As Jordan explained to us last month, we're still not seeing higher highs and higher lows in the gold price. His opinion was again confirmed. Every time gold approaches $1350 per ounce, there's a dramatic pullback. Until gold breaks this key resistance point, with conviction, not much is going to happen. Unfortunately, until further notice, precious metals investors are in a waiting game. 

Direct download: Jordan_Roy_Byrne_17.Apr.19.mp3
Category:general -- posted at: 4:52pm EST

Brexit chaos spurs record flows to sterling-hedged funds. Investors pour money into pound-proofed ETFs at a rate seven times that of a year ago. According to figures from Lipper, the data provider, net inflows into Europe-based ETFs that are hedged to sterling reached record levels during the first three months of 2019. These funds pulled in close to €1.7bn during the period, as investors looked to protect themselves against currency risks linked to a no-deal Brexit. The inflows represent a sharp increase on the comparable period a year ago, when investors put a net €256m into sterling-hedged funds.

This year’s largest inflows came in February, with almost €1.1bn moving into ETFs hedged to the British pound. Invesco, UBS and Lyxor were among the asset managers that gathered the lion’s share of new money into sterling-hedged ETFs during the quarter.

Detlef Glow, head of research for Europe, the Middle East and Africa at Lipper, said increased demand for currency-hedged funds had come during a strong sales period for the ETF industry more generally.

“An additional driver might be Brexit, as investors fear currency losses and are therefore hedging themselves against this risk,” he said.

According to Lipper data, almost €27bn flowed into Europe’s ETF sector during the first three months of 2019. February in particular was a standout month, with net inflows of €13.5bn recorded.

Andrew Walsh, head of passive and ETF specialist sales for the UK and Ireland at UBS Asset Management, said: “We have seen a few of our larger clients, and many other mid-sized clients, going into GBP-hedged in recent months on the basis that sterling is undervalued at current levels, no matter what the eventual outcome on Brexit.”

Paul Syms, head of ETF fixed income product development for Europe, the Middle East and Africa at Invesco, said the asset manager has seen particularly strong demand for the GBP-hedged version of its US Treasury Bond 7-10 year ETF since its launch in January.

“There are various reasons for investors buying longer-dated US Treasuries, which would include, but are not limited to, concerns about an economic downturn in the US and easing of monetary policy,” said Syms.

“In addition, the UK is obviously facing the numerous risks around Brexit, which may cause sterling to be more volatile than in normal market conditions. For a sterling-based investor, the potential for sterling to rise or fall quite dramatically around the decision on if, when and how Brexit takes place — which has nothing to do with their economic view — may be a reason to hedge foreign-currency denominated assets.”

The UK is now scheduled to leave the EU on April 12, with or without a withdrawal agreement in place. Prime Minister Theresa May has said she will work with Labour leader Jeremy Corbyn to help end the deadlock in parliament.

Any new proposals on the UK’s future relationship with the EU will need to be agreed by MPs ahead of an emergency EU summit on Brexit scheduled for April 10.

The prime minister said she would ask the EU for a further short extension to the Brexit date, with hopes that an agreement can be signed off before May 22 to prevent the UK taking part in European elections.

But EU leaders poured cold water on the short-extension proposal, with The Guardian reporting that Jean-Claude Juncker, European Commission president, has said May will be given a choice between a longer delay, of up to a year, or crashing out with no deal on April 12.

The ETF figures from Lipper come as anxious property fund investors have pulled more than £1bn from UK real estate funds since the start of this year, prompting fears that the sector is on course for a repeat of disruptive and costly fund closures experienced in the wake of the referendum vote in 2016.

Data from Calastone showed that net outflows from open-ended property funds hit £578m in the first three months of the year — the second-highest level of quarterly net withdrawals since the data provider began collating figures four years ago.

Direct download: Chris_Vecchio_17.Apr.19.mp3
Category:general -- posted at: 4:51pm EST

Judge Wilson, first time guest, tells us that After almost two years of investigation, the report of Special Counsel Robert Mueller concerning whether the President and his campaign staff colluded with Russian agents during the 2016 election was finally provided to the US Attorney General's Office late in March. The Attorney General, William Barr, immediately released a short summary of the Report. In that letter, the Attorney General made two significant points: 1) " The Special Counsel's investigation did not find that the Trump campaign or anyone associated with it conspired or coordinated with Russia in its efforts to influence the 2016 U.S. presidential election," and 2) "the evidence developed during the Special Counsel's investigation is not sufficient to establish that the President committed an obstruction-of-justice offense."

Since the issuance of the Barr letter, President Trump and his supporters have declared "total and complete exoneration," while some Democrats, like Congressman Adam Schiff (D-CA) have maintained that "undoubtedly there was collusion" regardless of what the Mueller Report states. Rather than rely upon the letter issued by AG Barr, many in Congress are demanding the release of the entire report issued by Special Counsel Robert Mueller.A controversy has now arisen over whether or not the entirety of the Mueller Report can be made public.

As of this writing, the AG's staff is reviewing the Report, and redacting material that is based upon Grand Jury testimony. These redactions are necessary under Federal Rule of Criminal Procedure 6(E), which, as AG Barr states, "generally limits disclosure of certain grand jury information in a criminal investigation and prosecution. Employing this logic a few steps further, if we assume that most members of Congress are aware of the law, and of the facts outlined above, then it becomes clear that the calls by Democratic lawmakers for the production of the "entire" Mueller Report, including the Grand Jury materials, is nothing more than political theatre, and nothing less than bad faith

Direct download: John_H._Wilson_17.Apr.19.mp3
Category:general -- posted at: 4:38pm EST

First time guest Jayant Bhandari believes that democracy is a flawed system that has failed to bring people out of poverty in the last century. Rather, authoritarian benevolent regimes, such as China, Singapore, Hong Kong, etc., have been the wealth building leaders. Not that we're unmindful of democracy's flaws, but we tend to subscribe to the Churchillian view that "Democracy is the worst system in the world, except for all the rest!" And perhaps at present our participatory democracy is a chimera, but Donald Trump is president and that says something. Jayant sees continued growth in East Asia and economic leadership. And he believes he's freer in East Asia than elsewhere and that most people don't really care about government and just want to be left alone. Tell that to the thousands of victims of the Tiananmen Square Massacre. 

Direct download: Jayant_Bhandari_17.Apr.19.mp3
Category:general -- posted at: 1:24pm EST

In places like Greenwich, CT, New York City, Vancouver and around the world, it looks like there's a high-end housing bust taking place. It's partly a demographic issue, where older people are downsizing want to cash in on their expensive housing. The hoped for resale market is younger generations and they're just not stepping up to the plate. This underscores the danger or easy credit. It's great when you're acquiring luxury properties, but not so much when you go to sell. Expect such declines to increase in the future. 

Direct download: Danielle_Park_16.Apr.19.mp3
Category:general -- posted at: 1:18pm EST

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