Tag: black-swan event

Was The Collapse of SVB a Black Swan?

Posted on by Aibek Burabayev

According to some doomsayers, the stock market is on the brink of a crash, and the collapse of Silicon Valley Bank (SVB) is being considered as a potential "Black Swan" event.

They believe it could trigger a domino effect similar to the Lehman Brothers collapse in 2008. There are already indications of this, as the failure of SVB has had a ripple effect in Europe, with the second largest Swiss bank, Credit Suisse, also being hit.

YTD SPF IXG SIVB JPM BAC CS

Source: TradingView

In the comparative chart above there is a year-to-date dynamics of S&P 500 Financials index (SPF, black), the iShares Global Financials ETF (IXG, green), SVB Financial Group (SIVB, red), Credit Suisse (CS, orange), JPMorgan Chase (JPM, blue) and Bank of America (BAC, purple).

On the chart, all of the lines indicate negative performance, with each one below the zero mark. Indeed, SVB and CS are the ultimate losers, while BAC is also suffering a significant loss at -17.01%. Meanwhile, IXG, JPM, and SPF fared slightly better, with losses of -6.43%, -6.85%, and -10.35%, respectively.

This indicates that banking stocks around the world are losing ground following the trigger from SVB, as seen with the decline in IXG and the top two banks in the US. Continue reading "Was The Collapse of SVB a Black Swan?" →

It's Official, They Exit! Risk Aversion Chronicles: Gold Leads The Safety Demand!

Posted on by Aibek Burabayev

Aibek Burabayev - INO.com Contributor - Metals


Today is a historic day in World financial history, which will be recorded in our memory forever! And it was a long and sleepless night all over the world as financial markets were frozen in agonizing suspense.

We should admit that Britons are firm and consecutive in pursuing their goal of independence. Almost a quarter century ago, they decided to withdraw their currency from the European Exchange Rate Mechanism (ERM) and they didn’t turn off their road yesterday on the final referendum.

Bookies and analysts got it all wrong as they forecasted the win of the "STAY” option, but more and more we have witnessed that all efforts to calculate human emotions and perceptions fail. The economic consequences for Brexit are harmful to the UK in a short term, but they still voted to leave. People are irrational in their behavior and the realization of this fact would bring the dramatic changes in the economic science in the future. Continue reading "It's Official, They Exit! Risk Aversion Chronicles: Gold Leads The Safety Demand!" →

Buy The Sterling On Brexit Fears

Posted on by Lior Alkalay

Lior Alkalay - INO.com Contributor - Forex


Unless you've been incommunicado this past week, you've surely noticed that the FX arena has been dominated by one trade. That, of course, is short Sterling, because Britain appears on the verge of leaving the European Union (EU).

The black swan event that brought about this situation was the surprise announcement by Boris Johnson, the incumbent Mayor of London. Johnson, a rising star of the Tories, is campaigning for Britain to leave the EU. That, of course, was a bit of a game changer. Investors got spooked by the thought of the financial Armageddon that could be visited upon Britain if a Brexit (British Exit) does occur.

Luckily, such panic creates an ideal situation for the rational investor. It's time to exploit and buy the Sterling low and sell it high later on when Brexit fears fade. Continue reading "Buy The Sterling On Brexit Fears" →

A Black Swan Event Rocks Gold And The Swiss Franc Today

Posted on by The INO.com Team

A black swan event is a metaphor that describes an event that comes as a surprise and has major consequences.

Today, such an event occurred causing the Swiss franc to soar as much as 30% and gold to jump to 4-month highs in chaotic trading after The Swiss National Bank (SNB) abandoned the cap on the currency's value against the euro.

The Swiss National Bank (SNB) said the cap, introduced in September 2011, was no longer justified. No one predicted, hinted or even contemplated that The Swiss National Bank would do this.

This move could well begin the demise of the euro that was cobbled together some 15 years ago. Personally, I am surprised to this day that this currency has survived as long as it has. The disparity between the work ethic of a country like Germany versus Greece is a joke - yet that is what the euro represents.

A Flight To Quality

As the Russian ruble continues to lose buying power, money is flowing into Switzerland from that country. I remember when I lived in Switzerland, flights used to arrive with passengers whose suitcases were stuffed full of illegal money. Make no mistake about it, this move by the Swiss National Bank is a game changer. Continue reading "A Black Swan Event Rocks Gold And The Swiss Franc Today" →

A Tight Tax Leash Constrains Americans

Posted on by The INO.com Team

By Nick Giambruno, Editor, International Man

Many readers are already well aware that the US government is essentially unique—and not in a good way—in how it treats its citizens living and working in foreign countries. No other country in the developed world imposes and effectively enforces as many burdens on its citizens abroad (and those who would do business with them) as does the US government.

Whether it is filing and paying taxes to both a foreign government and the US government, the reporting of foreign financial assets (FBAR and Form 8938), or saddling foreign financial institutions with extra compliance costs for dealing with US citizens (FATCA), among others, the root cause of these burdens is a system of citizenship-based taxation (CBT). Continue reading "A Tight Tax Leash Constrains Americans" →