ILF

Not Doom and Gloom – But Just Cautious…

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You wouldn’t know it on the basis of the strong US market action January 26, but it wasn’t all quiet in overnight trading. Local markets in China (FXI) took another hit, with Shanghai and Shenzhen exchanges experiencing declines to the magnitude of 6%-7%+ on the session. Though some optimistically dismiss the local China markets as irrelevant, the implications on weakened Chinese banks, other Asian nations via trade, and interconnected financial institutions from Standard Charted to HSBC (HSBC) and even Citigroup (C) are material, in our view, and we’re paying close attention. Some may even say that China stocks represent less than 15% of household financial assets in the country — certainly not enough to cause a global calamity… Or is … Read more

Things Are So Bad They’re Actually Good?

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Brazil’s (EWZ) economy, nearly 60% of South America’s (ILF) gross continental output, entered into technical recession following the second consecutive quarter of GDP declines, the latest reading a fall of nearly 2%. Economic data assessing the health of Brazil’s largest South American trade partner, Argentina (ARGT), remains “flawed”, according to the International Monetary Fund, which believes the country will only grow marginally in 2015 and remain stagnant in 2016. Including contributions from Venezuela, which is dealing with near-hyperinflation, the combined gross national product of the three struggling countries accounts for approximately three-fourths of South America’s entire economy. Though less than half the size of Brazil’s, Canada’s (EWC) economy has also fallen into recession during the first half of the year, … Read more

Markets Collapse: Economic Sanctions on Russia, Argentina Defaults…Again

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Dow Jones falls over 300 points Thursday on Argentina default and economic sanctions on Russia. The very idea that we don’t know which hedge funds will be hurt by recent global economic activity, how leveraged these hedge funds are to global currencies and equities, and whether Russian president Vladimir Putin will respond in kind to economic sanctions means conservative investors are taking money off the table. Is it finally time to lock in profits after one of the best stock-market runs of all time from the March 2009 lows? First, the EU and US impose economic sanctions on Russia. Next, Argentina defaults on its debt for the second time in 12 years, bringing back memories of the infamous collapse of … Read more