Monday, March 24, 2014

RCS Investments Macro Commentary March ‘14

RCS Investments Macro Commentary March ’14

Macro Commentary March '14

Good morning,

Included is a synopsis of the macro landscape and possible future implications. Asset allocation considerations to follow soon.  In the meanwhile, you can check out my most up to date fund fact sheet.

http://rcsinvestments.wordpress.com/2014/03/24/rcs-investments-global-macro-fund-aggressive-allocation-march-14/

Thank you for your support,

Rodrigo

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Sunday, March 9, 2014

"There are no facts, only interpretations." — Friedrich Nietzsche. (February economic notables)

“There are no facts, only interpretations.” — Friedrich Nietzsche. (February economic notables)

Friedrich Nietzsche: Feb Economic Notables

Good evening,

Below is a concise 2-page report recapping economic data from the U.S., Europe, and Asia released in February. My next report will cover recent geopolitical events (Ukraine; droughts in South Asia, etc.)

Highlights:

Investors are interpreting worsening economic data in major economies as transitory and manageable. Upcoming months will be key in discerning the genuine trend.

The…

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Friday, March 7, 2014 Tuesday, March 4, 2014 Saturday, March 1, 2014 Friday, February 28, 2014

BRUSSELS—The European Union forecast tepid growth for most of the region through 2015 and warned that lingering debt burdens and the specter of deflation could sabotage the recovery.
Economists at the European Commission predicted a mild recovery over the next two years. The impact of budget austerity, a major drag on growth since the euro-zone debt crisis flared in 2009, is expected to fade this year. Meanwhile, policy overhauls in the euro zone’s weaker economies are starting to bear fruit, helping to boost their export sectors, the commission said.
Growth in the euro area is forecast at 1.2% this year and 1.8% next, after two consecutive years of contraction. That won’t be enough to make much of a dent in euro-zone unemployment, which is seen hovering near record highs of 12% in 2014 and 11.7% in 2015.
But the lackluster recovery faces some daunting obstacles. Debt owed by governments, households, businesses and banks remains too high in many of the bloc’s countries, the commission report said. And low inflation in the euro zone, or even the possibility of outright deflation, threatens to make the debt problems even worse.
"Much depends on the stability of inflation expectations for the medium term," said Marco Buti, the director general of the commission’s economics division. "Should they shift lower, the corresponding increase of real interest rates and the debt burden would make it harder for growth to accelerate."
The commission forecasts inflation in the euro zone at 1% this year and 1.3% next, well below the European Central Bank’s target of just under 2%. Eurostat on Monday said inflation in the euro area is running at 0.8%. The ECB’s meeting on March 6 is shaping up to be pivotal, with analysts divided on whether falling inflation readings will prompt the ECB to cut interest rates or adopt other stimulus.
The commission’s thrice-annual forecasts serve as a guide for how much austerity governments are expected to undertake to meet the EU’s budget rules, which generally require budget deficits under 3% of gross domestic product. While the bloc’s overall budget is seen falling below that level this year, some of the biggest euro-zone countries still have work to do to meet their targets.
France has pledged to bring its deficit to under 3% of GDP in 2015, yet the commission forecasts the deficit next year at 3.9% of GDP. In Spain, the government has pledged to bring its deficit to under 3% in 2016. Hitting that target will require significant new cuts, as the budget deficit is forecast to hit 6.5% of GDP in 2015.
The commission, which monitors and enforces the EU’s budget rules, has in recent years relied more on the “structural” balance—the actual budget balance adjusted for the strength of the economy—to evaluate national budget programs. That approach has allowed it to give national governments such as Spain and France more time to cut their deficits, since Europe’s weak economy is depressing tax revenues and increasing social spending.The commission’s thrice-annual forecasts serve as a guide for how much austerity governments are expected to undertake to meet the EU’s budget rules, which generally require budget deficits under 3% of gross domestic product. While the bloc’s overall budget is seen falling below that level this year, some of the biggest euro-zone countries still have work to do to meet their targets. - (WSJ)

BRUSSELS—The European Union forecast tepid growth for most of the region through 2015 and warned that lingering debt burdens and the specter of deflation could sabotage the recovery.

Economists at the European Commission predicted a mild recovery over the next two years. The impact of budget austerity, a major drag on growth since the euro-zone debt crisis flared in 2009, is expected to fade this year. Meanwhile, policy overhauls in the euro zone’s weaker economies are starting to bear fruit, helping to boost their export sectors, the commission said.

Growth in the euro area is forecast at 1.2% this year and 1.8% next, after two consecutive years of contraction. That won’t be enough to make much of a dent in euro-zone unemployment, which is seen hovering near record highs of 12% in 2014 and 11.7% in 2015.

But the lackluster recovery faces some daunting obstacles. Debt owed by governments, households, businesses and banks remains too high in many of the bloc’s countries, the commission report said. And low inflation in the euro zone, or even the possibility of outright deflation, threatens to make the debt problems even worse.

"Much depends on the stability of inflation expectations for the medium term," said Marco Buti, the director general of the commission’s economics division. "Should they shift lower, the corresponding increase of real interest rates and the debt burden would make it harder for growth to accelerate."

The commission forecasts inflation in the euro zone at 1% this year and 1.3% next, well below the European Central Bank’s target of just under 2%. Eurostat on Monday said inflation in the euro area is running at 0.8%. The ECB’s meeting on March 6 is shaping up to be pivotal, with analysts divided on whether falling inflation readings will prompt the ECB to cut interest rates or adopt other stimulus.

The commission’s thrice-annual forecasts serve as a guide for how much austerity governments are expected to undertake to meet the EU’s budget rules, which generally require budget deficits under 3% of gross domestic product. While the bloc’s overall budget is seen falling below that level this year, some of the biggest euro-zone countries still have work to do to meet their targets.

France has pledged to bring its deficit to under 3% of GDP in 2015, yet the commission forecasts the deficit next year at 3.9% of GDP. In Spain, the government has pledged to bring its deficit to under 3% in 2016. Hitting that target will require significant new cuts, as the budget deficit is forecast to hit 6.5% of GDP in 2015.

The commission, which monitors and enforces the EU’s budget rules, has in recent years relied more on the “structural” balance—the actual budget balance adjusted for the strength of the economy—to evaluate national budget programs. That approach has allowed it to give national governments such as Spain and France more time to cut their deficits, since Europe’s weak economy is depressing tax revenues and increasing social spending.The commission’s thrice-annual forecasts serve as a guide for how much austerity governments are expected to undertake to meet the EU’s budget rules, which generally require budget deficits under 3% of gross domestic product. While the bloc’s overall budget is seen falling below that level this year, some of the biggest euro-zone countries still have work to do to meet their targets. - (WSJ)

Tuesday, February 25, 2014

RCS Investments Macro Commentary and Asset Allocation February ‘14

RCS Investments Macro Commentary and Asset Allocation February ’14

Macro Commentary and Asset AllocationGood morning,

Included is a synopsis of the macro landscape and possible future implications. This summary is then followed by a review of the investment backdrop (S&P500) and asset allocation considerations for the RCS Investments aggressive global macro portfolio.

Thank you for your support,

Rodrigo

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Saturday, February 22, 2014 Wednesday, February 12, 2014 Sunday, February 9, 2014
Who’s Naked?: January economic notables:
Buried within Berkshire Hathaway’s 2001 Chairman’s letter, Warren Buffet famously wrote, “…you only find out who is swimming naked when the tide goes out.” This adage has special significance now that January is in the books in terms of economic data releases. —- (RCS Investments January economic summary)

Who’s Naked?: January economic notables:

Buried within Berkshire Hathaway’s 2001 Chairman’s letter, Warren Buffet famously wrote, “…you only find out who is swimming naked when the tide goes out.” This adage has special significance now that January is in the books in terms of economic data releases. —- (RCS Investments January economic summary)

Tuesday, February 4, 2014 Sunday, February 2, 2014
Executive Summary of RCS Investments 2014 Global Macro OutlookHello there,
I was told that having an executive summary of my extensive macro outlook, written at…View Post

Executive Summary of RCS Investments 2014 Global Macro Outlook

Hello there,

I was told that having an executive summary of my extensive macro outlook, written at…

View Post

Friday, January 31, 2014 Tuesday, January 28, 2014