Russian Stocks Stagnate, but Moscow Exchange Shares Soar

“One Russian issuer just bucked the trend in impressive fashion: the exchange itself. The Central Bank of Russia (CBR) last week sold a nearly 12 percent stake in MOEX in a private placement worth some $500 million at 60 rubles, or some $1.75, per share. The issue was four times oversubscribed. Aside from signaling investor demand, MOEX stressed that the transaction brought its free float above 50 percent for the first time — bucking another trend in statist Russia, where other promised privatizations have been delayed for years. The MOEX placement was arranged by Goldman Sachs Group and JPMorgan Chase & Co., along with Russia’s Sberbank and VTB Capital.”

Russian Stocks Now Cheaper Than Ever as Oil Rout Deepens

“Central bank data show net outflows from Russian assets totaled $75 billion in the first half, compared with $61 billion in all of 2013. The ruble has weakened 19 percent against the dollar this year, the second-worst performance among emerging-market currencies. ‘The market got smashed down for absurd reasons so reality is now setting in to the value there,’ Jim Rogers, who set up Quantum Fund with George Soros in the 1970s, said by e-mail from Singapore yesterday. Rogers, who said he has been bearish on the former Soviet nation for most of the time he’s been investing, said Oct. 1 that he has bought Russian ETFs and local stocks, including OAO Aeroflot and OAO Moscow Exchange.”

Jim Rogers: “Sell Everything & Run For Your Lives?”

“Erin sits down with famed investor Jim Rogers to talk about Russia, agriculture, and China. Rogers is bullish on agriculture and likes China. But he sees the Chinese purchase of the Waldorf-Astoria hotel as a top of the market kind of ‘trophy’ acquisition. Jim also comments on whether a US equity bear market is on the horizon.”

Feeling Down?


“You have been born into a time when you can communicate with thousands of people like you instantly at any time. You can leave town for the weekend and see things daily that your ancestors could not possibly have imagined. Your job is almost certainly less physically taxing than any job any of your parents, grandparents, or virtually any person who lived prior to them ever had. Statistically, you’re going to live longer and better than anyone born more than a few years before you. Entrepreneurs are busy creating and popularizing some of the first tools in history that are more useful for undermining coercion than for furthering it.  You are the 0.00001%. Live like it.”

Swiss central bank opens Singapore branch [2013]

“The Swiss National Bank opened its first overseas branch on Thursday, in Singapore, as it seeks to improve management of its huge foreign currency reserves, including more than $50 billion in Asian assets.  The SNB has accumulated over 430 billion Swiss francs ($445 billion) in foreign currency defending the 1.20 per euro cap it imposed on the Swiss franc in 2011.  The bank is looking to diversify these reserves, nearly half of which was in euros as of the first quarter of this year, partly by branching into Asian assets.  Designed to improve the round-the-clock management of the reserves, Jordan said the Singapore office will allow the bank’s traders to operate in a favourable time zone.”

Swiss central bank fights to block public vote on gold backing

“Now the SNB is fighting on a new front: to block a populist motion that would force it to almost treble the proportion of reserves held in gold.  At the end of November, Swiss citizens will vote on an initiative that calls on the central bank to hold at least 20 per cent of its assets in gold; to repatriate any gold stored abroad; and to refrain from selling any gold in future.  The initiative seeks to tap into a current of Swiss public opinion that is fiercely proud of the country’s independence, and unsettled by the economic struggles of its neighbours. The government has rejected the idea, saying last year that ‘gold no longer has any meaning for monetary policy’. Parliament voted against it by a large majority.”

The morning after: When a government destroys its currency

“This is a familiar story that repeats across history. Despite obvious warning signs, people almost universally allow themselves to ignore reality.  It’s human nature to want to believe that everything is going to be OK. And when our political leaders whisper soothing words of hope and optimism, we take the bait.  Looking back, it was plain as day that Mexico was going to devalue the peso. Everything about the economy and currency was totally unsustainable. Deep down people knew it.  Similarly, it was plain as day that Hitler was going to decimate Poland. And people knew it.  Yet millions allowed their confidence to be misplaced in leaders who assured them that everything was OK.  Are we so different?”

The Fed: Strangling the Saving Ethic and Values

“Around the time Nixon was pulling the plug on what remained of the gold standard, the personal savings rate in America was north of 12.5%. These days, it’s 5.4%, and that’s up from 2.2% in the boom year of 2005. The 2008 crash tightened people’s belts. However, prudence is not bursting out all over. The WSJ says the personal savings rate has increased ‘in large part because it counts reductions in personal debt, such as mortgages and credit-card balances, as savings’, but that most debt reduction has been driven by defaults, rather than paying back.  It’s clear that since the last tethers tying the dollar to gold were cut, money production has soared, and a casualty has been the savings ethic.”

Ex-Fed chief Bernanke denied loan to refinance his home

“Former Federal Reserve Chairman Ben Bernanke revealed last week that he was turned down when he tried to refinance his home loan.  ‘I think it’s entirely possible’ that lenders ‘may have gone a little bit too far on mortgage credit conditions,’ he said.  Bernanke also told the conference of the National Investment Center for Seniors Housing and Care that the first-time homebuyer market is ‘not what it should be.’  Bernanke was paid $199,750 annually as head of the central bank and reportedly earned $250,000 in March for his first public speaking engagement since stepping down in January.  He also reportedly received $1 million in a deal to write his memoirs.”

IMF: infrastructure spending spree last chance to revive growth

“Britain and other advanced economies should take advantage of ultra-low borrowing costs to lift spending on key infrastructure projects and boost the global recovery, according to the International Monetary Fund.  The IMF said a debt-funded investment spree could ‘pay for itself’ if projects were chosen wisely, as government spending would stimulate demand, create jobs, and support longer-term growth. However it warned against governments embarking on a blind spending spree, which would push up debt piles without stimulating growth. Spending on infrastructure would only have a positive impact if policymakers conducted ‘rigorous’ cost-benefit analyses.”