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March 26, 2015

Running in place

Filed under: Forex Strategies — Tags: , — admin @ 4:43 pm

A 1.5% downday, and the SPX is basically unchanged on the year.   There’s a reason that Macro Man hasn’t written too much about equities recently, and that’s it in a nutshell.  For the first three months of the year, US equities have been a bloke on a treadmill, running at a brisk pace simply to stay in place.

Not that this has come as any great surprise.  In October, Macro Man noted that liquidity factors were the primary explanatory variable for the S&P’s stellar run of performance over the past few years, and with the tap being turned off (in the US at least) there was naturally some reason for concern over future returns.

Indeed, more than a year ago Macro Man performed an analysis of the SPX’s return and vol by Fed policy regime; he thought that he had published it here at some point over the summer, but he’s deuced if he can find it.  Regardless, the analysis suggested a very bullish outlook for US equities as long as the Fed was a net purchaser of assets, and a dim prognosis whilst the Fed did nothing.   He’s taken the liberty of updating the study for the full body of the Fed’s QE Era (Dec 2008- Oct 2014); a summary of the results are below.

As you can see, based on this study, the right question for US equities is not “why aren’t they going anywhere?”, but “why are they doing so well?”  Since the end of October, the SPX has generated an annualized price return of 5.4%, with a vol of just over 13%.  Of course, a number of ancillary factors have also impacted the price- ECB QE, the collapse in energy prices (bad for producers, good for energy consumers), and of course, the shifting sands of Fed policy expectations.

There are, of course, limits to this type of analysis, given the paucity of truly independent samples.  Even going back several decades delivers little more than a handful of policy cycles, which is really an insufficient number from which to draw strong statistical inferences.  For what it’s worth, a year ago Macro Man also performed a study on SPX performance by orthodox Fed policy regime, splitting the cohort into the first 6 months of tightening/easing, subsequent tightening/easing, and on hold (defined as no policy moves for the last 6 months.)  The results are set out below.

On the face of it, this might suggest that a rate hike might be the best thing to ever happen to the US equity market, but correlation does not of course imply causality.  One might posit, for example, that early-stage and subsequent tightening cycles are driven by robust economic activity, which would naturally prove supportive of stock prices.  The lower returns from on hold and easing, meanwhile, would reflect the weak underlying economic conditions justifying those policy stances.

In the current environment, the expansion is already somewhat long in the tooth when measured by the calendar (though not by the credit cycle), and earnings have had a lot of “unnatural” support baked into the cake thanks to uber-accommodative policy over the last six years.  This is unlike any of the scenarios captured in the data set above.

Current and future financial conditions in the US look set to be tighter than those of the past several years, so it seems natural to expect equity performance to be worse (and, cough cough, macro performance to be better.)  That being said, Macro Man’s model is still somewhat bullish of the SPX, which informs a moderately long strategic position even as he is agnostic tactically.  He is following developments in the model and the market from afar, however, and is ready to change his stance when and if circumstances warrant.

In the meantime, there’s always the DAX, though it certainly looks like at least a good chunk of the easy money’s been made in that one for the time being….

June 26, 2013

We don’t believe real estate is a good hiding place either? Here’s why…

Filed under: Currency — Tags: , , , , , , , , , — admin @ 2:24 am

Quotable

Through tattered clothes great vices do appear;
Robes and furred gowns hide all. Plate sin with gold,
And the strong lance of justice hurtless breaks.
Arm it in rags, a pigmy’s straw does pierce it.
None does offend–none, I say, none. I’ll able ’em.
Take that of me, my friend, who have the power
To seal th’ accuser’s lips. Get thee glass eyes,
And like a scurvy politician seem
To see the things thou dost not. Now, now, now, now,
Pull off my boots. Harder, harder.

William Shakespear, King Lear

Commentary & Analysis
We don’t believe real estate is a good hiding place either? Here’s why…

Recently, a newsletter guru (who shall remain nameless)listed several reasons why he believed real estate would be a great place to put cash. We were surprised because we don’t believe real estate will be a haven after another major washout in global markets if global demand doesn’t materialize soon.

It justso happens a good friend of ours, his name is Clive, agrees. We have printed below Clive’s wellreasoned and articulate responses to said newsletter guru’s consensus rationales for buying real estate. We couldn’t have said it better…thanks Clive.

Guru: We have to be prepared for when it does happen. How? Probably the best way is to buy real estate with long term, ultra-low, fixed-rate mortgages. Non-recourse, if possible. In September 2011, we recommended you increase your family’s allocation to real estate to take advantage of this unique situation. It was a better investment then. Still, now is not a bad time to invest in bricks and mortar.

Clive: This idea of [said guru] is so appealing that I thought I would try it, a few months ago. I couldn’t make it work. I bought my house in New Hampshire, in 2010 because I like the house and it is part of a 100 acre farm which provides good food for six months of the year. It has been a great place to live, but a bad investment. The market price has declined by 40%. I hoped it would decline only 20% because the housing market had already taken a hit. Next year I may be able to get my property tax reduced… maybe. If so, I’ll lose less over time.

Guru: US real estate is an ideal investment for this non-recovery world. Here’s why: It is relatively safe. In the case of a financial Armageddon, real estate is still valuable. It doesn’t go away.

Clive: Land may be safe, but real estate (buildings) burn, with their contents, in revolutions. Both are almost impossible to liquidate when there is the slightest whiff of trouble. Moving them is even more difficult. Over the last century, there were lots of Russians, East Germans, Chinese, Africans, South Americans… who found out the hard way about “real estate”. All they have left is worthless title deeds. The US may be a little more stable… until it is not. It wasn’t so long ago that fine Southern families moved from their land with nothing more than their good manners and empty stomachs. Factories in the North needed cheap labor.

… and the parasites? OMG. Real estate taxes, insurance companies with their “requirements”, lawyers, accountants, contractors, all those regulations… and that is before dealing with the realities of physical maintenance. Houses and property are sitting ducks for extraction purposes.

Guru: Average US home prices have risen about 12% year-over-year. But they are still reasonably cheap – depending on where you buy. If central banks succeed in tapering, real estate and rents will probably both rise.

Clive: It seems to me that real estate is being bought with funny money. The "investors" take their bonuses, short term profits and steal the money in the form of "salaries" and handling fees, but when the Taper sharpens it teeth, surely the buying will stop and prices will drop? An increase in interest rates will also dampen enthusiasm, especially if there is no real growth. Perhaps inflation will eventually increase nominal prices, but I don’t anticipate much demand from a declining population.

Guru:…If they don’t, your mortgage gives you a free "option." If yields rise after 32 years of trending in the other direction you will get a windfall. If they don’t, you will still have your rental income (or personal use). If you have financed on a non-recourse basis, you are in an even better position. You have made a one-way bet. You can only win.

Clive: Unless the property price declines! I could not find a bank that would give me more than a five year fixed mortgage. After that, it "floated". No thanks. I paid cash for my house rather than have to deal with all the parasites that climb aboard as soon as a bank is involved.

I am stuck in my house unless I want to take a loss now, but property prices could decline more, just like the stock market, gold or anything else that has not yet had its day of reckoning. Only in the fantasy world of T.L. Friedman are house prices destined to increase with more government subsidies and mortgage interest tax breaks.

It’s over. Populations in advanced economy countries are declining with the decline of cheap energy (oil). The Fed doesn’t really care about house prices and they can do nothing about it short of sending everyone a check for $100,000 a year. They could! They have our addresses from our tax returns. Krugman would be thrilled, but even the smug bearded Ben is not likely to do that. The Fed cares only about the Government and keeping interest rates low to reduce the cost of their obligations. That manipulation will work only as long as other nations accept our debt but a bit of trade "re-balancing" could make some people really unhappy. Interest rates will probably rise… slowly, not like the 1970s because baby booming is out of fashion.

Guru:– Can you lose? Of course! If property prices fall and continue to fall… and rental rates fall too… you will lose money. Maybe serious money. (Unless you have a non-recourse mortgage.) This is a possibility. But it suggests a level of deflation I believe would be intolerable to the authorities.

Clive: Of course the authorities don’t want a decline. They have all their economic models based on GROWTH. It worked as long as there was cheap energy. Populations increased and everyone had two houses, cheap food, a car or two, a lawn and it was onward and upward. Things are different now. Energy is becoming more expensive and complicated. There are no more gushers. The intolerable deflation is beyond the control of the authorities. They are going to get it whether they like it or not, probably in a place they won’t like.

Guru:– That is when Bernanke or his successor would be likely to resort to Overt Monetary Financing, aka "helicopter money." This has already been widely discussed in the press. Central bankers are already considering it. In an emergency, it wouldn’t be long before they would use it. Then, like my parents in the 1970s, your mortgage will seem like a gift from heaven.

Clive: I think it will be very difficult to "induce" inflation with helicopter money. Food stamps, welfare (social and corporate) and "defense" spending cannot last forever at China’s expense. Middle class people are sick of credit. During the last fifty years, credit allowed leveraged investments to grow very nicely. The bigger the credit, the safer the loan. Ask Donald Trump. Now people think they may have to pay back their loans and that makes them upset. Nobody wants more credit. They want less. The mentality has changed. Having "free time" (to talk on a cell phone for example) is much more valuable than having a pile of stuff bought on credit because it will be "more valuable" in the future.

This is a devil of a problem for us long term investors. I don’t see real estate being a good investment other than as a place to live. Owning gives some liberties that renters to not have, but it does not give the important liberty of "leaving" at a moment’s notice.

A big pile of cash appeals to me more than a pile of bricks and mortar… at least until the market has sorted itself out. That may still take a few more years. Then I will buy a pile of gold and who knows what… maybe real estate, or more [xxx]stock. If I have cash, I’ll be king! I hope my house does not make me a poor king.

….

I provide two charts and some commentsfrom our recent Global Investor macro view to support Clive’s arguments and make it quite clear the Fed is losing the battle no matter how much “helicopter” money it spends(rising bank reserves and a tumbling monetary velocity tell us Fed stimulus isn’t getting where it was supposed to go).

…If the primary rationale for holding stocks is based on faith in central bankers, then what follows is an implicitly belief stocks as an investment class are primarily liquidity-driven speculative vehicles. A more nuanced view accounts for the power of liquidity and the discounting value of futures earnings in a zero interest rate environment. But implicit in this view is a belief said future earnings, presently supporting these discounted cash values, are tethered to the underlying growth opportunities where these businesses operate.

Secondarily, those who have placed their full faith in central banks see little chance of a negative feed-back loop stemming from the wholesale manipulation of money and credit. A couple of possibilities for negative feedback include: 1) a huge jump in price levels (inflation) should the weight of banking reserves circulate back into the real economy. Banking reserves have increased stunning 2004% since they began ramping up in August of 2008 as a result of the credit crunch; if real economy lending opportunities were abundant and consistent with US growth optimism, we wouldn’t be seeing a surge in banking reserves:

We believe deflation isthe problem facing the global economy; not inflation. How else could one explain the relative calm in global headline inflaiton indicators(with mandated and regulatory costs as exceptions) given the massive amount of money and credit created globally? So, although there is logic to the inflaiton argument, we believe the real economcy is signaling global inflaiton is a problem for another day, that day could be years away.

2) A deflationary spiral, or long period of extremely low growth (the Japanese quagmire for Europe and the US) is the more likely scenario given what the Austrians refer to as malinvestment. We could witness a complete loss of credibility in the Fed as key players abandon their belief in Keynesian-style stimulus.Monetary and fiscal policy failure in attempt to avoid the so-called “Keynesian liquidity trap” (a false premise) is already evident by the performance of the real economy. The excerpt below, taken form “Liquidty Trap or Malinvested Resources” provides a clear and logical rationale why monetary and fiscal policy is now likely doing more harm than good to the structure of the economy:

Economists of the Austrian school give another explanation, which resorts to neither Keynesian policy prescription and in which there is no such thing as a “liquidity trap.” Last week I wrote of malinvestments, which are investments made during the a boom that cannot be sustained because consumer spending patterns, which ultimately determine production structures within the economy, will not permit investments at their previous levels. (The collapse of the housing boom created the present situation.) Austrians note that government actually retards economic recovery by holding down interest rates. First, government tends to target new money created by the banking system toward those industries that have become depressed, ignoring the malinvestments that originally put them into that situation. Thus malinvestment persists, pulling capital and resources from economic sectors that originally were not as badly damaged during the boom and subsequent recession.Second, economist Robert Higgs notes that government activism to end the downturn creates what he calls “regime uncertainty.” In its efforts to “do something,” Higgs notes that governments often are hostile to private property rights and discourage long-term investments by healthy firms. Furthermore government is even more hostile to profitable firms and successful individuals, claiming they are not “paying their fair share” of taxes, making future investment less certain.

The U.S. economy recovered nicely from a severe recession in the 1980s, even with double-digit interest rates and low rates of inflation, which Keynesians would claim to be impossible. True, government spending rose during that time, but not nearly at the rate it has risen the past few years.

There was no “Keynesian situation” then, and there is none today. There only are malinvestments.

If monetary and fiscal policy were at best neutral, why have we seen a complete collapse in monetary velocity? The monetary velocity ratio has collapsed to its lower levels in recorded history going back to 1959.

Though there are many valid criticisms of the velocity of money concept, we do think it does point to one important reality–there is a strong and growing demand to hold greater levels of cash which in itself it a reflection of both fear and uncertainty in the economy. It is also helps explain why monetary stimulation has not sparked the real economy, but has been funneled increasingl into financial assets via bank reserve leakage.

Unless we see a rebound in US demand, coupled with a rise in real income, it seems unlikely to me that real estate will sustain recent gains given what Clive calls “funny money” going into real estate. A break in financial assets means a fall in collateral as many leveraged funds have to sell collateral to cover stock margin. There is big “fund” money now invested in real estate, and much of that investment has been subsidized by our government–you and me, in other words.

Stay tuned.

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March 16, 2011

Researcher changes tune on Better Place

Filed under: Business — Tags: , , , , — admin @ 12:22 am

FORTUNE — Earlier this month, Fortune‘s MotorWorld reported on a new study by the British consultancy Trend Tracker that throws cold water on the enthusiasm for electric vehicles by arguing that they are unacceptably expensive and impractical. The report singled out Better Place, the high-profile startup by venture capitalist Shai Agassi, as a case study in questionable EV economics. [See “Better Place gets slammed in new report.”]

Within a few days after our column appeared, Trend Tracker withdrew its critical comments on Better Place and replaced them with a neutral description of the company’s activities. Toby Procter, one of Trend Tracker’s founding directors explained that Better Place had provided it with further information in response to coverage in Fortune as well as the Detroit News.

A big chunk of the new information came when Better Place announced the pricing structure for its battery-swapping venture in Denmark. Consumers will be able to buy a Renault Fluence Z.E. , the only car that has been designed for battery-swapping, for $38,480, including VAT. A home charging station for the electric car will cost $1,876, and monthly usage charges will range between $280 and $562, depending on mileage driven. While that seems high to Americans used to $2.50 gas, the revised report quotes Better Place’s assertion that consumers will save 10% to 20% in total cost of ownership due to Denmark’s favorable EV policy and the high price of gasoline.

The original Trend Tracker report contained a scathing analysis of the risks of a Better Place investment that has been dropped from the new version. Better Place argues that the analysis is wrong and cites as evidence “nearly twelve months of due diligence on our business model” conducted by HSBC before it decided to invest $125 million in Better Place last year. The revised report also cites battery-swapping projects under evaluation in China Korea, Taiwan, Japan and Australia as evidence of Better Place’s growth potential.

While providing an uncritical view of Better Place in the new version, Trend Tracker does not change its overall conclusion that EVs are likely to remain very much more expensive and far less useful than their present-day conventional counterparts in the medium term. It estimates EV production would need to increase by an average of two million units per year over 23 years to effectively electrify the global car market by 2050. Even if cumulative EV sales reached 30 million units by 2050, 99% of the world’s car park would still be dependent on fossil fuels.

Not surprisingly, Better Place disagrees. Its spokesman tells Fortune: “It’s certainly your prerogative to use their forecast although given how fundamentally flawed their two-page analysis of Better Place was, I can only imagine the accuracy of the rest of the 240 page report. There are more credible and well informed reports out there, sizing the market.”

Looks like the debate over the future of EVs — and exactly where Better Place fits in it — is just heating up. To top of page

March 11, 2011

ECB’s Bini-Smaghi: Govts must put in place binding deficit measures

Filed under: Central Banks — Tags: , , , , , , , — admin @ 5:47 pm
  • Rates must adapt to new inflationary pressure
  • Debate on aid mechanism must end, must take action

EUR/USD is triggering stops above the 1.3850 level, trading as high as 1.3858 so far.

November 11, 2010

ECB’s Stark: Will keep support measures in place as long as needed

Filed under: Central Banks — Tags: , , , , , , , — admin @ 5:40 pm

The ECB has been talking exit strategy in recent months but the flare up in sovereign debt woes has them backpedaling a bit.

Case in point: ECB chief economist Stark says the ECB has been withdrawing support measures but that they will keep them in place as long as needed.

With the Irish banks on life support, don’t expect the ECB to pull the plug anytime soon.

There are signs the euro zone recovery is nearing a self-sustaining recovery. He also says new fiscal rules do not go far enough.

October 25, 2010

Greek central banker: Extraordinary measures need to be kept in place

Filed under: Central Banks — Tags: , , , , , , , — admin @ 8:46 pm

We have the head of the German central bank telling us today that extraordinary measures need to be wrapped up ASAP while we have the other end of the spectrum, the Bank of Greece chief Provopolous saying that extraordinary measures should be kept in place because money markets have not returned to normal.

ECB rates are appropriate, says the Greek banker , while praising the bond buying program as effective.

The worst of the Greek banking crisis is over, he says while announcing that additional stress tests fro Greek banks will be conducted by the end of December.

Oh, goody. Something to look forward to….Greek stress tests…

September 27, 2010

RMB Appreciation Accelerates, but Dollar Peg Remains in Place

Filed under: Chinese Yuan (RMB) — Tags: , , , , — admin @ 11:11 am

The Chinese Yuan has touched a new high, at 6.69 USD/CNY. Given that the Yuan has still only risen about 2% since the peg was officially loosened in June –  with most of that appreciation taking place in the last couple weeks – there still remains intense pressure on China to do more.

Last week’s intervention by the Bank of Japan diverted a tremendous amount of attention towards the Yuan. In fact, many analysts have argued that it is only because of the Yuan-Dollar peg (itself, as well as the Chinese purchases of Yen assets that it engendered) that Japan was forced to act: ” ‘Countries see that getting involved in currency manipulation is a way to give themselves an advantage’…’China, their actions affected Japan, and Japan is affecting us.’ ” The Yen intervention could also force the G20 to re-focus its attention on the Yuan, and at least devote some discussion to it at the next summit.

CNY USD 1 Year Chart 2010

It should be noted that the two soundbites above both emanated from US Congressmen, which is important because the US government is currently mulling action on the Yuan currency peg. Politicians are growing tired by the Treasury Department’s repeated failure to call China a “Currency Manipulator,” which would require diplomatic talks and even trade sanctions. The Treasury will have an opportunity redeem itself in its next report on foreign exchange, due out on October 15, but it is expected that the report will either be delayed or released without adequately addressing the undervalued Yuan.

In fact, Treasury Secretary Geithner testified before Congress last week, and at least admitted that something needed to be done: “The pace of appreciation has been too slow and the extent of appreciation too limited. We have to figure out ways to change behavior.” However, this was only in response to acerbic criticism – (Senator Schumer told him, “I’m increasingly coming to the view that the only person in this room who believes China is not manipulating its currency is you.”) – and he ultimately failed to outline a timetable/blueprint for action. Despite the consensus among politicians (and President Obama) that the currency peg is harmful to the US economy, Geithner made it clear that the Treasury Department continues to favor unilateral action towards dealing with problem, without Congressional intervention. For now, then, politicians are probably relegated to saber-rattling and name-calling.

China’s response to this charade has been predictable. Trade representatives hinted that China wouldn’t bow to external pressure, and that any attempt at “punishment” would be met with countervailing actions. China also questioned the economics between arguments that the Dollar peg contributes to trade imbalance, calling such claims “groundless.” This position is actually supported by the notion that while the Yuan appreciated by 20% against the Dollar from 2005-2008, the US/China trade deficit actually widened.

In practice, China is likely to stick to its policy of gradual Yuan appreciation, or a few reasons. First of all, while Chinese policymakers know that they don’t need to wholly appease US politicians, they at least need to pretend that they are listening. It’s true that the US is dependent on Chinese products and its purchases of Treasury Bonds. However, it is arguably just as dependent on the US to buy its exports, which promotes employment and social stability, and it is keen to avoid a trade war if possible.

Second, a long-term appreciation of the RMB is actually in China’s best interest. If it wants to spur domestic consumption and promote more value-added manufacturing, it will need a more valuable currency. Outbound M&A, especially involving natural resource companies, will also be more economical if the Yuan is worth more. Also, if China has any serious ambitions of turning the Yuan into a global reserve currency, it will need to create capital markets that are deeper and more liquid, which it is currently unmotivated to do, lest it spur demand for Yuan by foreign institutional investors.

Finally, China should let the Yuan appreciate because it is financially gainful to do so. As I mentioned above, its trade surplus with the US has widened over the last few years as prices for its exports grow along with quantity. Meanwhile, prices for imports and prices paid for commodities and other natural resources have declined in Yuan-terms. For that reason, I think China will probably continue to stick its current policy, and allow the RMB to continue to slowly inch up.

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September 20, 2010

A Sunny Place for Shady People

Filed under: Forex Strategies — Tags: , , , — admin @ 4:46 pm

This was how Somerset Maughan described Monte Carlo in the 1920s and following on from our conference notes from Asia, we thought it worth a post on one member of TMM’s trip to the Principality last week, for if it’s September it must be Monaco – well, it is if you are in reinsurance. We aren’t, but it is nice to be invited!

Every year the hard working denizens of Lime Street, London and their lucky compatriots from “‘hardly any tax, old boy’ Bermuda”, plus poor souls from other far less prepossessing places (Columbus Ohio, anyone?) swoop on Monaco in an orgy of pointlessness. The Annual Reinsurance “Rendez-Vous” attracts many hundreds of movers and shakers. Well, maybe 10 or so really big-swinging dicks, and about 2000 hangers on, schmoozers and bag carriers – plus an endless parade of “independent consultants” – i.e. those who have lost their jobs in the real firms.

Why are they there? No one seems to have the slightest idea, other than it’s all about“relationship management”. But hey, it’s all on expenses! And what expenses. It’s all a dizzying round of dull champagne receptions where rotund insurance types discuss run offs and capacity whilst ogling the occasional Brazilian “secretary”, who always seems to be on the arm of some mystery underwriting guy. Apparently he’s very important but nobody quite knows who he is.

So what can we report on from this Mount Olympus of financial summits? Errr… Well, it would seem that if there is one industry that is looking to profit from the BP disaster its the the insurance mob who have suddenly been handed a new event risk to strap all sorts of new fangled insurance derivatives around. We know that the probability of a rare event reoccurring is always over estimated immediately after its occurrence, so you can sympathise with their sales logic. But should we be worried over the parallels between the blow up in the banking derivatives that caused the financial crisis and the current desperate scramble for “innovation” in insurance products? In Markets, “innovative” normally means a novel way of strapping the basics together in order to hide greater costs and spreads to the client. When we hear that the French insurer Scor announced at this year’s event that it plans to offer insurance on yaks in Mongolia, we wonder if this is some form of Insurance sub-prime indicator.

And Monaco itself? Well, in a delicious juxtaposition, Barclay’s continue to occupy the top end of Casino Square looking right down on the “venerable” institution itself (Vince Cable would be left confused as to which way to turn). Last year they were still Barclays Bank, but now the sign proclaims Barclays Wealth, so that’s reassuring. Of course Monaco has nothing to do with wealth. A rather brutal critic once pointedly observed that Stephen Fry is a stupid person’s idea of a genius – so it is, with Monaco and money. Only a financial dullard would believe that the Monaco Bling, Bentleys & Birds formula equates to real money. In truth the place is a sort of Eastbourne with sunshine. Ancient types drive fast cars in first gear, sometimes for up to two miles, before retreating to hugely expensive rabbit hutches of one bedroom and half a bathroom, whatever that is.

So there is money there then? Well only if you believe that owning a Bentley made by the same firm that knock out Skodas is a sign of wealth (a cursory glance of motor trade periodicals in the UK will show £40k secondhand Bentleys littering the forecourts of such outré places as Maidenhead and Stoke Poges). So who are these elderly drivers? Mainly the lucky small winners in life – those who sold the pasta factory in Milan for EUR 10million and, having fled the dreadful wife, are brushing up on interviewing Brazilian secretaries… Oh and of course the crooks. But no need to mention them much – they’re just so unimportant.

So Monaco drifts along believing in its own importance and shallow hype about it’s “mega wealth”. In truth, the wealth there is a fraction of the investment banks’ bonus pools, and anyone who understands finance knows it and so is not remotely interested in the Grimaldi’s little seaside town. But what about the high rollers? Well, your correspondent visited the Casino (no, not Barclay’s Wealth) and found the 5 Euro roulette table crowded with just four players and no other tables open at midnight… Hmm… One wonders if Eastbourne might not be the better bet for the Rendez-Vous boys next year? Does Sussex have any Brazilian secretarial services?

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