10 April 2017: Foxes to guard chickens

In Het Financieele Dagblad, the influential economist Alan Blinder is interviewed on the Trump administration. Blinder is especially critical on the power that President Donald Trump has to appoint the national financial supervisors. He considers Trump’s plans to abolish the Dodd-Frank act as a bad omen. “Donald Trump wants to appoint foxes to guard the chickens. The Dodd-Frank act was meant to protect ordinary citizens against Wall Street. But in the Trump world, it turns out that Wall Street should be protected against the ordinary citizen”.
If Blinder’s analysis is correct, we might be heading toward a next financial crisis. This will not take place this year or the next, but the build-up of unregulated greed will end in tears at some stage in the future. Its scale will very likely be unprecedented.

white-chapel-logo-smallInvestors appear to get somewhat more worrisome about stock valuations and the implementation of President Trump’s economic policies. All major US indices closed Friday lower than the week before. The VIX was on the rise and closed at almost 13 points (+3.9%). UVXY ETFs recorded another gain: more than 7%. XIV ETNs lost more than 3.5%.
Danny Daredevil closed a very good week in style and recorded another all-time high: his RSS is now at 407%. AAR stands at 260%.
Adventurous Anny is still holding cash. Her RSS remains at 22%. Solid Suzy and Lazy Larry had to take another loss. Their RSS dropped to 4.5%.
None of our models gave a trading signal at the end of yesterday’s session.

Model Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil UVXY 1 January 2016

407.33%

25.85%

8.23%

260%

Adventurous Anny Cash 6 March 2017

21.78%

21.78%

0.00%

784%

Solid Suzy XIV 6 March 2017

4.48%

4.48%

-4.60%

62%

Lazy Larry
XIV 6 March 2017

4.48%

4.48%

-4.60%

62%

RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return

 

During the Dutch National Museum Weekend, Tim went to an exhibition of 220 objects that were made in the Volt light bulb factory. This factory not only produced millions of light bulbs during the period between 1909 and 1990, but also radio valves, miners’ lamps, X-ray tubes, batteries, dyno torches, and shaving heads.
The exhibition took place in hall 553 of the former Volt factory. This location now houses Fablab013, an urban workshop in which everybody can make or be assisted in the making of objects that are created by laser cutting, 3D printing, foam cutting, etc. Tim was most impressed by a technique which is called plasma cutting. It is a process that cuts through electrically conductive materials by means of an accelerated jet of hot plasma. Typical materials cut with a plasma torch include steel, stainless steel, aluminum, brass, and copper. The operator explained that plasma is the fourth state in which materials can appear, next to solid, liquid or gaseous.
Tim became convinced that the application of a plasma cutter to a plasma television would make for an unequal contest…

 

 

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