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Sun, 25th June 2017

Anirudh Sethi Report

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Posts Authored by: “Anirudh Sethi”

BIS Lists The Four Biggest Threats Facing The Global Economy

After years of fire and brimstone sermons, also known as the Bank of International Settlements’ annual reports delivered with doom and gloomy aplomb by Jaime Caruana (the 2014 report, in which the BIS was shocked at how broken the market has become, was a particular favorite) who year after year warned about the adverse side-effects of central bank intervention, today the BIS released its most upbeat reports in years, in which it praised the recent rebound in global growth and predicted that GDP may soon revert to long-term average levels after the sharp improvement in sentiment over the past year.

Or maybe not, because even as talk of a “global coordinated rebound” continues, it has once again rolled over, with the US economy barely growing above stall speed, while the BIS explicitly notes that “despite the best near-term prospects for a long time, paradoxes and tensions abound” among these are the VIX…

 Financial market volatility has plummeted even as indicators of policy uncertainty have surged.

… and the record disconnect between equities and bonds.

 Stock markets have been buoyant, but bond yields have not risen commensurately.

Meanwhile, optimism – at least as measured by various sentiment surveys such as the PMI and consumer confidence, is the highest since the financial crisis even as globalization, “a powerful engine of world growth, has slowed and come under a protectionist threat.”

While praising the recent economic rebound, the BIS notes that the main theme of this year’s Annual Report is the “sustainability” of the current expansion, specifically “What are the medium-term risks? What should policy do about them? And, can we take advantage of the opportunities that a stronger economy offers?”

The Saudi 13-part ultimatum to Qatar is insane

I don’t see how this can end well

Saudi Arabia doesn’t want peace. That’s the only conclusion from the list of demands leaked today.

The blockade against Qatar came out of nowhere and now they’re raising the stakes. Reuters reports on 13 demands that Saudi Arabia has issued and I don’t see how Qatar can accept them. They’ve been given 10 days and the consequences of not complying weren’t outlined.

What is clear is that the demands would be impossible, if not a capitulation.

Here they are:

1. Qatar must announce the reduction of diplomatic links with Iran and shut down its missions there. It must expel members of Iran’s Islamic Revolutionary Guard Corps, and limit commercial ties as long as they do not contradict international and U.S. sanctions on Iran or jeopardise the security of the Gulf Cooperation Council. Qatar must cut any military or intelligence cooperation with Iran.

(Note: Qatar shares an enormous natural gas field with Iran)

2. Shut immediately the Turkish military base currently being established in Qatar, and halt any military cooperation with Turkey in Qatar.

(Note: This is another demand that’s extremely difficult to meet. In part because NATO wants to give Turkey more latitude)

3. Announce it is cutting relations with all terrorist, ideological and sectarian organisations, including the Muslim Brotherhood, Islamic State, al Qaeda and Hezbollah. Designate them as terrorist groups and add them to the lists announced by the four Arab states.

4. Cease funding of any extremist and terrorist individuals, entities and organisations, including those designated as such by the four countries, the United States and other international organisations.

5. Qatar must hand over all designated terrorists wanted by the four countries, the United States and other international organisations, freeze their assets, and stop hosting others in future. It must commit to present any information needed about them especially their movement, whereabouts, and financial information.

6. Shut down Al Jazeera and all affiliated channels.

7. Stop interfering in the four countries’ domestic and foreign affairs. Stop allowing their citizens to become naturalised Qataris and extradite those who have been naturalised if they have violated laws in the four countries. Cut ties with the opposition in the four countries and give details of previous cooperation between Qatar and those elements.

8. Provide reparations to the four countries for any damage or opportunity costs incurred because of Qatari policies. The mechanism will be decided on in the agreement that will be signed with Qatar.

(Note: Asking for reparations is always a sign that you don’t want real peace, but punishment)

9. Align Qatar with its Gulf and Arab neighbours on all levels (military, political, economic, social and security) which guarantee national, Gulf and Arab security, and activate the Riyadh agreements of 2013 and 2014.

(Note: Societal is an interesting one. Qatar allows women to drive cars and for foreigners to consume alcohol)

10. Provide data showing which opposition groups Qatar supported and what help was provided.

11. Close all media outlets backed by Qatar directly or indirectly.

(Note: Asking a country to shut down all its media outlets is an over-the-top request).

12. All these demands must be agreed to within 10 days of the date of presentation, or they will be considered void.

13. The agreement will involve clear goals and mechanisms, with monthly reports in the first year, every three months in the next year and then annually for 10 years.

DEVELOPING ENDURING CONFIDENCE

Developing enduring confidence in your real-time trading skills and abilities doesn’t come overnight. It’s a process. And, it’s the process of ‘getting there’ that we focus on to improve and to “be a good trader.”

Confidence comes from mastering the various skills needed to read the market, execute and manage trades. Mastering these skills and abilities is the process of trading and it is this process that brings about confidence.

Confidence really doesn’t come from more winning trades. In fact, more winning trades come from a dedicated focus on the process.

ARE YOU IN LOVE WITH MARKETS?

Imagine for a minute your relationship with markets. How would you characterize that relationship? Is it an adversarial relationship? A hot-and-cold, confusing relationship? A fulfilling relationship?

Many traders talk about markets as if they are battlegrounds and they prepare for combat each day. Other traders, frustrated, talk about markets been manipulated.

How we related to markets very much impacts our trading experience. If we think of the market as casino, we will frame one kind of experience. If we treat markets as battlegrounds,  our experience will be quite different.

Now imagine what it would be like to be in loved with markets: to find in them something unique, special and valued. A person who is in love with markets will be market focused even outside normal trading hours.

They are not simply preparing for day’s trading; they are passionately interested in deepening their market experience, learning everything they can about markets.