12 Years of VP vs Noise
Sharing the ideas and experiences that have influenced our work
Inflation Alive and Well in the US
We have focused on the theme of the misplaced fear of deflation at Variant Perception frequently over the past 18 months. At several points, markets and commentators seem to have become preoccupied with a belief that growth-destroying deflation was imminent. Using...
Excerpt from VP Tactical Report 9th Feb 2016: Sell EURSEK Rallies
From our Tactical Report of 9th Feb 2016: We like selling EURSEK to play the weak euro theme as the market looks towards the ECB meeting in March. Sweden’s economy is in the midst of a cyclical upturn and leading indicators remain at high levels (top chart). Rate...
The Market and the Economy
We discussed earlier last month how investors should not confuse the market and the economy. The market might be volatile and suffering losses at the moment, but the US economy is still ambling along. Manufacturing is likely in a recession, but the service sector is...
Gold Miners Very Cheap to Gold
From our Tactical Report of 19th Jan 2016: Gold miners continue to cheapen to the gold price. Using the Philadelphia Gold and Silver Index (which has the longest history), precious-metal miners are now as cheap as they have ever been to the gold price. While many...
The Remorseless Logic of Capital Outflows from China
China is in the midst of a debt-deflationary bust. It is an ongoing process that has gathered pace recently. Capital outflows are a symptom of this, and a weaker yuan is an integral part of the attempted cure. We expect more of this to come. We wrote back in the...
Weaker Sterling and the UK’s Profound Reliance on Foreign Capital
The UK's reliance on foreign capital is astounding. This is crucial to appreciate the broad-based decline in sterling we have seen over the past 6 months. As we have reminded clients frequently over the past 2 years and more, the UK now runs the largest twin deficit...
Crash Signal warned clients January 5th
Variant Perception keeps clients informed of the state of market health with specific buy and sell signals. Here is an excerpt from a weekly Tactical piece that went out to clients on January 5th. If you are an institutional client and would like to receive Variant...
Rare Buy Signal on Gold; Potential Short-covering Rally
Over the past three weeks we have had two rare buy signals on gold. Previous buy signals have returned 5-10% over the next month. The signal is a measure of selling or buying exhaustion. The returns are very good, and while not every single signal works, the odds are...
EM Money Growth Improving
Capital outflows from emerging markets continued into the second quarter of 2015. Once again the outflows mainly emanated from China and from CEE and Russia. The flipside is growth Treasuries held in custody for foreign accounts is stuck at zero percent. This is a...