Draghi dances daintily

“Don’t stress about wanting to know the nitty gritty of what the acronyms are, the central bank will just start buying high quality corporate bonds, exceptions include – ‘Securities issued by credit institutions and by entities with a parent company which belongs to a banking group will not be eligible.’ Or as Draghi made just as clear in the Q&A segment (see below) ‘investment grade of non-financial companies.'”


 

To market to market to buy a fat pig Mario, woohoo! I am not too sure how to make all of the sounds of those two little Italian racing drivers, who seem to wear giant mushrooms on their heads, what I do know is that Mario Draghi is far cooler than Super Mario. At least to me he is! I recall a headline in which we said something like, Mario Draghi, cool, suave, calculated, Italian of course. At the time when Draghi got the job as the ECB president, the German Finance minister Wolfgang Schauble (missing accents on the a, not good for my web publishing) said something along the lines that he was the most German of the candidates. Schauble himself has been on the job as German finance minister since 2009. He is a brave man, he is outspoken, he is a modern day political hero, how one “should” do things.

This must be my paternal grandmother speaking, she was so German that her father (my great grandfather) had fought in the trenches on the German side during world war one. My paternal grandfather fought against the German army in North Africa and Italy during the war. That is pretty awkward, not so? By that time my grandmother’s father was long gone. That was and still is Europe for you, small enough to be apart, too close together to ever fight again.

Whilst outsiders may think the European experiment is “not working” I must disagree vehemently, economic ties discourage physical conflict, nationalism must be replaced with strong economic ties. In a way the language barriers (and by extension different cultures) will remain, I do always chuckle when I see the official languages of Europe, there are 24, and according to the European Commission website, the staff tasked with translating are 600 full time and 3000 freelancers. Wow.

The European Central Bank deliver their policy meetings in English, that is the language of business globally. For anyone proficient in English in business, as all of you are who read this, it is a bit of luck that we have that opportunity. The ECB yesterday changed things up a little, announcing a corporate sector purchase programme (CSPP) to the asset purchase programme (APP) and announces changes to APP. Don’t stress about wanting to know the nitty gritty of what the acronyms are, the central bank will just start buying high quality corporate bonds, exceptions include – “Securities issued by credit institutions and by entities with a parent company which belongs to a banking group will not be eligible.“Or as Draghi made just as clear in the Q&A segment (see below) “investment grade of non-financial companies.”

You can read the press conference statement, the “thing” that Mr. Market focussed on was not that the ECB unveiled more shock and awe than initially anticipated, rather that rates were unlikely to go much lower than present. The ECB was also giving the asset purchase program a timeline which also had Mr. Market a little irritated, keep it open ended was what the Twitter thingie was saying, don’t commit to timelines that may well leave you with proverbial egg on your face.

Stocks across Europe led the charge higher initially, and then the comments about unlikely pushing deeper into negative territory was negatively interpreted. We want more! Always. The Euro swung wildly during the trading session, down against the Dollar and then up sharply again, a four percent swing from low to high. Yeah, that is right y’all, interpret that. Stocks across the ocean and far away in the US ended flat, stocks had of course a wild session, being up and then down and then up again.

It was pretty wild out there! After all was said and done, stocks in New York, New York closed flat, the blue chip Dow Jones Industrial average down a smidgen, the broader market S&P 500 up a smidgen. The nerds of NASDAQ closed down one quarter of a percent, clearly tech lagging after a spectacular year last year. YTD (that is year to date for you nerds) the NASDAQ is down nearly 7 percent, whilst the S&P 500 and the Dow Jones are down around just over two and a half percent each. And in a couple of weeks time we will be through one quarter of the year. And who said that this was a seven year anniversary of the bull market? I guess by technical definitions it is, as there has to be a drawdown of 20 percent for a bull market to cease to exist. Anyhow, looking and graphs and predicting what is going to happen next is utter idiocy, which is why I think technical analysis is dumb.


 

Linkfest, lap it up

As the saying goes, look after your pennies and the pounds will look after themselves – Swedish billionaire ‘buys all his clothes at flea markets’

The article briefly touches on the potential of hydroponics for growing crops in a city. I found it more interesting to read how land rights work in China, where farmers merely lease land from their community instead of owing the land. China is moving slowly towards more land ownership with will allow people to use the land as collateral for loans and will encourage people to develop the farm land further – An Indian bureaucrat is amazed by China’s ability to grow crops without soil

After yesterdays link on finding ways for crops to grow during droughts, one of our readers pointed me in the direction of this company, Aponic. Their system is design to grow plants vertically and use 90% less water. Great to see the direction technology is heading and how we are becoming more efficient with our resources.

The number of online users in India is expected to grow faster than any other market in the world. Online sales is expected to grow 7 fold over the next 5 years, with Flipkart currently holding 45% market share. Good news for Naspers given that they own 17% of Flipkart – The great race.

I love this article, the history in a way of how the machines replaced the people on the floors of the Chicago Mercantile Exchange: A Eulogy for the Pit Trader.

OMG! You may recognise that one, you may however have forgotten the difference between median and mean, what are metaphors and similes, you are not alone it seems: A fifth of adults have forgotten how to do fractions or percentages


 

Home again, home again, jiggety-jog. Stocks are flat to begin with, after having started the session so much better. Talk of downgrades to the banking shares due to all the South African debt they hold as part of Basil III regulations. There are talks that MTN could get their fine reduced even further and Old Mutual have formally announced their business restructuring. Sadly we have run out of time, we can cover those stories a little later! Both stocks were up and are now lower, which is a pity for the Friday bulls!


Sent to you by Sasha and Michael on behalf of team Vestact.

Email us

Follow Sasha, Michael, Byron, Bright and Paul on Twitter

078 533 1063

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s