Why gold is still a safe haven in times of crisis
“Gold” said famed investor Warren Buffett in 1998, “gets dug out of the ground in Africa or someplace, then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” Yet for all that, we…
Irrational Exuberance on Steroids
Investors old enough to remember the bursting of the dot.com bubble at the beginning of the 21st century may recall the observation made by former Chairman of the US Federal Reserve, Alan Greenspan, that irrational exuberance explains a market driving asset valuations beyond their fundamental worth. When the March bear market abruptly ended, the emerging…
China and the US are headed towards a ‘decoupling’
But any rupture is likely to fall short of the separation the word implies. (Reading time: 4 min) The ‘Line of Actual Control’ is the name for the unformalised border that separates Indian-controlled and Chinese-controlled territory in the disputed area where the Asian neighbours meet and where in 1962 the pair fought a war. In…
Under the Radar Stocks
Former chairman of the US Federal Reserve, Alan Greenspan, is credited with coining the term “irrational exuberance” in a speech in the midst of the early days of what would morph into the dot.com bubble. The term is now widely used to describe “widespread and undue economic optimism.” Irrational exuberance can seduce investors into ignoring…
Australia needs a six-month GST holiday
Treasurer Josh Frydenberg has spent billions trying to save us from recession. The winding down of JobKeeper scheduled for September means he’ll have to spend billions more. Many of the stimulus measures talked about are focused on the traditional targets of infrastructure and residential construction. But this recession is different to previous ones. It has…
Huawei’s window of opportunity closes
When the United Kingdom completed its telecom supply chain review last year it gave a green light to Huawei by concluding that nationality-based bans did nothing to improve network security and could actually harm it by weakening competition. Executives at Huawei celebrated what they saw as a victory for evidence-based decision-making. The decision also seemed…
Apps, backed by ‘dark kitchens’, are changing food delivery
Even though the platform attack is hobbled by poor economics, restaurants are under threat – especially during a pandemic. In 2004, Matt Maloney and Mike Evans were working in Chicago as web developers for appartment.com, a platform that allows people to find rental flats online. The pair often worked late enough to order takeaway. “We…
Covid-19 tearing at the fragilities of Italy and Eurozone
Solutions to appease the crisis face political hurdles. A default or euro exit are possible. ‘il Boom’ is how Italians describe the ‘great transformation’ of Italy over the 1950s and 1960s when a poor country turned itself into a modern industrial powerhouse with a stable currency, the lira. During those decades, rural southern Italians flocked…
Recession Deniers Fading Away
At the close of the 2019 trading year, the second largest investment bank in the US – Goldman Sachs – confidently declared the US economy “all but recession proof.” Goldman now predicts 0% growth in Q1 of 2020 with negative 5% coming in Q2, although the bank along with rival JP Morgan Chase both predict…
Lessons Learned from the GFC
Earlier in the week retail investors still reading the financial news began to see analyst/expert opinions that the dramatic selloffs both here and in the US were an “overreaction” to the uncertainty about the economic impact of the current crisis. The “overreaction” continued in mid-week, with the S&P indices in both countries descending into Bear…
