Angeles Advisors | Blog

  • Blog posts are written by Angeles' CIO Michael Rosen

    Michael has more than 30 years experience as an institutional portfolio manager, investment strategist, and investment consultant.




Two weeks ago (13 August, No Panic (Yet)) I noted that the renminbi devaluation was officially described as a modest alignment with market forces, which may have been true, but that it was strongly indicative of protracted weakness in China’s economy. I saw no need to panic two weeks ago, but last week would have been more timely; the “(Yet)” part of the title came upon us with a fury. Yesterday, US stocks lost more than 3%, but the intraday move was cumulatively more than 25%, up and down 5,000 Dow points. But US (or European) markets are not the drivers Read More

Land of Borat


I probably should not confess to enjoying Borat (full title: Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan), 86 minutes of low-brow, sophomoric gags lest I shatter my highly refined, cultured and sophisticated image. So I’ll never admit (in writing) to laughing almost non-stop. It’s the story of a reporter from Kazakhstan traveling across America to discover what makes the country great. I don’t know how the 17 million people of Kazakhstan feel about being portrayed by an imbecile, but Sacha Baron Cohen does a pretty good job of pointing out the fatuousness of Americans. All this Read More

No Panic (Yet)


Earlier this week, China devalued its currency 1.9% against the US dollar. On one level, this is not a big deal. China’s currency has been appreciating considerably for many years (see Chart 1 for the last five years; note the scale is inverted). Even in the past year, the yuan is down just 3.5%, whereas our largest trading partners—the Canadian dollar, Mexican peso, yen and euro—are each off 15-20%. So, who cares? Perhaps we need a distraction from the Donald Trump – Megyn Kelly spat, and mid-August is typically a sparse news period, but some pundits are trying to stir concerns Read More

Criminals in Diapers


Japan grew from the (literal) ashes of the Second World War to become the second largest economy in the world by creating products we all wanted. Some were revolutionary, like the Sony Walkman, some just a better version of an existing product, like the Toyota automobile. And some were wildly popular for inexplicable reasons, such as Hello Kitty or Teenage Mutant Ninja Turtles. The Japanese economy was an amazing success story. But two decades of no growth, deflation and a shrinking population combine with public comments from politicians and CEOs that are often platitudinous, mysterious and contrary to reality, leaving Read More

Dry Hole


Southern California just had the wettest July on record, the Angels were rained out of a home game for the first time in 20 years, and we’re all getting excited that a strong El Niño is developing for the winter. But let’s all take a deep breath. The record July rain at LAX was about one-third of an inch. That’s about a 15-minute downpour in the rest of the country. It was a little better in San Diego, just over an inch-and-a-half. So, while welcomed, it wasn’t much, especially when we consider the (dry) hole we’re in. The first chart Read More

Hot Bidding


The housing recovery, from its worst downturn since at least the 1930s, has been steady, but much less robust than most had expected. There are many explanations offered, from mean banks who have tightened lending standards, to over-indebted households who have no capacity to borrow, to a societal shift away from ownership to renting. There’s probably some truth in all of these. But housing is picking up steam, and one of the phenomenon of previous bubbles, bidding wars, may be coming back. This first graph (courtesy Redfin) shows the percentage of homes nationally selling above their asking prices: 23% last Read More



Commodity prices are in free fall. The Bloomberg Commodity Price Index (5-year chart below) is off about 30% in the last year. Gold is dropping toward $1,000/oz., and oil (WTI) is back below $50/barrel. A hundred years, Nikolai Kondratiev proposed his wave theory of capital markets, and 50 years ago Benoit Mandelbrot observed the fractal nature of these waves, their similarity over multiple time frames. When two waves of different frequencies but similar magnitudes collide, the result is a much-amplified force. That, I think, is what we are seeing in commodity prices. Commodity prices have historically moved in long waves, Read More

Wild, Wild East


The central planners in Beijing have gotten so much right for the past three decades, that they might be forgiven for believing in their own infallibility. But it’s one thing to shuffle resources around an economy—a road here, an airport there—and quite another thing to dictate supply and demand in a large market. John Major learned the folly of fighting markets in 1992, and there have countless similar experiences both before and since. Apparently confusing a healthy stock market with a healthy economy, the political powers in China decreed that stock prices should rise, directing banks and other lenders to Read More



I’m not sure why the pundits were predicting the Greeks would volunteer to walk meekly to their certain ruin, but the vote yesterday apparently surprised these experts. European equities are down 1 ½%, bonds of Italy, Spain, Portugal are selling off, the euro is a little weaker. Risk off, but the markets are not pricing in any calamity this morning. Of course, just because the Greeks voted against certain repression, does not mean they will avoid it. More like choosing the devil they don’t know for the devil they do. Unlike the dramas of their ancestors, there are no gods Read More

Puerto Pobre


An honest politician may be oxymoronic (or is just moronic?), or maybe it’s the black swan that surprises us when seen. Either way, Alejandro Garcia Padilla, governor of the US Commonwealth of Puerto Rico, stated in clear terms a 5-year old could understand (which thus qualifies it as a black swan of political clarity) that Puerto Rico cannot pay its debts; period. This island of 3.5 million very nice people, with a GDP less than Sacramento, has amassed debts of $72 billion. As is so often (always?) the case, excessive debt is not the disease, it is a symptom of Read More