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South African Police Reported to Get Gupta Arrest Warrant

Published: 09:08 16 Jan 2018 GMT

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Email of the day on long-term themes and investment vehicles

Well done on all the recent market analysis and continuing your thoughtful and insightful analysis as ever. I was wondering if you might be able to provide some thoughts and ideas regarding how to invest is some of the longer-term themes you are running with?
Markets seem to be entering some really interesting phases that you are highlighting, such as the end of QE, coordinated economic expansion which must spell the end of the long-term bond boom that we have seen. Whilst I know you watch and play the markets daily with your futures plays, those of us with non-related "day" jobs need slightly less volatile longer-term ways to play these trends, e.g. perhaps through some ETFs or appropriate equity investments.
Given your knowledge of the markets, I was wondering if you might be able to


1) summarise your key themes right now and
2) propose some suggested means to back these ideas. I think the regular summaries help as not all of us have time to listen to your broadcasts or even read the bulletin every day.

Perhaps this could be a weekly update?
Whilst I like your own personal portfolio updates, your trades tend to be futures so need much more regular management than the type of trades myself and I suspect many other readers may feel more comfortable with.
Hope this makes sense and thanks very much for your consideration.

Eoin Treacy's view

Thank you for this email and reasonable request. Right now, the Big Picture Long-Term video, posted every Friday, is aimed squarely at anyone who does not have the time to read the daily commentary but wishes to gain some perspective on what we think the long-term outlook holds.  Here is a brief summary of my view at present - to read more, please go to the Subscriber's Area.

 

Email of the day on Eurozone underperformance

It looks to me that European shares are lagging more and more the US and Far east shares. with this euro/usd head storm instead of headwind Europe will follow the USA a little on the way up but I fear will probably follow the USA every step of the way down when this market eventually starts to correct. I fail to see the reasons for this strong euro. could you please give your expert opinion?

Eoin Treacy's view

Europe has lagged for much of the decade for a variety of reasons, but the region’s decision to impose a sovereign debt crisis rather than force bankruptcies is among the chief reasons for underperformance. The questions about the sustainability of the Eurozone that the fiscal austerity pledge engendered have been partially averted by the ECB’s massive quantitative easing program but tapering is already underway so growth will need to continue to trend higher if more revolts against the status quo are to be avoided

 

South African Police Reported to Get Gupta Arrest Warrant

This article by Paul Vecchiatto for Bloomberg may be of interest to subscribers. Here it is in full:

South Africa’s Hawks police unit has obtained an arrest warrant for at least one of the members of the politically connected Gupta family, City Press reported.
The unit is now waiting for prosecutors at the National Prosecuting Authority to sign the warrants so that the arrests can be made, the Johannesburg-based newspaper reported on its website, citing an official at the Hawks it didn’t name. The official couldn’t say which of the three Gupta brothers -- Ajay, Atul or Rajesh -- would face arrest.
Former Public Protector Thuli Madonsela had ordered an inquiry into allegations that the Guptas may have influenced the appointment of cabinet members in President Jacob Zuma’s administration and received special treatment for a coal business linked to the family and one of the president’s sons.
This was part of Madonsela’s report about state capture, a term used to describe influence over government appointments and the awarding of state contracts.
Zuma and the Guptas have denied wrongdoing.
“We have not applied for an arrest warrant against any member of the Gupta family,” Hawks spokesman Brigadier Hangwani Mulaudzi said by phone from Johannesburg. “We are investigating a number of cases related to the issue of state capture, some of which have passed their stage-one levels, and we are awaiting direction from the National Prosecuting Authority.”
Ajay Gupta didn’t immediately respond to a phone call and text message seeking comment.

Eoin Treacy's view

Power is always subject to corruption so the strength of a nation’s checks and balances goes a long way towards informing out view of whether governance is improving or deteriorating. South Africa has an independent judiciary. That is not a boast many emerging markets can make and it has been the cornerstone of attempts to combat the deteriorating standards of governance represented by Zuma’s premiership.

 

On Target January 12th 2018

Thanks to Martin Spring for this edition of his report which may be of interest to subscribers. To read the section on supply, please go to the Subscriber's Area.

Eoin Treacy's view
A link to the full report is posted in the Subscriber's Area.

The triumph of the buy and hold strategy is representative of the 2nd psychological perception stage of a bull market. Both share buybacks and passive investing withhold supply from the market which widens the imbalance between supply and demand and contributes to trends becoming more consistent. When this is considered an inevitability rather than a possibility we can conclude the transition in the 3rd psychological perception stage has begun.

 

 

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