There is no doubt David Cameron dodged a bullet last month when the House of Commons was called to vote on the referendum on Britain’s membership of the European Union. The vote only concerned a belated expression of regret that a bill to make a referendum possible had not been included on the current parliamentaryContinue Reading

Will the DAX undergo a Nikkei-style slump? 5 June 2013. FRANKFURT (Börse Frankfurt). Equity investors have spent a great deal of time pondering the outlook for global bond markets over the past week. The catalyst, of course, has been Japan. Despite unprecedented promises of money printing by the Bank of Japan, verbal intervention (also unconfirmedContinue Reading

The Occupy movement was out in full force in Frankfurt again last week. From an impromptu camp near the city‘s exhibition centre, a sizeable and surprisingly well-organised crowd embarked on two days of protest and disruption around Germany’s financial capital.

There has been so much talk recently about the possibility of the Fed reining in its policy monthly asset purchases, the so-called ‘tapering’ (Word of the Year?). Yet, it shouldn’t have escaped investors’ attention that any official mention of the policy shift is invariably wrapped in pre-conditions: if employment continues to improve; if economic activityContinue Reading

29 May 2013. FRANKFURT (Börse Frankfurt). A stock market mini-crash of seven percent in one day, and a hefty sell-off in the bond market, is a dream scenario for sceptical investors. The only problem for the sceptics we discovered in Boerse Frankfurt’s weekly survey of domestic institutional investors was that the equity rout took placeContinue Reading

8 May 2013. FRANKFURT (Börse Frankfurt). Last week (in fact, just four sessions ago due to a German public holiday) sentiment among domestic asset managers on Boerse Frankfurt’s survey panel registered the largest bearish shift in over three years. Since then, the DAX benchmark index not only climbed more than three percent, it also scaled itsContinue Reading

This is not the first time that central bank gold reserves have been evoked as a partial solution to public debt problems. In the depths of the Greek crisis, the sale of nation’s bullion reserves was briefly discussed as a means to bring down the debt burden, but the holdings were too small to makeContinue Reading

‘Cut one’s coat to suit one’s cloth’. This is the sort of kitchen-table budgetary advice that is often doled out to those who find themselves in a financial bind. When it comes to a debate about the wisdom or otherwise of austerity of the kind currently practised in peripheral Europe, it seems odd that seriousContinue Reading

A tweeted link to a story about Margaret Thatcher caught my eye this morning, as it certainly did other readers. It related to an accusation by Australia’s foreign minister that Margaret Thatcher held ‘unabashedly racist’ views. The bold headline about the late Baroness’ xenophobia was well chosen; Bob Carr’s other recollections about the former BritishContinue Reading

A sell decision is never too far from investors’ thoughts  3 April 2013. FRANKFURT (Börse Frankfurt). “If at first you don’t succeed, try, try again,” counselled the US comedian W.C. Fields. “Then quit,” he went on. “There’s no point in being a damn fool about it.” Domestic institutional DAX investors seem to have taken thisContinue Reading

The readers choices for the first quarter’s most popular posts suggested the continuing pre-occupation with the financial crisis and its solutions sat uncomfortably with the recovery in the equity benchmarks. One of these developments seemed to be wrong. We suspect, for many readers, it was the stock market. 1) What are the chances for aContinue Reading

DAX investors take another stab at a correctional bet 27 March 2013. FRANKFURT (Börse Frankfurt). Even though German institutional investors have expressed a bullish opinion of the blue-chip DAX index every week for almost two full quarters, it would be wrong to describe this optimism as ‘unreserved’. To a large degree, fund managers’ opinions wereContinue Reading

It’s the end of the quarter and it has not been a good one for issuers of gold ETFs. Since the start of the year total holdings, as measured by Reuters, has slumped at an unprecedented rate. For the ETF providers, who earn fees based on the amount of gold they hold on behalf ofContinue Reading

Media reports overstate investor anxiety 20 March 2013. FRANKFURT (Börse Frankfurt). If financial journalists had a vote on Boerse Frankfurt’s DAX sentiment panel, optimism would be in the cellar. The controversial levy on Cypriot bank deposits has provided grist for a media mill that has been starved of eurozone crisis news since Draghi’s by-any-means-necessary speechContinue Reading

Given the number of prominent voices that have been raised against the controversial Cyprus bank levy, it was a wonder it found so much support among the troika – the ECB, EU and IMF. Dmitry Medvedev cried foul, Lawrence Summers saw it as an error, and even former Eurogroup chief Jean-Claude Juncker criticised it.  WithContinue Reading

A online debate about the merits and dangers of nudging – the ‘soft’ paternalism Richard Thaler and Cass Sunstein promoted in their 2008 book, ‘Nudge’, came to the brink of degeneration last week. The detractors criticised the insidiousness of the behavioural interventions. Nudgers, they suggested, use crafty psychological manipulation to rob people of their individualContinue Reading

Institutional investors lost patience with the idea of a correction 6 March 2013. FRANKFURT (Boerse Frankfurt). For more than a month, the DAX had promised to move lower. The market had delivered an impressive, almost one-way performance since last November until the end January of this year and had reached a new multi-year high. ForContinue Reading

“My book got a great review today,” my colleague announced proudly. “Aren’t you supposed to say ‘our’ book,” I interjected, “there were two of you who wrote it after all?” “Of course, I meant ‘our’ book,” he replied in voice that was fully one octave lower.

Strasbourg played host to the 20th Independent Wine Producers and Wine Fair last weekend. It was a great event: it not only gives wine-lovers the chance to sample hundreds of wines from every French wine region, it also provides an opportunity to meet the independents vintners who do the cultivating, the harvesting and the fermenting.Continue Reading

DAX investors give up on ‘big’ correction 13 February 2013. FRANKFURT (Börse Frankfurt). A little less than two weeks ago investors took fright in response to the latest developments in the eurozone. Reportedly, their concerns centred on upcoming elections in Italy, a scandal and the prospect of elections in Spain, and a lack of EUContinue Reading

The title of this post was one of the questions an economist from a major French banking group asked the audience during a lecture to Franco-German business group yesterday evening. His answer was a resounding “no”. On two measures, he argued, employment and consumption, eurozone citizens have fared far worse than their counterparts in theContinue Reading

International investors are fleeing former financial safe-havens in huge numbers this year. Compare this to 2012, when fears of a Greek departure from the eurozone prompted its well-heeled nationals shift their wealth into more economically-sound destinations within the zone, like, Germany, Austria and Finland or, better still, into non-eurozone countries like Switzerland and the UK.

Allegations of a political slush fund in Spain and anti-reform electoral promises in Italy combined to do some meaningful damage on the respective stock markets yesterday. But why?

Cost-cutting measures in one stressed investment bank have reached such an extreme that bankers will have to forego a coffee service during their meetings from now on. Admittedly, the saving is hardly likely to felt on the bank’s bottom line; like cancelling the newspaper subscriptions,

Overweight for the first time since the start of Q3 2012. 30 January 2013. FRANKFURT (Börse Frankfurt). DAX investors who were hoping for a correction to provide cheaper levels to buy German blue chips have been left wanting. Since Boerse Frankfurt’s last sentiment survey one week ago, stock prices have essentially only gone higher –Continue Reading

That Mario Draghi’s name was recently mentioned as a potential Italian prime minister is measure of how much the man is presently revered in politic0-economic circles. His management of the eurozone crisis and, just as importantly, of the ECB’s Governing Council, has rightly earned him high praise – Man of the Year, no less.

Investors hope for a cheaper buying opportunity. 16 January 2013. FRANKFURT (Börse Frankfurt). The latest data from EFAMA, the European Fund and Asset Management Association, confirmed this week that inflows into European investment funds accelerated for a second consecutive month in November. Equity products were the clear winners; they attracted double the inflow of fixed-incomeContinue Reading

It is amusing to see the US, a country that has railed for so many years against minting a one-dollar coin, petition its government to issue one worth one trillion dollars. The monster mintage is simply a ruse to avoid having to negotiate a higher debt ceiling. The idea of creating a platinum coin (theContinue Reading

We would like to thank our readers for following the Unexpected Utility blog. We also take this occasion to wish you all an excellent holiday and a prosperous New Year and above all opportunities to make good decisions.  

“The majority of investors on the panel had been outright bearish during practically all of the third quarter – pessimism of unprecedented duration in the history of this survey. So it is difficult to imagine they would have been able to perform the mental gymnastics necessary to switch from stubborn bear to dyed-in-the-wool bull inContinue Reading