US stock market overheated - BofA analysts say

Bank of America analysts report that, according to all key metrics, the current value of S&P500 companies is higher than it should be, which is a sign of a major deep correction in companies values.

Earlier, Warren Buffett and Michael Burry also beted on a near-term decline in the US stock market.

Warren Buffett's Berkshire Hathaway previously reported record earnings for the quarter, and showed the company's share of cash on hand totaled $147 billion. Such amount may be needed to start picking up falling assets at lower prices immediately, should they start to fall.

As for Michael Burry - he recently put a $1.5 billion short bet against the US economy, just like he did in 2008.

The Big Short 2?

Follow us on Telegram and Twitter

Africa's major bank hits record profits amid regional economic recovery

Standard Bank Group Ltd, Africa's largest bank by assets, reported record pretax profit in the first half of 2023.

Profit attributable to ordinary shareholders rose 36% to 21.9 billion rand ($1.1 billion) in the six months ended June, driven by revenue growth in Ghana, Kenya, Mozambique, Nigeria, Uganda and Zimbabwe, the company said on Thursday.

Franchise headline earnings in African regions rose 65%, accounting for 44% of the group's total earnings.

However, the bank faced challenges within its domestic market, South Africa. Inflation and interest rate pressures, along with slow reforms, poor service quality, frequent power outages, and logistical disruptions, continued to impact the bank's performance.

But even so, in Standard Bank's home market headline earnings also rose 17%.

Follow us on Telegram and Twitter

Brazil imports Russian fuel like never before

According to energy analytics company Kpler Ltd., imports of Russian oil products will increase in August by 25% compared to July and will amount to about 235,000 barrels per day. This is well ahead of the US, which used to be Brazil's main fuel supplier.

Brazil began sharply ramping up purchases in February when the EU banned imports and, along with other G7 countries, imposed a price cap on Russian fuel.

“Getting discounted barrels is a financial boon” for Brazil, where the government is under constant pressure to reduce the cost of transportation fuel, said Victor Katona, lead analyst at Kpler.

“Brazil is the largest Latin American market, so Russian refiners are focused on supplies to the nation,” Katona said. “Even Brazilian companies admit that their buying of Russian diesel creates a competitive edge, so I’d expect it to continue going forward.”

Follow us on Telegram and Twitter

Russia's new ways to rescue the ruble

After a key rate hike by Russia's central bank only temporarily strengthened the ruble, it became clear to officials that the measures taken were not enough.

So President Vladimir Putin held an extensive meeting on Wednesday to discuss how else to help the declining currency.

And, to all appearances, the meeting turned out to be productive, Vedomosti reported.

Apparently, some major exporters, in particular fertilizer producers, have not previously transferred all their foreign currency earnings to Russia due to complicated transfer procedures amid sanctions.

Instead, they simply took out loans for domestic operations and tax payments, which were very favorable due to the government's active support of the industry.

Therefore, the participants of the meeting agreed that now the companies would find ways and transfer the earnings to Russia, thus supporting the ruble exchange rate.

At the opening of trading on Thursday, it became clear that some companies have already managed to do this, as large currency sale transactions became clearly visible. The effect is expected to grow as more and more companies will be able to find ways to transfer large amounts of funds to the Russian jurisdiction.

Follow us on Telegram and Twitter

Japan increased grain imports from Russia by 5680% in July 2023

Yeah, that’s not a typo, 5680%.

The data comes from trade statistics released by Japan's Ministry of Finance.

A few other key points:

▪️Exports of vehicles to Russia grew by 84%, while shipments of spare parts fell by 44.4%.

▪️In addition, exports of medical devices increased by 1123%.

▪️Overall, Japanese exports to Russia in July 2023 rose 25% to $347.85 million compared to the same period a year earlier, while imports fell 69.6% to $367.31 million.

So, sanctions aren't going to keep you fed, apparently

Follow us on Telegram and Twitter

Dutch economy officially enters recession

The Netherlands unexpectedly fell into its first recession since the pandemic due to a decline in consumer spending and exports.

GDP shrank by 0.3% in Q2 of 2023 compared to Q1 of the same year. The economic downturn was also observed in Q1, which means that the country is now officially in recession, according to data released by the Dutch Central Bureau of Statistics.

The Netherlands is currently having to contend with economic pain alongside political turmoil caused by the resignation of longtime Prime Minister Mark Rutte.

Behind the downturn in the first half of 2023 are labor shortages, weak demand from European trading partners, and a sharp rise in interest rates as the European Central Bank seeks to curb inflation.

"Stability and predictability are now needed, so we have to be careful not to disrupt the economy and also to increase taxes," Economic Affairs Minister Micky Adriaansens told the Dutch press agency ANP.

Follow us on Telegram and Twitter

Global yields reach 15-year highs amid fears of a rate hikes

Global government bond yields continued their ascent - the US 30-year hit its highest level since 2011 and other benchmarks returned to 2008 levels - as resilient economic data refuted the view that central bank rates had peaked.

On Thursday, the five- and 10-year Treasury yields rose several basis points from their 2022 highs.

The 30-year bond yield has surged by seven basis points to reach 4.42%, significantly surpassing its recent trading levels.

The 10-year US bond yield climbed to 4.33%, up nearly eight basis points. The UK equivalent yield jumped to a 15-year high, while its German counterpart approached its highest level since 2011.

The Treasuries had led the global debt sell-off. And as the minutes of the Fed's latest meeting, released Wednesday, showed, officials remain concerned that inflation will not fall, necessitating further policy tightening.

“We do think there is a possibility that you get an additional Fed rate hike later this year to sort of make sure that there’s an insurance policy that inflation remains contained,” said Jerome Schneider, head of short-term portfolio management and financing at Pacific Investment Management Co, which has $1.8 trillion under management.

Follow us on Telegram and Twitter

China Evergrande Group denies filing for bankruptcy

China Evergrande Group said Friday that its filing for bankruptcy protection in a US court is a routine offshore debt restructuring and does not involve a bankruptcy filing.

The company explained that its US dollar-denominated bonds are governed by New York law, and it has applied to a US court under Chapter 15 of the US Code for approval of the arrangements as part of the offshore debt restructuring.

Follow us on Telegram and Twitter

Malaysia struggles to grow due to El Niño

Malaysia's economic growth in the second quarter was the lowest in nearly two years due to falling exports and a slowing global economy, prompting the country's central bank to warn that full-year growth would be below its previous forecast.

The Q2 annual growth came in at 2.9%, central bank data showed. The growth rate was the slowest since 2021.

"The weak external demand is expected to weigh on near-term growth. The economy is facing downside risks stemming from weaker-than-expected global growth and a deeper or longer-than-expected technology downcycle," Governor Abdul Rasheed Ghaffour said at a news conference.

While he does not expect a global recession, the governor believes global economic growth will be below the long-term average.

Malaysia, one of the world's largest exporters of palm oil and liquefied natural gas, also suffer in commodity production due to El Niño and prolonged plant maintenance, Abdul Rashid noted.

El Niño is a natural phenomenon that causes warming of the Pacific Ocean and, as a consequence, has a significant impact on the planet's climate. During this period, waves of intense heat waves, heavy rains, droughts, and other anomalies are recorded.

Follow us on Telegram and Twitter

China's hidden financial dangers emerge in shadow banking crisis

Until a week ago, Zhongzhi Enterprise Group was little noticed in China and barely mentioned elsewhere.

Shadow banking giant Zhongzhi – a private management company with more than $137 billion in assets – has now become the latest symbol of financial instability in the world's second largest economy, where investor, business and consumer confidence is plummeting.

Zhongzhi and its subsidiary trust companies are now under intense scrutiny after halting payments to thousands of clients.

Its trusts alone, despite operating in the shadows, account for about 10% of all loans in China, and as word of Zhongzhi's problems spread, Chinese assets began to plunge, sending the yuan to a 16-year low.

The turmoil presents another challenge for Xi Jinping's government, which already faces a weak economy, a real estate sell-off and rising geopolitical tensions.

China's regulators have already formed a task force to prevent the contagion from spreading.

Analysts warn that the potential asset sales that could follow could further put pressure on broader markets.

Follow us on Telegram and Twitter

US mortgage rates jump to 7.09%, highest since 2002

The average rate on a 30-year fixed-rate loan was 7.09%, up from 6.96% last week and the highest since April 2002.

Recent increases in credit costs and home prices caused by severe inventory shortages have pushed housing affordability to its lowest level since 1984.

Sales of previously owned homes have declined as lack of offers, rising prices and worries about the economy have deterred many potential buyers.

Monthly payments on a $600,000 mortgage loan with the current average 30-year term would be about $4,028. That's up from $2,601 early last year, before the Fed began raising the benchmark rate.

Follow us on Telegram and Twitter

🔥 Russia, Türkiye and Qatar are preparing a new grain deal

A new agreement to replace the grain deal is being prepared by Russia, Türkiye and Qatar, BILD reported.

According to them, they have obtained official correspondence between the Foreign Ministries and embassies of Russia and Türkiye from July 21 to August 8.

The correspondence shows, that Russia has warned Türkiye of withdrawal from grain deal in advance and that Russia, Türkiye and Qatar are now working on a new trilateral grain agreement to replace the expired one.

It is proposed to supply Russian grain to poor countries, mainly in Africa. Türkiye will act as the organizer and Qatar will act a sponsor of supplies.

According to the publication, the new deal may be concluded as early as this weekend in Budapest.

Follow us on Telegram and Twitter

Türkiye risks facing US retaliation while helping Russia

The ghost fleet of Turkish ships helps Russia to circumvent sanctions, as reported by the WSJ.

Turkish companies have bought dozens of tankers carrying Russian oil, thus allowing Moscow to trade successfully. This fleet now numbers hundreds of vessels around the world, many owned by companies in Greece, India, UAE, and Türkiye.

Many of them circumvent Western sanctions by operating outside normal industry standards, often refusing to insure with P&I Clubs, which are global networks that insure approximately 90% of the world's merchant shipping. Some use a parallel Russian insurance system that was created after the outbreak of the Ukrainian conflict.

And the US authorities are planning to take measures against Türkiye because of its actions, which Washington regards as helping Moscow bypass international sanctions, according to the WSJ, citing a source.

Follow us on Telegram and Twitter

X (Twitter) reportedly receives payment service license in Maryland

Elon Musk's social platform has obtained a money transmitter license for providing payment services in Maryland, US.

Follow us on Telegram and Twitter

Czech Republic takes a risk and buys Russian oil

The Czech Republic is buying 1.1 billion crowns (about 52 million dollars) worth of oil for emergency needs for reserve storage from the Cypriot company Normeston Trading, which, however, is linked to Russia, SZ reported.

According to Pavel Shvagr, head of the State Material Reserves Department, there was no other way, but it’s fine, since the company's owners are not on the EU sanctions list.

But the reporters discovered another problem. According to European Union sanctions rules, neither the supplier of such a large government order nor the subcontractor should represent the Russian Federation. However, the Cypriot company had committed to supply the Czech Republic with REBCO crude oil, which is produced only in Russia.

Under this contract, the Cypriot company will receive 52 million dollars from the Czech budget.

Violating international sanctions in the Czech Republic is a criminal offense that can result in a prison sentence of up to eight years. However, it is unclear at this point whether Czech security authorities undertake an investigation into the aforementioned matters.

Follow us on Telegram and Twitter

The sick man of Europe - now it’s out

British magazine The Economist wondered if Germany's economy is sick. The artwork is also impressive, we might add.

The symptoms, according to the magazine, are as follows:

▪️ Europe's largest economy has gone from growth leader to laggard - may be the only major economy to shrink in 2023. Germany will also grow slower than America, Britain, France, and Spain over the next five years, according to the IMF.

▪️ Germany has begun to be seen as an unsuitable place to live. Four out of five respondents felt this way.

▪️ Trains are now so badly delayed that Switzerland has banned latecomers from entering its territory. Foreign Minister Annalena Baerbock, who was stranded abroad for the second time this summer due to a malfunction of her outdated service plane, canceled a trip to Australia.

▪️ Bureaucracy flourishes - obtaining a license to operate a business takes 120 days - twice as long as the OECD average.

▪️ The industry is no longer a cash cow, the auto industry is already losing to China.

▪️ The country has huge problems with energy - there are no nuclear power plants, cheap gas from Russia has been abandoned, and the industry is very energy-intensive.

▪️ The population is aging, the shortage of teachers has become chronic, and getting a visa is easier for refugees than for professionals.


The magazine recalls that in 1999, Germany was in a bad shape too. Yet a series of reforms in the early 2000s ushered in a golden age.

What it doesn't mention is that Gerhard Schröder, the man who would later call Vladimir Putin his friend, was in charge at the time. His reforms led to impressive results not without the help of cheap Russian resources.

How r u doin herr Kanzler?

Follow us on Telegram and Twitter

😁 Domestic company worth more than GDP of an EU state

The popularity of weight-loss drugs among Americans has helped Danish company Novo Nordisk, which makes them, grow its market value to $413 billion, more than its home country's GDP of about $406 billion.

And according to the Wall Street Journal, this phenomenon is taking its toll on Denmark's economy. It manifests itself in the form of lower interest rates and a stronger currency, the report said.

The sales of these drugs in the US have driven Novo Nordisk's market value to become the second most valuable company in Europe after luxury goods maker LVMH.

The weight-loss drug is expected to generate sales of about $6 billion, with FactSet analysts predicting that figure to grow to $15 billion a year in 2027.

According to the WSJ, the large influx of currency has caused the Danish krone to strengthen against the euro.

The Danish central bank is therefore forced to keep interest rates lower than those set by the European Central Bank to prevent the currency from strengthening too much.

Follow us on Telegram and Twitter