FPM Moot-Points:

Tweet Me Please!

Sunday 22 May 2016

Are Investors Really Out There: #Brexit & Siva

The title of this post is a reference to our exposition “The Search forAlpha: Soros of the Euro?”, way back in October 2011. Below is the extract from the opening paragraph:

We know hedge fund managers are out there but are they "really out there", say with a macro play to break-up the Eurozone's common currency the Euro? Like the one George Soros spearheaded causing the exit of the British Sterling from the European Exchange Rate Mechanism in 1992?

The title of this post is also a play on the theme with “Siva” being the “Soros” of Euro breakup vanguard. FPM bases it fundamental view, held since the EU inception, on the fact that the capital markets, particularly “forex trading” lost a swathe of business from foreign-exchange trading. This happened with the elimination of Francs, Deutschmarks, Lira, Pesetas, Guilder etc when a new Union currency was hypothesised and eventually introduced in 1999. This represented a radical shift in the geopolitics tectonic-plates of European national sovereignty; an identity which has been at the heart of an  advanced economic society of the last 200 years, since and before the industrial revolution. 

To put the European Union project in a relative context for comparison, the tectonic-plate shift would be akin to, for example, the South East Asian region being regulated towards consolidation  or unification of their numerous car manufacturers. Loss of car firms instead of  the EU currencies is the comparative. The disappearance of car manufacturers in just two of the major economies of the region would represent a seismic  loss of business. Considering just Japan and South Korea,  the following list is  only some of the car companies, that would disappear: Toyota, Honda, Hyundai, Kia, Daewoo, Daihatsu, Nissan, Mazda etc. Perhaps these companies are replaced by one or two regional mega car manufacturers. 

That comparative example would see national car companies  disappear to leave one large regional conglomerate and loss of car manufacturing business in some countries. While those countries retaining the less-is-more car-production facilities in the region may benefit from the mergers and acquisition in the automotive sector.  Arguably, whether theories of monopoly businesses eliminating wasteful competition, or a degree of  competing oligopoly business model etc, prevails is left to impotent academic economists. FPM principals in their practical and studied considerations suggest these corporate M+A, and similar social unification have its profound rationale in geopolitic and realpolitik - not mere commercial sense. This is really the issue for in this changing  mileu, which FPM is developing to a crest through its triumvirate enterprises (convergence, no smoke without fire: of reputation and M+A in alternatives).

Back to the case in point: winding-time forward from inception of the Eurozone of countries adopting the common currency, and we have K Kristian Siva, principal of FPM, uncompromisingly and absolutely speculatively promoting  the raison d'etre of the thin-end-of-wedge European Union project, as it is now and what it implies. This one-size-fits-all regional entity therefore occasionally casts doubts about the existentialism of the representative Euro currency. FPM  does not believe it is wholly an existentialism crisis for the Union project at this stage; more that the mainstream media narrative is used as rhetorical tool to instigate capital market devaluation of the Euro currency. This is indeed in keeping with global sovereign currency devaluations taking place. Devaluation maintains national competitiveness in global trade i.e. imports become expensive and exports cheap, and viceaversa . The exchange rate of a national currency determines health of an economy relative to others. Depreciation of national exchange rate have been   taken in turns by China, Switzerland, EU and Japan over recent years. Among these sovereign currency super-powers, there is indeed “Currency Wars” which are preceded by the “Trade Wars”. STOP THE PRESS!

US slaps China steel imports with fivefold tax increase - BBC.CO.UK 18 May 2016

Whatever scenario unfolds, just as in 1992 when the British pound exited the Exchange Rate Mechanism - ERM, a forerunner to the Euro currency (and hence why FPM and other foresighted experts describe the EU project as being implemented through  thin-end-of-wedge policies towards ultimate Federalism of Europe), the British are again central to the plans for homogenization of distinct European countries. The EU project has been in the making since 1953 when 6  European countries were inaugral members, through the Treaty of Rome, or some other grandiose "conflab" event. This time round the British citizenry are not represented by the Government making decisions about being part of the EU block, but relevantly by a democratic voting referendum of the people. It was then the Conservative alias Tory government under the lead of UK Prime Minister John Major after Margaret Thatcher's epochal innovations that forced exit from Euro project.

This time round it is the British people who decide whether it has been good FOR THEM over the last nearly-40 years since 1977, when EU and Milton Friedman school of capitalism / economics came to the fore. also to the fore came  “realpolitic” by Morgenthau, espoused by uber internationalist Henry Kissinger.

"Some good, some bad!” is what most people will say with personal relevance about the EU. But economically and in investment terms that era has left exponentially big national sovereign debts. A debt which the citizenry ultimately pays for through loss of municipal amenities and through greater taxation. To a point of catastrophic credit crisis, viz Greece played out as a microcosm of many many other countries' impending crisis. Some perspicaciously blame a model of the world, which is based on debt servitude and lacking idealism, on the moneylenders' creed. 

Robert Schuman (one of the founders of the EU) warned in 1963 that political counterfeiters were already undermining European democracy.

A people vote for Britain to exit (#Brexit) the European Union in the EU referendum (#EUref) on June 23rd, 2016 by indigenous Britons, as opposed to unnaturalised UK citizens from Europe and other places over the decades, begins to unwind the first pillar of globalisation, which is rapidly heading  towards an "Orwellian 1984" New World Order. A one world government  ambition  which we as a global citizenry are most definitely currently  disastrously heading towards. The unwinding of the EU project, first and foremost, would damage the international capitalists from their hegemonic megalomaniac machination for the global population. An elitist ambition which has produced decade-long future austerity, sell-off of national assets and global wars, as well as greatest wealth inequality in populations. And Climate Change!
FPM's recommended  short play on the Euro versus the Dollar via an Exchange Traded Fund - ETF is ETFS 3x Short EUR Long USD (SEU3).

And as pictures speak a thousand words, below the ETF's is the performance over 5-years  and the past 1-Year is juxtaposed:
To Be Continued (only if you don't geddit yet idiot Brit!)