Eoin Treacy's view

A link to today's video commentary is posted in the Subscriber's Area. 

Some of the topics discussed include: banks break lower again, AI beneficiaries short-term overbought, gold firms, oil eases, bond yields contracting in preparation for a deflationary shock. 

“As we keep on telling our LPs, we are not alternative anymore,” said Lockhead. “Every deal that gets done, private credit is in the mix.”

Eoin Treacy's view

Regulatory arbitrage is one of the commonest ways new financial sector solutions thrive. For example, Alibaba circumvented China’s wide difference between the lending and deposit rate by going direct to consumers via the internet and created Ant Financial. When regulators felt threatened by the company they move to contain its growth.

The fintech sector is attempting to carve a piece out of traditional banking operations by going online and direct to consumer via mobile apps. Companies like Block and PayPal avoid banking regulation but offer credit services in the same ways as credit card companies.

The cryptocurrency sector is primarily aimed at further disrupting the payments and international transfer market.

Private lending and private equity more generally thrived in a falling interest rate environment because asset prices of all varieties rose. Active markets were created in everything from businesses to fine wine and whiskey.  

WeChat’s fledgling short-video feed has been a rare bright spot in Tencent’s portfolio. The company is under pressure to better monetize China’s most ubiquitous app, just as users and marketers flee to rivals like ByteDance. WeChat’s video accounts tripled in views last year, garnering more than 1 billion yuan of ad sales through the feature in the fourth quarter.

“The ads turnaround is pretty positive, showing that WeChat video accounts is a real opportunity for Tencent,” said Vey-Sern Ling, senior equity advisor for Asia technology at Union Bancaire Privee. “New approvals of game titles for the domestic market could also help growth this year.”

Eoin Treacy's view

It’s unlikely Xi Jinping is suddenly going to reverse his suspicion of the video gaming industry but there are clearly efforts underway to boost confidence that capricious policy changes will be well telegraphed in future. 

Hardly. The world’s population of people aged 60 years and older is expected to double by 2050, according to the World Health Organization, while fertility rates are in long-term decline. The financial strain is challenging old-age support systems and leaving many countries facing tough choices about raising the age of retirement, cutting benefits or lifting taxes. Pension shortfalls will be the equivalent of about 23% of world output by 2050, the Group of 30 consultancy estimated. One key measure is the old-age dependency ratio — the number of older people compared to the population that is working age. In Europe and North America, that ratio will be about 50 per 100 by 2050, according to UN forecasts, a rise from 30 per 100 in 2019. In short, we’re on a trajectory toward a smaller share of people paying taxes and a higher proportion drawing pensions. By 2035, the basic US system known as Social Security will no longer be able to cover payments, forcing a 20% reduction in benefits, according to its trustees. 

Eoin Treacy's view

Very few people are keen on the idea of working more than they have to. That has been one of the primary selling points of union negotiators for decades. You might not like your job, but we’ll make sure you are looked after in your (lengthy) retirement. With union workers negotiating favourable terms, government pensions have also become more generous. 

Eoin Treacy's view

One of the questions subscribers ask most often is how to find details of my open trades. To make it easier I will simply repost the latest summary on a daily basis until there is a change.