoC began countering the drain by adding copious amounts of liquidity (the steep rise in the ‘other claims’ category, q.v.) - particularly once the stock bubble collapsed 2 years ago. Spurred on by this, banks’ own money creation efforts hit unheard-of heights, swelling M1+ by no less than CNY1 trillion- a-month in the run-up to last summer. Commodity prices responded in due course; producer prices in general surged with them and – perhaps of greatest import – the real estate bubble expanded ever more rapidly. Though still elevated, note that the magnitude of such additions is now dwindling (ergo the percentage change is falling even more dramatically).

Markets Monitor Insight & Support for the Managers of Wealth August 21st 2017 Here, we add to the previous chart a look at what has been happening on the asset side of bank balance sheets (as well as beyond that, out in the ‘shadow’ system). Note that, at last year’s peak, ALL new loans were generating M1 holdings. i.e., NOTHING was being devoted to savings, only to what are implicitly transactional accounts. When credit expansion cannot generate even ex-post, ‘forced’ savings to mitigate its impact, the price inflationary impact is at its greatest. Recent months, however, have seen a partial cooling as M1 additions have lessened. The fact that the pace of both loan and shadow increments has simultaneously increased, means that other sources of funds are being utilized to a greater degree, notably those originating from foreigners, the bond market, and the PBOC itself. urtesy: erg

Markets Monitor Insight & Support for the Managers of Wealth August 21st 2017 As the deceleration has progressed, the PMI has shown its expected downward response. In due course, company revenues - and ultimately profits - will follow if this is long maintained. Greater recourse to receivables financing (funded partly by recourse to shadow finance) can delay full recognition of this awhile, but it cannot fail to impair either the magnitude or the quality of earnings as it works through the economy. PLEASE ADDRESS ALL QUESTIONS REGARDING OUR SERVICES TO info[at]cantillon- consulting.ch

Markets Monitor Insight & Support for the Managers of Wealth August 21st 2017 In constructing this series of residential real estate prices, we are well aware of the annoyingly variable impact of the Lunar New Year, as well as issues regarding the homogeneity of coverage in the official statistics. We are also fully cognizant of the noise created by the incessant ‘macro- prudential’ meddling which is applied to China’s property markets. That said, we think this is reasonably representative of the broader trends, especially in more recent years when – once again – the link to the laxity or tightness of monetary conditions is only too evident. One thing to note: the likely causality is that the urge to buy property encourages banks to lend and the new credit granted to that end then ends up swelling new, re-spendable money on the other side of the ledger as a result.

©2017 Cantillon Consulting Sarl - www.cantillon-consulting.ch 141 August 21st 2017
It is hard to argue that these trends do not continue to play a determining role in industrial commodity pricing, especially in that king of all speculative contracts, steel rebar. Follow the money!

Markets Monitor Insight & Support for the Managers of Wealth August 21st 2017 Disclaimer All content is intended to give general advice only. The investments and instruments mentioned therein are not necessarily suitable for every individual and you should use this information in conjunction with other advice and research to determine its suitability for your own circumstances and risk preferences. The value of all securities and investments, as well as the income derived from them, can fall as well as rise. Your investments may be subject to sudden, often substantial, declines in value which may not be recoverable; others may expire worthless after a specified period. You should not buy any of the securities or other investments mentioned with money you cannot afford to lose. In some cases there may be significant charges which may reduce the value of your investment. You run an extra risk of losing money when you buy shares in certain securities where there is a large difference or ‘spread’ between the buying price and the selling price, a circumstance which means that, should you sell them immediately, you may get back much less than you paid for them. In the case of investment trusts and certain other funds, these may use or propose to use the borrowing of money in order to increase the size of their exposures and/or invest in other securities with a similar strategy. As a result, movements in the price of the securities may be more volatile than the movements in the prices of those underlying investments. Some investments may involve a high degree of such borrowing (often referred to as ‘gearing’ or ‘leverage’) This means that a small movement in the price of the underlying asset may have a disproportionately large effect on that of your investment. Accordingly, a relatively small adverse movement in the price of the underlying asset can result in the loss of the entirety of your original investment. Changes in rates of exchange may have an adverse effect on the value or price of the investment and you should be aware that additional dealing, transaction, and custody charges for certain instruments may result when these are not traded in your home currency. Some investments may not be quoted on a recognised investment exchange and, as a result, you may find them to be ‘illiquid’. You may not easily be able to trade your illiquid investments and, in certain circumstances, it may become difficult, if not impossible to sell the investment in a timely manner and/or at its indicative price. Investment in any of the assets mentioned may have tax consequences regarding which you should consult your tax adviser. All reasonable care has been taken to ensure that all statements of fact and opinion contained in the either written or spoken form are fair and accurate in all material respects. All data is from sources considered to be reliable but its accuracy cannot be guaranteed. Investors should seek appropriate professional advice if any points are unclear. Copyright ©2017 Cantillon Consulting Sàrl. Any disclosure, copy, reproduction by any means, distribution, or other action which relies on the contents of such materials, made without the prior written consent of Cantillon Consulting, is strictly prohibited and could lead to legal action.

Markets Monitor Insight & Support for the Managers of Wealth August 15th 2017 TWI trendline. The big question now: was the SNB involv ‘nudging’ it along as it turned? All eyes on tomorrow’s sight deposit data… Sean Corrigan [email protected] urtesy: erg 25-delta risk re outright (top) & a (lower)

©2017 Cantillon Consulting Sarl - www.cantillon-consulting.ch 148 August 15th 2017
TWI trendline. The big question now: was the SNB involv ‘nudging’ it along as it turned? All eyes on tomorrow’s sight deposit data… Sean Corrigan [email protected] urtesy: erg 25-delta risk re outright (top) & a (lower)

©2017 Cantillon Consulting Sarl - www.cantillon-consulting.ch 149 August 15th 2017
TWI trendline. The big question now: was the SNB involv ‘nudging’ it along as it turned? All eyes on tomorrow’s sight deposit data… Sean Corrigan [email protected] urtesy: erg 25-delta risk re outright (top) & a (lower)

Markets Monitor Insight & Support for the Managers of Wealth August 16th 2017 (1) With this much oil slopping around, why is the curve so flat…. (2)…and why are longs building again? (3) One reason is shale patch hedging, here seen driving the skew lower… (4)…another, that it’s not the level of inventory, so much as the speed of decline that now has the Specs drooling. Sean Corrigan [email protected] Net spec longs WTI & Brent Graphs courtesy: Bloomberg

Markets Monitor Insight & Support for the Managers of Wealth July 30th 2017 Swissy has just undergone its biggest 4-day decline since the aftermath of the SNB’s removal of its floor, 2 ½ years ago, in a 3.7 sigma move to a new low for the period. In terms of the ‘risk-reversal’ options skew v the USD, this involved a hefty 8.7% swing from bullish to neutral and has probably further extended the retreat from May’s near decade-high 43% bullish position on the IMM. Additionally, it has broken the last decade’s upward TWI trendline. The big question now: was the SNB involved in ‘nudging’ it along as it turned? All eyes on tomorrow’s sight deposit data… Sean Corrigan [email protected] Graphs courtesy: Bloomberg 25-delta risk reversal outright (top) & as % of vol (lower)

Markets Monitor Insight & Support for the Managers of Wealth August 14th 2017 Another solid read from Japan with GDP posting a 4% annualized gain which was the best in over 2 years. Better yet, the private component continued its sparkling run of the past 18 months, hitting new highs and registering a 2.5% CAR which is the best for a similar stretch since early 2014 and (GFC rebound aside) something you need to go back to 2006 to see previously equalled. Even Nominal GDP is now only a whisker off beating 2007’s highwater mark, as a result. GDP per capita is, of course, stronger still. As the main graph (left) shows, private non-residential investment played a big part in the rise; largely driven, one suspects, by the pressing desire to substitute capital for a shrinking supply of labour. Whisper it, but residential investment has also broken up out of its Lost Decades downswing (bottom, left). Sorry, Secular Stagnationists, but this combination means that real interest rates would now be rising, were they free to do so. It also implies that aggregate profits should be enhanced, giving stocks a chance to push fixed income to the bottom of the post-Asian Contagion band in relative terms (below). Graphs courtesy: Bloomberg Sean Corrigan [email protected]

Markets Monitor Insight & Support for the Managers of Wealth August 3rd 2017 Waves of over-enthusiasm (and their converse) can be broadly identified in equity markets when stock prices roar away (fall) in relation to the scale of investment being made in the means with which to ensure those juicy future earnings which everyone is so eagerly discounting DO actually grow as predicted. Please address any questions to:- [email protected] I shall also be happy to discuss ways in which you can assure yourself of such insights on a more regular basis After all, why pay to increase your productive capital stock when you can instead play jiggery-pokery with your financial capital by selling the firm in instalments to your creditors?

Markets Monitor Insight & Support for the Managers of Wealth July 26th 2017 Courtesy: Bloomberg USD blns The marked waning of enthusiasm for gold and silver has the Bears salivating instead. Now showing record gross spec short value and a $43.5 billion shift from last summer’s wildly premature bullishness. Position

Markets Monitor Insight & Support for the Managers of Wealth July 26th 2017 Alarm bells should be ringing as currency-adjusted Sotheby’s goes – well, er – BID, thus signalling, in its inimitable fashion, the fact of too much easy money seeking a outlet in art and other fripperies Courtesy: Bloomberg 3mmaYOY% JAPAN TECH 1.0 WORLD TECH 2.0 CHINA

Markets Monitor Insight & Support for the Managers of Wealth August 4th 2017 Admittedly not much margin for error on the old Greenback here, what with yield differentials and relative equity valuations seemingly having peaked and – well - the Donald! But note that the last two years’ range trade has moved the longest line UP for the first time in a long while (on several timescales). This is usually a sign of a stronger medium-term market, as per the cyclical indicators which hint at a 2019/20 top. That said, the awful coincidence of the two 45% runs during Tech Bubbles 1.0 & 2.0 does make one fear the drop if the current NFP bounce gets sold. Courtesy: Bloomberg 3mmaYOY% TECH 1.0 TECH 2.0 Sean Corrigan USD TWI

Markets Monitor Insight & Support for the Managers of Wealth July 11th 2017 Disclaimer All content is intended to give general advice only. The investments and instruments mentioned therein are not necessarily suitable for every individual and you should use this information in conjunction with other advice and research to determine its suitability for your own circumstances and risk preferences. The value of all securities and investments, as well as the income derived from them, can fall as well as rise. Your investments may be subject to sudden, often substantial, declines in value which may not be recoverable; others may expire worthless after a specified period. You should not buy any of the securities or other investments mentioned with money you cannot afford to lose. In some cases there may be significant charges which may reduce the value of your investment. You run an extra risk of losing money when you buy shares in certain securities where there is a large difference or ‘spread’ between the buying price and the selling price, a circumstance which means that, should you sell them immediately, you may get back much less than you paid for them. In the case of investment trusts and certain other funds, these may use or propose to use the borrowing of money in order to increase the size of their exposures and/or invest in other securities with a similar strategy. As a result, movements in the price of the securities may be more volatile than the movements in the prices of those underlying investments. Some investments may involve a high degree of such borrowing (often referred to as ‘gearing’ or ‘leverage’) This means that a small movement in the price of the underlying asset may have a disproportionately large effect on that of your investment. Accordingly, a relatively small adverse movement in the price of the underlying asset can result in the loss of the entirety of your original investment. Changes in rates of exchange may have an adverse effect on the value or price of the investment and you should be aware that additional dealing, transaction, and custody charges for certain instruments may result when these are not traded in your home currency. Some investments may not be quoted on a recognised investment exchange and, as a result, you may find them to be ‘illiquid’. You may not easily be able to trade your illiquid investments and, in certain circumstances, it may become difficult, if not impossible to sell the investment in a timely manner and/or at its indicative price. Investment in any of the assets mentioned may have tax consequences regarding which you should consult your tax adviser. All reasonable care has been taken to ensure that all statements of fact and opinion contained in the either written or spoken form are fair and accurate in all material respects. All data is from sources considered to be reliable but its accuracy cannot be guaranteed. Investors should seek appropriate professional advice if any points are unclear. Copyright ©2017 Cantillon Consulting Sàrl. Any disclosure, copy, reproduction by any means, distribution, or other action which relies on the contents of such materials, made without the prior written consent of Cantillon Consulting, is strictly prohibited and could lead to legal action.

17-10-18 Blotter

17-10-18 Blotter

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