After Pivot
Blu Family Office Blog
by Christian Armbruester
3d ago
The Fed did what they had to do. The market had other ideas, and the two-year yield on Treasuries is now fifty basis points lower than the one-year, but still some seventy basis points higher than the ten-year. You would have to go back decades in time to see anything quite like this, but the implications are quite extraordinary. Clearly, the market has convinced itself that the fight against inflation is over. That’s probably a tad optimistic, given the tightness in the labour market and rising input prices in the service sector, but who are we to judge. For the moment, there is every reason ..read more
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Is Tech Back?
Blu Family Office Blog
by Christian Armbruester
6d ago
Tesla is now up 71% from its January lows, but still down 56% from the highs the year before. That’s when you tend to lose people who don’t have a grasp of numbers. Fact is, other tech companies that were battered in the great sell off in 2022 are up strongly as well. Does this mean the Nasdaq is back? Maybe. Last August, the index also rallied more than 20%. We all thought the good times were here again, before falling all the way back to whence we came and worse, making new lows. However, things are certainly different this time around. The macro environment has changed. Yes, don’t laugh. W ..read more
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Sur(prise)
Blu Family Office Blog
by Christian Armbruester
2w ago
It was a glorious year. The Nasdaq was up 86% and everyone made money. We were a bit worried about what would happen when the VHS recorders and all the global computer systems flashed 0:00:00, but we partied like it was 1999 (Prince). We also launched the Euro, and it changed everything. Used in 15% of world trade in goods, 30% of all currency transactions, and contrary to prevailing expectations, it is still going strong. For good reason. It takes time to clear the Greenback through the US banking system and it costs money. There are also those who prefer the land in which the Cowboys lost t ..read more
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Bubbles
Blu Family Office Blog
by Christian Armbruester
1M ago
One by one, the covid induced tidal waves of excesses have been swept away. Down is the NASDAQ by some 35%, crashed have all the cryptocurrencies, and even Tesla has lost three quarters of its value while Elon sorts himself out with the extremists on Twitter. History suggests that once bubbles have deflated, they never come back. Tulips are not selling at €700,000 (in today’s money) anymore, Tokyo’s imperial palace is no longer worth more than all of California, and a one bed flat in Chelsea can now be had for less than £10 million (just kidding). However, there are notable exceptions. Lest w ..read more
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Fusion
Blu Family Office Blog
by Christian Armbruester
1M ago
Amidst all the doom, the gloom, and the bitter cold, there it was, a shimmer of hope. An abundance of clean energy to save the world from its otherwise certain destruction. Fusion power will solve everything, but the question is what happens thereafter? Clearly, some of the former titans of the global money spinning and power machine would lose a lot of lustre. Economies dependent on natural resources would collapse, and many people hereto employed in the mining, drilling, and exploration business would be made redundant. Much would depend on the practicalities of delivering power to our home ..read more
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Virtual
Blu Family Office Blog
by Christian Armbruester
2M ago
A world in which we do things without physically being present has been around for a very long time. Early computer games in the eighties opened the door. Shopping and internet banking soon followed, and the things we do online now, we can no longer live without. Digital, virtual, metaverse, or whatever you want to call it, mankind’s foray into another reality is all but complete. Certainly, it is a generational thing and just look at what our kids are doing with their screens. However, everyone can buy into the fantasy of being able to do things we otherwise could not. There are no limitatio ..read more
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Euro Stocks
Blu Family Office Blog
by Christian Armbruester
2M ago
For our American friends, any stocks outside the land where the Dallas Cowboys play are considered another asset class and as such, deserve little attention. The British no longer care, and the rest of the world hardly takes notice. Yes, the Eurostoxx 50 must be the most unloved index in the world. However, that hasn’t stopped it from going on a tear as of late, outperforming the FTSE by 10% and the S&P by 7% in the last two months. You would think the Euro has something to do with that, but if anything, it is more of a headwind whilst strengthening. Could it be the resurgence of the econ ..read more
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Brexit Transuerso
Blu Family Office Blog
by Christian Armbruester
2M ago
It’s the gift that keeps on giving, and Brexit was in the news again last week. Talk of a Swiss-style arrangement made the rounds, before being swiftly dismissed for good reason. The appeal of being your own boss, setting your own rules, and doing whatever the political donors want, is too great indeed. The problem is, we just cut off more than 40% of our trading volume and businesses are struggling with a shortage of skilled labour. Say what you want about the largest common market in the world, but in the middle of a global supply chain crisis, it sure would be nice to source input from rig ..read more
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Budget
Blu Family Office Blog
by Christian Armbruester
2M ago
The problem with budgets is that they have to balance, which left the Chancellor sitting between the proverbial rock and a hard place. On the one side we have inflation, which means the welfare state needs more money. We also have a huge bill for all things Covid with estimates topping £400 billion for all that fiscal and monetary stimulus. On the other side we cannot borrow any more, as interest rates are a lot higher than they used to be. Betting on growth was an unmitigated disaster, so the only way this was ever going to go was higher taxes. The only question is, who is going to pay for i ..read more
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Bottom
Blu Family Office Blog
by Christian Armbruester
3M ago
After last week’s first tangible sign that inflation may very well have peaked, is it time to pile into the stock markets? Maybe. There is no doubt that the largest, fastest interest rate hikes in history have done some damage. No one is borrowing at these levels to take a punt on Metaverse real estate anymore. That’s good. Some technology stocks with no earnings have also been pummelled to oblivion and stocks generally seem more fairly valued after the year’s sell-off. That’s even better. The main problem continues to be geopolitical. The war in Ukraine and the associated energy crisis have ..read more
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