30 September 2016: Deutsche troubles

The problems of Deutsche Bank are bringing back memories.

deutsche-bankForget the Fed, forget oil… Banks are grabbing all the attention of investors right now. And echo’s from what happened with banks at the end of the previous decade can be heard loud and clear in the markets. Deutsche Bank is in big trouble. Will the problems at the biggest bank of Germany be an isolated case or will it be 2008 and 2009 all over again? ‘Deutsche’ used to be a standard of certainty, but not that long after the Volkswagen scandal, another leading German company is bringing embarrassment to the German nation. Apart from the damage that is being caused to the financial sector, what will be the effect on the sentiment in the European Union? Germany has helped the distressed EU economy through some heavy storms this decade almost single-handedly. The fragile recovery of the European economy might get a heavy blow from a changing sentiment among investors in the markets.

white-chapel-logo-smallLooks like investors at Wall Street had been lunching heavily yesterday. The good mood of the morning changed into somber feelings after lunch. All major US indices lost around 1%. Volatility rose sharply and the VIX increased more than 25% in less than 90 minutes during midday. At the end of the session a gain of more than 13% remained in comparison to the close of Wednesday. Our UVXY ETFs gained 12%. Return for the year is now 231%. If the negative mood is carried over into Friday’s session, White Chapel may see a positive result for the quarter after all. Return for Q3 was -2.5% at the end of Thursday’s session. White Chapel did not give a signal yesterday. Our model is slowly but surely drifting from a volatile mood into an inverse one. It may take some time to make the crossing, however. And market conditions have been very unpredictable the last few weeks.

Accumulated capital at close of previous trading day

Return since start

Return this year

Return this quarter

$33,131

+231.31%

+231.31%

-2.5%

Our initial capital was $10,000 at 1 January 2016. Our average Annual Return is 408%.

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René’s Reflections @ Friday: Summer’s Almost Gone

It was the last day of the Summer Of All Summers. The summer that seemed to last forever. And they were going to celebrate like never before. No matter what.
It was the Golden Summer that preceded the Long Winter nobody believed would come. And it was the day before the Big Storm that nobody believed would hit the area.
A boundless party was thrown at the moonlit lakeside with DJ’s, exquisite foods, the best wines money could buy, and a giant crystal punch bowl that was constantly refilled to the brim with champagne.
The party was already in full swing when someone wondered if it wouldn’t be better to prepare for the storm, rather than be caught unprepared. But he was ridiculed and was asked to keep his sobering remarks until after the party.
With nightfall, the party came to a spectacular climax when elaborate fireworks displays lighted up the night sky over the lake. Everybody was impressed and stared in awe at the dazzling view above. Except for the person who was ridiculed moments before: he now wondered who was going to pay for it all. But this time, his voice was drowned out by the noise of the fireworks.
He was the first one to leave, and probably the only one still sober. He turned around once, to see a flock of swans flying up from the lake, and noticed that one of them was black.

Morning found us calmly unaware
Noon burn gold into our hair
At night we swim the laughin’ sea
When summer’s gone
Where will we be?

Jim Morrison

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