Comment of the Day
Big Picture Long-Term video commentary December 16th 2022
A link to this week's Big Picture Long-Term video is posted in the Subscriber's Area.
Is The 2023 Consensus Wrong?
Thanks to a subscriber for this report from TS Lombard which may be of interest. Here is a section:
Still, bearing in mind the woeful performance of economists’ predictions in 2022, it is worth considering the risks to the current consensus. One possibility is that we are underestimating the severity of any 2023 downturn. Because of the reflexivity that kicks in as economies contract, we have seen this pattern many times before. Perhaps something will break in financial markets or – more likely – the weakness in property markets will prove systemic. For their part, central banks are ignoring the “long and variable lags” in monetary policy. But perhaps the most under-priced risk is to the upside – that the global economy proves more resilient than everyone expects. In fact, given the large distortions in the economy, we would not rule out the unscheduled return of Goldilocks. She is not going to stick around for long, but perhaps long enough to provide some welcome respite for investors.
Eoin Treacy's view - There are less than two weeks of trading left in the year. 2022 has been a year that delivered dual losses in both bonds and equities. If anyone has highly appreciated assets they were thinking of taking profits in, then selling major underperformers to harvest tax losses has been a major theme in the last few days.
Japan Highlights China Challenge in Tougher Security Policy
This article from Bloomberg may be of interest to subscribers. Here is a section:
“We see China as a strategic challenge to our country’s peace and safety and the peace and stability of the international community,” Kishida said. He added the two neighbors bear a joint responsibility for the peace and prosperity of the region and the world.
Referring to a “remarkable” build-up of missile capability in the region, the government said in the document it is becoming difficult to deal with the situation simply by strengthening the country’s existing missile defense network.
The strategy calls for acquiring “counterstrike capability” that would enable Japan to target an enemy’s military facilities, in a turning point for a country bound by a pacifist constitution since 1947.
Raytheon Technologies Corp (NYSE:RTX).’s Tomahawk missiles are being considered for that purpose, according to the document. The Tomahawk has a range of more than 1,250 kilometers (780 miles), meaning it could be used to hit naval bases on the east coasts of China and Russia.
Japan also intends to obtain sufficient supplies of missiles, including those made on its own, over the coming decade with ranges long enough to strike military assets in its three nuclear-armed neighbors that have been a focus of Tokyo’s concerns.
With its new strategy in place, the government is considering revising the defense guidelines governing its military cooperation with its only formal treaty ally, the US, according to Kyodo News. Kishida may raise the issue during a visit to the US the government is seeking to organize for next month, the agency said, citing government sources.
Japan says it will retain its “exclusively defensive” posture as well as its ban on nuclear weapons.
“Today, Prime Minister Kishida ushered in a new era in the defense of democracy. I want to congratulate him on his leadership,” US Ambassador to Tokyo Rahm Emanuel said in a statement welcoming the steps.
Eoin Treacy's view - Japan adopting a more forthright approach to national defense, by acquiring offensive capabilities, has been a long time coming. Rearming is going to be a significant theme for many countries over the balance of the decade.
Amazon Signs Deal With Games Workshop for Warhammer 40k Films
This article from Bloomberg may be of interest to subscribers. Here is a section:
The announcement Friday was “very exciting news for Games Workshop,” said Andrew Wade, an analyst at Jefferies in a research note, noting that licensing income has built strongly in recent years. “A mainstream TV/film product could be game-changing in terms of Warhammer’s brand reach and awareness.”
Shares in Games Workshop rose 11% in early trading on Friday, the most in almost nine months. The stock — a pandemic market darling as lockdowns boosted demand for home-based hobbies — had previously fell about a quarter year-to-date.
Amazon is gearing up to spend more than $1 billion a year to produce movies that it will release in theaters, following the $8.5 billion acquisition of MGM, a 98-year-old Hollywood studio that released Ben-Hur and Legally Blonde. I
The ex-superman actor Henry Cavill is likely to star and executive produce a series adaption of Warhammer 40k, a franchise he’s made no secret of his love for, according to a report the Hollywood Reporter Thursday.
Eoin Treacy's view - This is a significant coup for Games Workshop and will greatly enhance the visibility of its Warhammer franchise. I never got into Warhammer since I have never had the free time to play the game. However, two of my younger brothers are avid fans, and have spent many long hours painting and arranging their battle groups.
Eoin's personal portfolio: stock market index positions closed at profit and shorts opened December 6th 2022
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.