Tag Archives: EU

Will the European Union/Euro Survive ?

The neat thing about listening and visiting with so many “Experts” last week is when several crossovers occur. By crossover, we mean different experts unknowingly saying the same thing.

European Union Survival?

The Euro, a combination of 28 different countries (founded in 1999) all linked to one currency with a common goal of trade and a common currency to ease flow of funds,  had a shot fired across the bow of its boat in 2016 with the British vote – Brexit – vote to leave, costing David Cameron his job.

David Cameron (the newly much higher respected) former Prime Minister/President of Britain, who lost his job over the locals vote to leave, said there is only one thing that would cause the Euro to split.

Oddly, a terrific crossover by Canadian Economist, Derek Burleton (more fantastic info to come soon) echoed the same EXACT kryptonite for the European Union.

Marine Le Pen elected as France leader would mean possible end to European Unionle_pen_marine-9586

We do not have a say, we are not familiar with Mrs. Le Pen, we are only announcing what two VERY distinguished experts said exactly the same un-knowingly at different moments at our event.

Mark the calendars as the election is April 23, 2017 !

Of course a split up of the European Union would have consequences for the global economy. We have interesting thoughts on these possible “consequences” should this occur….closer to the vote !

For the record, both Cameron and Burleton gave a very low probability of Mrs. Le Pen being elected.

Thanks for the forecast !

Have a GREAT “Forecast” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.



All Eyes on an International Vote

Capital moves quickly in today’s world. Trade with countries and companies around the world is efficient and prompt. With such movement a co-dependence can occur. If one country catches a cold it can effect others.

First British Vote since 1975 – To Stay or leave the European Union

David Cameron, current British Prime Minister promised a vote for the British people on the possibility of leaving the European Union. Here is a terrific BBC summary of the entire event and great background. Cameron desires staying in the EU.

Given the afore mentioned co-dependence, capital market fluctuations will likely occur as the polls drift back and forth on the vote. Currently the vote is seen as being VERY CLOSE!

We have no position either way, however as countries become larger and more independent, it does not surprise us on a desire for such vote.

Buckle up as the vote is Thursday June 23rd, and may make for interesting headlines along with violent moves by trigger happy traders who may be standing in for their elders who are in the Hamptons !

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.


Greece …. Summer Friday

So everyone (us sometimes too) has said Greece is SUCH a small country and there has been SOOO much time to prepare for a possible Greek exit (Grexit) from the Euro that it should not affect the capital markets.

WRONG!Greek Exit

Markets didn’t listen to the pundits. The tone of each day for the last few weeks has been set by the rumor mill of the Greek demise or resurrection. Even interest rates have been acting like jumping beans. Not only that, but once markets/rates start moving, due to summer doldrums, they just exaggerate for the day whatever direction its pointing.

Our recommendation, ignore the noise!

Summer Friday

Next week brings more exciting news for our office, as well as a mid year mark, and a holiday weekend…. Ahh … but that is next week. Today is a Friday … enjoy your weekend and if you are on the road, be safe out there !

Have a great one!

John A. Kvale CFA, CFP

8222 Douglas Ave # 590
Dallas, TX 75225

Meeting with Axel Merk, World Economic Update

As mentioned earlier, Axel Merk, founder of the Merk Funds, a huge complex of currency Mutual funds, was in Dallas last week, and took time to come by the office and catch up.

A Few Interesting Items from Our Conversation

While our visit was brief (thanks again for the time), we were able to catch up on the World Economic situation in great detail.

Let’s start with our back yard, as Axel had recently co-chaired an event with Alan Greenspan in which Greenspan had some rather candid comments.

Greenspan, Federal Reserve, Inflation

  • Federal reserve does what congress asks (this may seem obvious, but recall they are supposedly “independent” …maybe not)
  • Question spawned from the above point, “Does this jeopardize the FED’s independence?” “I never said the Federal Reserve was independent” was Greenspan’s response (hmmm)
  • According to Axel, Greenspan stated inflation will HAVE to rise in the future and Gold will be much higher (our thoughts, bring it on!)

Moving On to Japan; Going all in

  • Axel believes Haruhiko Kuroda went all in recently in announcing huge purchases of securities to lower interest rates, of which we took note here, will be a failure (we are not so sure)
  • Japan will continue to debase its currency as long as possible, according to Merk
  • Interestingly, Sinzo Abe, Japan’s version of the president, if unsuccessful will fade into the sunset leaving very little dust if Axel’s vision come true

European Union; better late than never

  •  Mario Draghi (president of European Union) and company are on more on the right track according to Axel
  • They were very late in this economic cycle of getting started
  • Draghi’s attempt to do an American/Japan version of QE (purchase of assets to lower interest rates) is very difficult because of so many fragmented countries
  • France and Spain, according to Merk are not so good

What does it all mean?

Most interesting for me was the firm conviction of eventual inflation. We have been watching for it for some time and think a sip would be nice.

Time will tell.

Oh…here is a pretty cool chart from Axel’s group. This should make 2015 more interesting as the blue line will no longer be rising.

Merk Fed and S and P

Have a Great Day!

John A. Kvale CFA, CFP
8222 Douglas Ave # 590
Dallas, TX 75225

Sir, You Will Need to Pay Us $100 to Deposit that $100k In Our Bank! … WHAT?

Oh…and we are not going to pay you ANY interest …..  Are you Kidding?


Draghi Announces First Ever Negative Interest Rate

In an unprecedented aggressive move to push loans into the market, European Union chief Mario Draghi announced banks holding excess reserves will PAY .10% on their reserves …. or earn a NEGATIVE (.10%.)

Here are a couple of other items included in his stimulus plan:

  •  Sterilization/Forgiveness of bad loans
  •  Lowering of their benchmark rate to .10%
  •  And Lowering of their Marginal rate to .40%

Here is what a negative interest rate looks like, note the terrible mistaken INCREASE in 2011:

EU Rates

With fancy acronyms behind our names (CFA, CFP) we are students of fundamental investments and free markets. Such government interventions, including our own governments’ forcing of lower rates, has made it challenging to separate fundamentals from froth and induced increases in capital markets. (Long winded way of saying, fundamentals are not as important AT THE MOMENT.)

We have taken note of the EU’s actions and may begin to lean slightly more
towards our friends across the pond.

What a terrific time to have an international interview and a pending detailed article coming in the next Newsletter!!

Have a Great Monday! … I am still on the Road

John A. Kvale CFA, CFP

8222 Douglas Ave # 590
Dallas, TX 75225

The Week that was…EU, Markets, JK Technology Blackout and Podcast Update

After a great week, tomorrow brings another fun summer weekend, we hope you had a fun week as well, and have been able to stay cool, somewhere. With internal and external items occurring this week, we thought it fun to take a look from a macro and somewhat humorous viewpoint.

Greece, and more importantly Spain, have recently taken center stage on the fear front of the EU situation. One week ago today, Spain’s third largest province, Valencia, (think Houston comparison in the US) called in a life line and requested government help as they ran out of funds.

As expected capital markets have cooled as earnings have been good, but given the EU situation and summer doldrums, wide, emotional swings, are expected and we were not let down. We still feel those with a negative posture have the best seat in the house currently.

JK Fin Closet

The client named  J.K. Financial, Inc – Technology Black Out was not to be. With a super high-speed confirmed connection sitting in our closet (see picture), but not connected, the official switchover is delayed until next week due to several absent members of our technology team. We do have two of our six planned HD TV’s working and wires hanging from the ceiling to prove it.  The new temporary numbered VOIP phone is working well, although it has not been stressed tested yet.  It’s all good, as without the adventure we would not have any advancements, not to mention humor in our lives.The promised podcast offering for those interested continues, unfortunately in incubation form, as we have several podcasts complete, but as of yet have not been able to achieve the quality presentation we desire. One technology conquest at a time please….

Have a Great, Safe, and Fun Weekend!


214-706-4300  www.jkfinancialinc.com

Zigg Drops by with a Mcteer Question and a Few Grounding Thoughts

Zigg, making a pilgrimage from his very crowded small island, on his way to the store for supplies as many of his new fair weather friends are cramping his style and eating his food, stopped by last night to see the family and say hello. He had heard about the McTeer event and added a nice question of his own, which we will certainly ask Mr. McTeer.

For those not familiar with Zigg, he is our mythical friend who is a contrarian. He Ziggs when others Zagg, usually taking an uncomfortable position at any given time. His thoughts are always helpful in keeping things in perspective.

In addition to the McTeer question he shared the following thoughts:

  • This is an Election Year, see (Research Paper) for history
  • Tax cliff may come in the form of possible new taxes
  • Little Brother Country Issues i.e. EU
  • A years worth of market returns already

Zigg was not being negative as he never takes a harsh stance, however he did warn of becoming too optimistic and letting our guards down.

Thanks Zigg, we have missed you and glad you dropped in. It’s funny to see him move from the only positive person, to being a bit more conservative in his views, once again almost alone in voice.

Have a Great Day and a Super Weekend!




Are Those Rose Colored Glasses You Are Wearing? Zigg Makes an Appearance

You guessed it, Zigg is back, and this time with a different message. For those new to Zigg, he has a residence on small island near the shore of a large group of fair weather friends, called Zagger’s, who often represent the majority voice at any given moment.

Last fall, when everyone was Zagging in the negative direction, Zigg spoke calmly and confidently to us on Friday’s, pointing out the positive events of the week, and letting us know that things are not always as negative as they seem.

This week Zigg has a different message for us. Possibly Zigg’s message is due to his Zagging friends taking residence on his island, telling him the sky is bright, and it will never cloud again. 

Zigging while others are Zagging this week means pointing out a few items:

  • Consensus moods (Zagger’s) often lead to clumsy investing, do not let your guard down, just as we bought when markets were down, we sell when they are up in order to keep your portfolio driving speed (allocations) appropriate.
  • It is very highly likely, capital markets will not match their January return of 4% throughout the year, leaving us with a 48% return for the year.
  • Shhhh……. While we hate to say it, the EU still has a few problems.
  • It is an election year!

While always positive, and never one to stick his head in the sand, Zigg did want to pull the umbrella from a few of his Zagger friend’s drinks (and maybe send a couple home.)  Zigg also understands, be careful what you ask for!

Have a Great Weekend!




5 Financial Positives this Week !

Zigging and zagging our way to positives this week, we found it much easier to spot good financial events to bring to you; so here is our abbreviated list of just 5 positives from this week:

On Wednesday Moody’s cut French Banks ratings with a market yawn: While it may not seem like a big deal, recall just a few weeks ago when the US received a rating downgrade, market participants panicked, and ran for the hills. We perceive this lack of response as a good thing, as participants are becoming more accustom to the current situation.

Geithner to Poland: Tim Geithner, the US Treasury Secretary, has been very busy this week, as he makes two of our positives. Early AM today, US time, he set foot in Poland to discuss options with EU Finance ministers. Given that the US has had a bit of recent experience with financial crisis, we perceive this as a positive, especially given the cheers associated with his trip coming from abroad.

Angela to the Rescue in support of the Euro: Angela Merkel, in Honey Badger like form, continues to hold firm against her critics and trumpet support for the Euro as a currency. We perceive this as a positive as future stability of the Euro may help the multination group, however, the greater positive is Angela continues to hold her ground.

Timothy’s comments at a New York Conference (Video): Geithner, making his second appearance in our positives this week, said speaking of the EU nations  “…this is their challenge and they have the economic and financial capacity to meet this challenge. the people who are concerned that this is beyond their grasp are mistaken. the size of the challenges they face financially andeconomically are completely within the capacity of the stronger european members to manage”  This is a strong of vote as we have seen, especially coming from Tim.

China Closer to Soft Landing: China’s continued self-imposed head winds continue to slow, but not stop, their fast growing immense economy. This is a positive to the global economic picture. We voiced concerns at the beginning of the year, thankfully in positive fashion our trading neighbor is positively managing the slow down well.

We hope you have a great day and a wonderful weekend, and welcome Donald back from his trip to Jamaica and avoidance of harsh weather.


One Size Fits All, A Greece Example

Much has been made of the Greek situation as of late, especially given the emotional protests and debtor lifestyle the country is currently enthralled. While Greece as a country and their policies are not without flaws, we thought a simple and unique comparison may be of interest.

Imagine for a moment, there was only one shirt for us all to wear.  When the European Union was established, many of the participating countries were similar to kids. Many were not mature, had limited individual problems, and excitedly entered the EU, as a one size fits all shirt was just the ticket.

A one size fits all shirt, promises ease of decision-making, a loose commonalty, and similar identity, just as it might if we were children, all wearing the same shirt.

One Size Fits All

As countries mature, they begin to have their own identity, make their own decisions (good and bad) and begin to gravitate in unique directions. The one size fits all shirt no longer has many of its advantages. Our mythical shirt, which made us all feel stronger as kids and gave us a nice feeling commonality, is actually becoming restrictive. Just like in life, countries grow at different paces and to totally different sizes.

The cost of our mythical shirt suddenly becomes too expensive for one in our group

When it becomes time to replace our mythical shirt, again for a one size fits all, one person in our group cannot afford the replacement cost. In our example this person lacks some of the levers to purchase a new shirt; devalue its currency, default, make individual austerity measures to slowly begin saving enough for the shirt. (Maybe they don’t even want to wear the shirt anymore.)

As time continues to pass and our group continues to change and move in unique directions the many advantages of a one size fits all shirt MAY lead to a rejection of the group as a whole, leaving one or many to opt for their own shirt, thereby controlling cost, growth and size on its own.

This is just our mythical example, but it does have merit and may bear a resemblance to what Greece is dealing with currently.

Have a Great Day!