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News blackout means deal imminent

This week I have been fascinated by the market’s reaction to Brexit. I very much doubt that many traders were going long based upon the rumour that a) the U.K. had offered up to fifty billion euros to settle the divorce bill and b) the EU are going to agree the start of stage two when they meet in a couple of weeks’ time.

There is little doubt that the market has been short of Sterling against the dollar and euro for some time. It is the natural positioning in such a negative scenario. Does trimming a short position make sense based upon what we have(n’t) heard this week? Well, not really.

The adage that no news is good news simply doesn’t apply to the FX market. No news is often simply no news, but traders need to ask why is there no news. It is impossible to believe that no news means there is simply nothing happening. Given the way the world is today, no news means that they don’t want us to know. Personally, I don’t see anything positive happening to Sterling in the next three years at least. But then that’s just me!

Oh Donald, try Googling friend!

U.S. President Donald Trump will be considering that he has had a pretty good week. His fiscal reform legislation has finally been passed by congress despite its “reverse Robin Hood” basis.  

Poor Donald not only has no friends, he has convinced himself either he doesn’t need any or he is mistaking a whole range of other reasons those close to him tolerate his actions as friendship.

His meddling in purely domestic matters in the U.K. this week then criticising the Prime Minister when she called him out on it illustrates perfectly Trump’s developing siege mentality. He started by wanting to build a physical wall between the U.S. and Mexico (how is that going?), but has now graduated to simply fencing in the U.S. and telling anyone who will listen “don’t worry about us, we are fine” as another shooting happens for reasons wholly unrelated to terrorism.

Trump’s only “special relationship” is with himself so when the U.K. comes back to try to agree a post-Brexit trade deal, he isn’t going to invoke his inner Reagan, he is simply going to apply one simple criteria “what’s in it for me?”

Have you seen bitcoin?

There is a famous story of a Wall Street investor who was getting a shoe shine in 1929 just before the collapse of the stock market. The Shoe Shine Boy told him of a stock tip that he had invested in that he had got from a “client”.

The investor immediately went and sold his entire portfolio believing that if even shoe shine boys were giving bout stock tips that the bubble was about to burst. Sure enough, the next day the depression started, and the investor patted himself on the back. The shoe shine boy? He just went back to shining shoes.

I know what you are thinking. He is going to caution about bubbles as they apply to today to cryptocurrencies.

Well, actually, my thoughts are the exact opposite.

The difference is simple, there is, of course, “irrational exuberance” about Bitcoin that has seen it perform extraordinarily this week. But there is a big difference. The irrationality is due to two things and they are what lead me to believe that we are on the cusp of a sea-change in finance.

First, Bitcoin is simply driven by supply and demand, the purest driver of trading. Second it is acceptance and use that will drive it on. 10k? 11K? 15K? 20K? No one knows but it is developing an underlying value every day as the investor base widens and understanding develops.

News blackout means deal imminent

This week I have been fascinated by the market’s reaction to Brexit. I very much doubt that many traders were going long based upon the rumour that a) the U.K. had offered up to fifty billion euros to settle the divorce bill and b) the EU are going to agree the start of stage two when they meet in a couple of weeks’ time.

There is little doubt that the market has been short of Sterling against the dollar and euro for some time. It is the natural positioning in such a negative scenario. Does trimming a short position make sense based upon what we have(n’t) heard this week? Well, not really.

The adage that no news is good news simply doesn’t apply to the FX market. No news is often simply no news, but traders need to ask why is there no news. It is impossible to believe that no news means there is simply nothing happening. Given the way the world is today, no news means that they don’t want us to know. Personally, I don’t see anything positive happening to Sterling in the next three years at least. But then that’s just me!

Oh Donald, try Googling friend!

U.S. President Donald Trump will be considering that he has had a pretty good week. His fiscal reform legislation has finally been passed by congress despite its “reverse Robin Hood” basis.  

Poor Donald not only has no friends, he has convinced himself either he doesn’t need any or he is mistaking a whole range of other reasons those close to him tolerate his actions as friendship.

His meddling in purely domestic matters in the U.K. this week then criticising the Prime Minister when she called him out on it illustrates perfectly Trump’s developing siege mentality. He started by wanting to build a physical wall between the U.S. and Mexico (how is that going?), but has now graduated to simply fencing in the U.S. and telling anyone who will listen “don’t worry about us, we are fine” as another shooting happens for reasons wholly unrelated to terrorism.

Trump’s only “special relationship” is with himself so when the U.K. comes back to try to agree a post-Brexit trade deal, he isn’t going to invoke his inner Reagan, he is simply going to apply one simple criteria “what’s in it for me?”

Have you seen bitcoin?

There is a famous story of a Wall Street investor who was getting a shoe shine in 1929 just before the collapse of the stock market. The Shoe Shine Boy told him of a stock tip that he had invested in that he had got from a “client”.

The investor immediately went and sold his entire portfolio believing that if even shoe shine boys were giving bout stock tips that the bubble was about to burst. Sure enough, the next day the depression started, and the investor patted himself on the back. The shoe shine boy? He just went back to shining shoes.

I know what you are thinking. He is going to caution about bubbles as they apply to today to cryptocurrencies.

Well, actually, my thoughts are the exact opposite.

The difference is simple, there is, of course, “irrational exuberance” about Bitcoin that has seen it perform extraordinarily this week. But there is a big difference. The irrationality is due to two things and they are what lead me to believe that we are on the cusp of a sea-change in finance.

First, Bitcoin is simply driven by supply and demand, the purest driver of trading. Second it is acceptance and use that will drive it on. 10k? 11K? 15K? 20K? No one knows but it is developing an underlying value every day as the investor base widens and understanding develops.

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