6 February 2017: Next financial crisis

It is no longer a question if a next financial crisis will take place, but when. US President Donald Trump signed an executive order that will roll back post-crisis Wall Street reform (‘Dodd-Frank’). Futhermore, US senator Patrick McHenry sent Fed President Janet Yellen a letter, in which he urges her to stop “negotiating international regulatory standards for financial institutions among global bureaucrats in foreign lands”. If the US follow McHenry’s plea, the country could pull back from a global agreement on banking regulation. For other countries and banks, this might exactly be the excuse they need to block further reform of the banking sector. In the short term, the financial sector will benefit from the actions described above. But in the long run, the financial sector will not be the only loser…

white-chapel-logo-smallA better than expected jobs report sent stock prices north last Friday. The S&P 500 added 0.73%, the Dow 0.94% and the NASDAQ 0.54%. The VIX eased dramatically and is below 11 points now: 10.97 (-8.05%).  At the beginning of the session, we sold our UVXY ETFs with a loss of 4% for the day. Overall, this trade suffered a loss of almost 26%. Our newly acquired XIV ETNs added 0.2% during the trading session. As a result, return since the start for our model is now 168%.
White Chapel is not close to another trading signal.

Accumulated capital at close of previous trading day

Return since start

Return this year

Return this quarter

$26,812

+168.12%

-33.49%

-33.5%

Our initial capital was $10,000 at 1 January 2016. Our average Annual Return is 146%.

RS_v05-smallOn Saturday, René received a postcard from Japan. It was sent by his dear Keiko on 21 December last year.
So, it took the postal services more than six weeks to deliver the card to him. Why so long? After all, it’s just a distance of 5,700 miles. And we’re talking about a postcard here, not a heavy cardboard box that produces some strange ticking noise. Could it be that the postal services needed some time to decipher the Mark Twain quote printed on the front? Maybe they found out that it is incomplete, that something is missing. And when someone at customs notices that something is not quite right, whatever that may be, the item will be diverted for further inspection.
The unabridged quote is: “Life is short, break the rules, forgive quickly, kiss slowly, love truly, laugh uncontrollably, and never regret anything that made you smile. Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.”
After several weeks, customs decided that this text was not part of some secret code, and they let the card pass.
Though it’s more likely that some postal service just messed up the delivery big time, for no apparent reason. And if René would bet on it, he would say that it happened after the card had left Japan.