7 September 2017: German frugality

‘The Germans are bad, very bad’. Some months ago, US President Donald Trump vent his spleen about the fact that he saw too many cars made by German manufacturers on the road in the United States. Research by two economists from a major bank in the Netherlands, Jesse Groenewegen and Daniël van Schoot, shows that it is even worse. Not only do the Germans build cars that are desired by consumers all over the world, but they also spend relatively few euros on consumer goods and they are definitely not the first to spend their savings on investments, at home or abroad. Just like their neighbors in the Netherlands, by the way. ‘Frugal’ is a word that comes to mind. Groenewegen and Van Schoot demonstrate that the Germans and Dutch compromise their interest by these under-investments: the return on their savings is relatively low. Donald Trump would welcome it very much if the Germans would spend more of their money, although it is not very likely that they would do so by buying American cars.

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US stocks ended higher Wednesday. Investors shrugged off concerns regarding North Korea. Furthermore, President Donald Trump and lawmakers were able to reach a deal to extend the deadline on the debt ceiling by three months. The S&P 500 rose 0.31%, the Dow gained 0.25% and the NASDAQ closed 0.28% higher. Volatility eased: the VIX is back below 12 points, closing almost 5% lower. UVXY ETFs recorded an almost identical loss: -4.5%. XIV ETNs gained more than 2%.
Danny Daredevil has trouble taking off: his RSS dropped to 81%. Adventurous Anny was unchanged, while she is still holding cash. Solid Suzy and Lazy Larry are back above 20% as far as their RSS is concerned.
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

80.83%

-55.14%

-58.46%

42%

Adventurous Anny Cash 6 March 2017

3.84%

3.84%

-25.11%

8%

Solid Suzy XIV 6 March 2017

22.15%

22.15%

-2.41%

48%

Lazy Larry
XIV 6 March 2017

22.15%

22.15%

-2.41%

48%

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

 

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In case you live in the Netherlands, take a minute to look up to the skies today.
Chances are that you will see a color pattern that resembles the one as displayed in the photo below.
If you do, enjoy it.
It will probably take a while before you will be able to see it again.