USA: Wall Street: Why US investors are now betting on water

Municipal companies and utilities could also stand to profit from water futures, the CME argues. In California where water is scarce, water prices often soar overnight because of wildfires or droughts.

Costs for the next six months can be estimated only roughly, as Nasdaq Senior Manager Patrick Wolf told Bloomberg. He's in charge of the futures in California, the United States' largest water market.

Read more at: Why US investors are now betting on water | Business| Economy and finance news from a German perspective | DW | 21.01.2021

The Netherlands: Female Executives: Dutch group of investors only to invest in companies with female executives - by Mina Solanki

 That’s right, an important group of Dutch investors has decided to only invest in companies where at least 35 percent of executives are female. The goal for achieving this is set at three years.

There are 25 investors involved in this initiative, and together, they manage around 1,1 billion euros. That is a quarter of the total assets managed by Dutch venture investors. The plan to introduce a quota came about after research into the funding of female-run start-ups, by the investors Eva Mol and Janneke Niessen, revealed that investors almost exclusively funded start-ups run by men. In fact, only 1,6 percent of the businesses invested in was under the direction of a woman.

Read more: Dutch group of investors only to invest in companies with female executives

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US Stock Market: Investors flee junk bonds in troubling signal for stock market - Jeff Cox

udging from the flow of money out of high-yield bonds, investors are getting increasingly leery of a market that continues to hover around record levels, despite a handful of rough trading sessions in November and a rocky start Friday.

Funds that track junk bonds saw $6.8 billion of outflows over the past week through Wednesday, according to Bank of America Merrill Lynch. That's the third-highest on record.

The sector is considered a key proxy for the stock market, with performance that has followed almost a perfect correlation with the S&P 500 in terms of direction. Bonds are normally thought as a safe-haven trade that benefits when stocks weaken, but high-yield represents a risk similar to equities.

The correlation in 2017 has varied: September was the high for the year at 76 percent, while June was just 42.4 percent, according to DataTrek Research. (100 percent would mean the assets move exactly in tandem.)

Read more: Investors flee junk bonds in troubling signal for stock market

Central Banks: Mohamed El-Erian: ‘Central banks are like doctors’- by Rudyard Griffiths

Mohamed El-Erian

In this report, Rudyard Griffiths, chair of the Munk Debates, Canada’s leading public-affairs forum, who discusses issues and trends just over the horizon with renowned analysts and policy-makers, interviews Mohamed El-Erian, chair of U.S. President Barack Obama’s Global Development Council and also chief economic adviser to financial-services multinational Allianz and author of the recently published The Only Game in Town: Central Banks, Instability and Avoiding the Next Collapse

Q Are central banks becoming a threat to the global economy?

Central banks are like doctors. They will not walk away from their patient, the patient here being weak economic growth. Like a doctor, they will try to prescribe whatever medication they have, even if it simply buys time. So central banks have been prescribing medication that buys time. It doesn’t deal with the underlying weaknesses of the global economy. It simply buys time for the politicians to get their act together. Now, as any patient will tell you, at a certain point when you rely excessively just on pain killers, not only are you not solving the underlying problem but you risk having side-effects. And that is what we’re seeing. We’re seeing the side-effects of excessive reliance on just pain medication. Now that’s not the fault of the central banks, because the providers of the better medicine, our political leaders, haven’t stepped up to the plate. In sum, central banks will continue to treat the patients, even though they know that their medication will not restore perfect health.

Q: What is your take on negative interest rates?

I am worried. You need only look to Japan to see what that danger looks like. The Bank of Japan surprised everybody by following the European Central Bank into negative policy rates. It did that with the hope that, by taking interest rates negative, they would weaken their currency and therefore help their exports, and they would boost their equity market. The exact opposite happened. The currency strengthened and the equity market sold off. Within two days, the officials were dragged into parliament and basically read the riot act. When you take rates negative, you risk not only getting the wrong response out of the economy, because people simply disengage at this point. The sale of home safes has soared because people are saying, “Why should I keep my money in a bank that’s going to take money away from me? I might as well keep it at home in the safe.” People disengage from the financial system. Political outcries become more frequent and the political process starts looking into what you’re doing. I think all this is a warning to central banks to be careful. But the key problem remains, which is they are unable to hand off the task of sustaining economic recovery to our political leaders. Back to my analogy of the patient and doctor, they won’t step away from patients when there is no one else to care for them if the treatment they are providing risks the patient’s health.

@: Will negative interest rates come to North America?

We have built a very sophisticated capitalist system that assumes that nominal interest rates are positive. So the minute you take the negative, things start breaking. For example, banks start turning away deposits. Second, providers of long-term financial protection – pension funds, insurance companies – find it very hard to sell new products. They can still service the old products, but it’s very hard to sell new products if the safe interest rate is negative. So you start creating institutional breakage, and there are no other institutions to step in. It’s not as if you can replace them. You cannot replace something with nothing. So the system starts operating less efficiently. I think that the Federal Reserve realizes this and they would like to avoid. Now they’re lucky because the U.S. economy is in a better place than Europe. But having said that, even if the U.S. economy were in the same place as Europe, I don’t think that they would go to negative.

Q. How should investors protect themselves?

The first thing to realize is, we are living on borrowed returns. The second thing is we’re coming out of a period of artificially low volatility that’s going to give way to unusually high volatility. And the third thing is, because central banks have intervened so aggressively, they have altered the correlation among asset classes.

These are three consequential hypotheses. If you agree with them, then much of the conventional wisdom about investing starts being challenged. The first is that diversification provides for risk mitigation. This is no longer true. If the traditional correlations between asset classes break down, then diversification, while still necessary, is not sufficient. Second is that you should just be a long-term investor. Don’t worry about the short term. But if you’re going to have massive volatility in the short term that can break out one way or the other, you need to pay attention to the short term.

The third assumption is that cash doesn’t belong in a strategic asset allocation. If you read basic investment books, they’ll say have minimal amounts of cash. Cash is a dead asset. That’s no longer the case. In fact, cash is the only way to get protection in the world we’re living in. I tell people, “You have to think about cash being 25 to 30 per cent of your asset allocation.”

At the end of the day, the individual investor needs three characteristics in a portfolio to be able to navigate the challenging period ahead: resilience, the ability to navigate a lot of volatility; optionality, the ability to change her or his mind when you get more information, and agility; the ability to move quickly when others are still like deer stuck in the headlights.

EU-Digest      -    Globe & Mail Canada

Real Estate: Global Market Perspective

US Real Estate Market looking up 
For additional info.on this beautiful  Maine (5 bedroom 
B&B property )write to: real_estate@eclipso.eu 

LL's Global Market Perspective has chronicled the journey of the world’s dominant real estate markets since the depths of the Great Recession in 2008, a journey that has been led throughout by strengthening investment markets as a huge weight of money targets real estate assets.

But, as we move into 2016, the dynamics have started to shift, with the occupational markets now registering greater momentum.

Market fundamentals are improving across all major global regions and property sectors, and recent leasing activity has surprised on the upside. Geopolitical and economic headwinds will weigh on business activity over the coming months, but for now, corporate occupiers remain in growth mode which, combined with tightening supply, will support rental value growth during 2016 in most major markets.​​

Improved consumer confidence and healthy retail sales are fuelling optimism in the U.S., Europe and selectively in Asia Pacific. Several

U.S. markets, primarily gateway cities, are now witnessing conditions typical of a peaking market as rents see assertive growth and vacancy continues to compress. Meanwhile, UK regional markets and Berlin
experienced the strongest rental growth over the year’s final quarter in Europe, while increases were also recorded in the recovery markets of Italy and Spain.

In Asia Pacific the demand picture remains varied, with the acceleration in retail spending in Australia contributing to  leasing demand, although rental growth has been limited in most regional markets over the quarter.

For the complete report click here:  Global Market Perspective | JLL

Wall Street: forget about market corrections - the party is over - "this is a meltdown for Wall Street folks"

The Dow implosion continues -364.81 / -2.21%today Wednesday January. 

Year to end  a -7.31% drop. Wall Street might have been able to fool some people, but they can't fool investors all the time.

The party is over folks, at least for the time being, and nothing seems to be on the horizon to be a reason for optimism.

EU-Digest

The Netherlands: Crowdfunding – Dutch investors – where to go?! - by Coen Barneveld Binkhuysen

Crowdfunding is growing exponentially in the Netherlands. Although the Dutch market has not yet reached the astronomical levels of the United States and the United Kingdom, many people have heard about the phenomenon and are intrigued by this potential alternative investment opportunity.

While the Dutch market speaks a lot about crowdfunding, it is less familiar with the term p2p-lending (it is commonly available though).

As this article covers investments in loans, convertible subordinated loans and equity, I will use the general term crowdfunding instead of p2p-lending.

In the first 6 months of 2015, almost 50 million Euro was raised via crowdfunding, which is double the amount raised in 2014.

There are over 80 crowdfunding platforms active in the Netherlands, which makes it difficult for potential investors to gain an overview of the viable available investment opportunities.

In general, crowdfunding platforms in the Netherlands offer the option to invest in loans, subordinated convertible loans and equity (besides donations and the purchase of products). Each of these different investment options has benefits and drawbacks in terms of cash flow, risk and the potential upside can vary significantly:

Loans provide a direct cash flow to the investor as loans are usually repaid in monthly instalments. Loans only have a limited potential upside, maximized at the offered interest rate. Due to the monthly repayments, the risk decreases every month. Most crowdfunding platforms determine the interest rate based on the envisaged risk. As far as I am aware, there are no platforms active in the Netherlands that provide the option to “bid” on loans in auctions.

Read more: Crowdfunding – Dutch investors – where to go?! | P2P-Banking.com