ALL THINGS BIG AND SMALL 2.0

The chart below shows the sectors of the US financial markets that our model has identified as more likely to break down:  1. S&P500: the stock market 2. KRE: the index of US small/regional banks 3. HY OAS: the option adjusted spread for high yield/junk corporate bonds. 4. USD/JPY currency cross The probability that none of the four will break down within 3 months is 92.9 % as of 31 Oct 2026 . However, the probabilty that none of the four will break down within 12 months  drops to 40%. Now we have the mid-term election on 3 Nov, Scott Bessent's Treasury re-funding estimates on 4 Nov, possible good/bad news on US-Iran war after the mid-term elections.  All this can drastically reduce the probability of none of the four breaking down within 3 months. Come back on 7 November to see.  --------------------------------------------------------------------- Real yields as meaured by TIPS is still positive but falling rapidly. See chart. What will be the impact on gold an...

China's history show periods of 200-400 years when China was united under a ruling dynasty (although some dynasties such a Qin and Sui lasted less than 50 years) But interspersed between these  dynastic periods were the periods when war and famine ruled the land with China breaking up into small states and kingdoms controlled by warlords and even non-Han Chinese rulers. Examples: Spring and Autumn Period, Warring States Period,  Three Kingdoms Period, 5 Dynasties and 10 Kingdoms Period and so on.  For those interested in China's history these intervening periods can be very confusing. Particularly when all these small states and kingdoms try to inherit legitimacy by adopting the names of past glorious dynasties. So you get Western Xia, Later Tang, Later Liang, Eastern Jin and many others.  The two full-color .png in the form of a table   shows the dynasties and  intervening periods with information on the years they existed, the Founder of the dynastie...

Silver is extremely volatile. But there is an arguable case for having a small amount of Silver in your Gold portfolio to enhance its financial performance. (all numbers in USD) 1. The correlation of Silver with Gold is always positive, never negative. In other words when Gold goes up, Silver follows. Historically, R ranges from 0.5 to 0.8 2. Silver has a Beta of 1.2 to 1.6 against Gold. i.e. theoretically when Gold goes up by 1.00 Silver goes up by 1.20 to 1.60. 3. Silver’s reward/risk ratio (RRR). Its no use to apply statistical RRR like Sharpe or Sortino as Silver will be penalized for its volatility. But here,  here we are actually exploiting Silver’s volatility for our objective. 4. A common-sense way to estimate RRR for Silver is to take 50.00 as the downside (Silver has been above 50.00 since it broke through this level on 9 October 2025- that’s 55 weeks.) For upside we take the January 2026 all-time high of 120.00. So, the RRR is 120/50=240% 5. The affordability f...

  Singapore has launched a new S$150 million AI-powered platform to accelerate advanced materials discovery. The initiative, named MARVEL-AI (Materials Accelerator for Research, Venture and Enterprise Launchpad), was officially announced by Deputy Prime Minister Gan Kim Yong at the Singapore Week of Innovation and Technology.  MARVEL-AI aims to compress traditional material development lifecycles from several years down to just a few months. I made the attached MP4 for you to know why discovering new materials is crucial for Singapore’s future-oriented economy.  Click on it to see how a fictional new metal alloy Singallium was discovered and see its industrial usage.    But first some key facts about this new AI-driven new materials discovery robolab.  Key  Operations & Focus Areas Led by the Agency for Science, Technology and Research (A*STAR), the platform combines advanced generative artificial intelligence with robotics-driven "self-driving lab...

 Until this whole mess is sorted out: Fed FOMC 28 Oct, US mid-term elections 3 Nov, US-Iran Hormuz, Houthis-Saudi Arabia; the level of uncertainty is too high for any meaningful analysis amid the daily volatility. But one positive signal for gold/silver is that even though inflation is raging, there are signs of investors expecting it to be quickly followed by a recession- which is good for gold/and silver as the Fed will do all it can to avoid or mitigate a recession by its usual measures of printing money and maybe bailing out the too-big-to-fail entities like the big banks- and this category of entities now include the debt-ridden the AI, semiconductor and data centre companies.    Gold/Silver prices are not correlated with nominal interest rates but real interest rates which is nominal rates minus inflation, a.k.a. real yields. In the chart below, the left 2 panels show the 10-year real yields and the right 2 panels show the 5-year real yield. Real yields are neg...

More than 60% of trading in the US stock market is driven by algorithms. This increases the probability of sudden crashes.  The Danish theoretical physicist Per Bak’s book “How Nature Works: The Science of Self-Organised Criticality”. Self-organised criticality describes systems that slowly drift into a fragile state, where a trigger of any size can set off a cascade of any size. In this sense stock market crashes are no different from forest fires, avalanches, traffic jams, crowd stampedes, algal blooms in water, or guitar amplifier feedback. So, I have made  a simulation of how a stock market behaves before it crashes. The data is synthetically generated. Click on the MP4, sit back and enjoy an entertaining 2-minute simulation complete with sound. The blue, green, orange and red dots represent swarms of investors and their changing perception as the market evolves.  What the video shows: 0:06–0:20 – Calm market. A small “nudge” sell order lands and is absorbed. The gain...