David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Davis Says Britain Wants a No Change Brexit, Risking Tory Anger

    This article by Tim Ross and Alex Morales for Bloomberg may be of interest to subscribers. Here is a section: 

    The U.K. has revealed for the first time what kind of trade deal it wants businesses to have with the European Union after Brexit -- and in British eyes, nothing will change.

    Brexit Secretary David Davis said Britain will stay close to the EU’s regulatory regime after it leaves the bloc and only wants “the freedom” to go its own way if it chooses in future.

    It’s quite possible that the U.K. will decide to replicate European regulations on financial services and other areas indefinitely, he suggested.

    Davis’s comments represent the clearest statement so far on what U.K. Prime Minister Theresa May’s government is planning to do after Brexit. EU negotiators in Brussels have been calling for such clarity from the U.K. for months. However, there are signs already that Britain’s willingness to accept EU rules will infuriate the euroskeptic hardliners in her Conservative Party.

    “The aim in this whole exercise will be to maintain the maximum possible access to the European market whilst at the same time exercising our own freedom over what we are going to do in the future,” Davis said. “I see my task as creating that freedom -- how far apart we diverge will be a matter for the government thereafter.”

    This section continues in the Subscriber's Area.

    Mining Supply

    Thanks to a subscriber for this note by Jim Sinclair which refreshes the mining supply cliff argument for gold mining which has been a mainstay of the gold market for as long as I can remember at least. Here is a section: 

    Please review the charts below "Mine Supply since 1970 and Projection to 2030" produced by Dan Popescu via Thomson Reuters Eikon.  These charts indicate that in the coming years, the mine supply will be reduced by half of its supply during 2018.  Mr. Popescu is an independent gold/silver analyst whose projections in the mining supply are consistent with my own.  Few investors understand the gold industry, and the reasons for the approaching decline are numerous and industry specific.  An understanding of the gold mining industry is necessary in order to understand why the mining supply of gold is dramatically and rapidly shrinking.  Junior gold producers and new miners will have an almost impossible task to achieve what Tanzanian Royalty has already achieved thus far.  The analysis to support these charts is dry and complex subject matter, which I hope to provide in the most easily understandable read...  

    This section continues in the Subscriber's Area.

    Bond ETFs Awash in Pain May Be Red Flag for Risk Appetite

    This article by Dani Burger and Sid Verma for Bloomberg may be of interest to subscribers. Here is a section:


    “The tax package is probably giving institutional investors more confidence about the shape of corporate balance sheets,” said Matt Maley, a strategist at trading firm Miller Tabak + Co. “Thus they might be making up for the selling that is coming from these products geared towards individuals, who are worried about the rise in government yields.”

    U.S.-listed corporate bond ETFs are headed for a second consecutive month of outflows, the first time that’s occurred in at least seven years. The pain is across ratings. The iShares iBoxx Investment Grade Corporate Bond ETF, LQD, had the biggest day of losses last week since 2016, while BlackRock’s high-yield equivalent, HYG, is in the midst of its biggest two-month outflows on record.

    If the withdrawals are a symptom that retail funds are losing their taste for fixed-income, the impact could be far-reaching. A tweet from DoubleLine Capital LP co-founder Jeffrey Gundlach Thursday -- who has previously warned underperformance may portend a selloff for risk assets -- noted the gap between junk ETF prices and stock gains.

    This section continues in the Subscriber's Area.

    Musings from the Oil Patch January 23rd 2017

    Thanks to a subscriber for this edition Allen Brooks’ ever interesting report for PPHB. Here is a section:

    Indian PM Modi defends globalization at Davos summit

    This article by Paritosh Bansal for Reuters may be of interest to subscribers. Here is a section:


    Modi, making the forum’s first speech by an Indian head of state in more than two decades, did not mention Trump by name but he criticized the rise of protectionism in remarks delivered three days before the U.S. President will address the summit.

    “Instead of globalization, the power of protectionism is putting its head up,” Modi said, speaking in Hindi and causing an initial flurry in the audience of business and political leaders as people reached for their translation headsets.

    “Their wish is not only to save themselves from globalization, but to change the natural flow of globalization.”

    Modi is leading a big government and business delegation to the summit in the Swiss ski resort of Davos, aiming to showcase India as a fast-growing economic power and a potential driver of global growth.

    This section continues in the Subscriber's Area.

    Asia Bank Primer 2018

    This heavyweight 246-page report from Bank of America/Merrill Lynch may be of interest to subscribers. Here is a section:

    Please note - Bloomberg TV Interview 3PM PST

    I will be interviewed today at 3pm Pacific Time on Bloomberg TV discussing the impact of the Government shut down on markets. I’ll have a link to the interview for tomorrow’s Comment of the Day. 

    China, Unhampered by Rules, Races Ahead in Gene-Editing Trials

    This article by Preetika Rana, Amy Dockser Marcus and Wenxin Fan for the Wall Street Journal may be of interest to subscribers. Here is a section:

    In a quirk of the globalized technology arena, Dr. Wu can forge ahead with the tool because he faces few regulatory hurdles to testing it on humans. His hospital’s review board took just an afternoon to sign off on his trial. He didn’t need national regulators’ approval and has few reporting requirements.

    Dr. Wu’s team at Hangzhou Cancer Hospital has been drawing blood from esophageal-cancer patients, shipping it by high-speed rail to a lab that modifies disease-fighting cells using Crispr-Cas9 by deleting a gene that interferes with the immune system’s ability to fight cancer. His team then infuses the cells back into the patients, hoping the reprogrammed DNA will destroy the disease.

    In contrast, what’s expected to be the first human Crispr trial outside China has yet to begin. The University of Pennsylvania has spent nearly two years addressing federal and other requirements, including numerous safety checks designed to minimize risks to patients. While Penn hasn’t received final federal clearance to proceed, “we hope to get clearance soon,” a Penn spokeswoman said.

    This section continues in the Subscriber's Area.