Skip to main content

Back to regularly scheduled programming: market market market

Thursday morning and the big question is what's going on.  The past few days/weeks the word of the day was rotation -- away from bond towards equities.  Looking at the bond market 10y & 20y and its yields have returned to their mid 2013 levels, you begin to wonder what rotation?

I still see Europe as a disaster in waiting (maybe not really waiting), the markets are touting normalization because sovereign bond rates are down in the 7% range (from 15%) but then that's what happens when the ECB buys everything and anything.

News out of China is that they are having some success with deflating the investment balloon.  There have been only a few, and largely insignificant, bankruptcies so far (most of the insane to start with high yield variety).  Michael Pettis (a very smart guy) who has been an impartial China watcher for several years seems to think that they are on the right track.  So that could be good news, although its still a mighty big ship to turn around.

News out of the US continues to be "strange"  new mortgage applications are at an all time low -- we've got to go back to the early 90s to see these types of number again because refinance are included the stats are hard to understand (the stock of refinancing is a very large percentage of total mortgage applications and with stable interest rates there's not much refinancing activity).  New jobs are trending in the wrong direction, as they say the trend is your friend and the trend is not positive.

Corporation continue to increase profits -- clearly on the back of the labor force since wages are stagnant.  The events around Volkswagen and its union vote in Tennessee are just unbelievable -- the State government appears to have conspired to "bribes" VW to  not certify the UWA, while proclaiming their non-involvement in the process.

An amusingly  story out of congress where the Republicans insist that inflation was "DC math" invented by the government to give bigger benefits to the poor (they love that fight), in turn the Democrats produced an amusing "real math" situation showing BigMac inflation of 5.5% per annum between 2004 and 2014.  Still mighty amusing.

Finally, you cannot satisfy the FOX talking heads:  Noah the movie opened to great financial success (I will not see this movie).  Apparently, the crazies at FOX are complaining both that there are not enough religious movies or that they are misinterpreting the Bible (e.g. Noah); the two main crimes (a) that Noah got shit faced (actually he did Genesis 9:21), and (b) that the movie never mentioned God -- really 'cause the creator is not enough?  I mean, and this is not the first time -- do these people read the Bible.




Comments

Post a Comment

Popular posts from this blog

Ok so I lied...a little (revised)

When we began looking at farming in 2013/14 as something we both wanted to do as a "second career" we invested time and money to understand what sector of farming was profitable.  A few things emerged, First, high-quality, source-proven, organic farm products consistently have much higher profit margins.  Secondly, transformation accounted for nearly 80% of total profits, and production and distribution accounted for 20% of profits: Farmers and retailers have low profit margins and the middle bits make all the money. A profitable farm operation needs to be involved in the transformation of its produce.  The low-hanging fruits: cheese and butter.  Milk, generates a profit margin of 5% to 8%, depending on milk quality.  Transformed into cheese and butter, and the profit margin rises to 40% (Taking into account all costs).  Second:  20% of a steer carcass is ground beef quality.  The price is low, because (a) a high percentage of the carcass, and (b) ground beef requires process
Post a Comment
Read more

21st century milk parlour

When we first looked at building our farm in 2018, we made a few money-saving decisions, the most important is that we purchased our milk herd from a retiring farmer and we also purchased his milking parlour equipment.  It was the right decision at the time.  The equipment dates from around 2004/05 and was perfectly serviceable, our installers replaced some tubing but otherwise, the milking parlour was in good shape.  It is a mature technology. Now, we are building a brand new milk parlour because our milking cows are moving from the old farm to the new farm.  So we are looking at brand new equipment this time because, after 20 years of daily service, the old cattle parlour's systems need to be replaced.  Fear not it will not be destroyed instead good chunks will end up on Facebook's marketplace and be sold to other farmers for spare parts or expansion of their current systems. All our cattle are chipped, nothing unusual there, we have sensors throughout the farm, and our milki
Post a Comment
Read more

So we sold surplus electricity one time last summer...(Update)

I guess that we will be buying an additional tank for our methane after all.   Over the past few months, we've had several electricity utilities/distributors which operate in our region come to the farm to "inspect our power plant facilities, to ensure they conform to their requirements".  This is entirely my fault.  Last summer we were accumulating too much methane for our tankage capacity, and so instead of selling the excess gas, that would have cost us some money, we (and I mean me) decided to produce excess electricity and sell it to the grid.  Because of all the rules and regulations, we had to specify our overall capacity and timing for the sale of electricity (our capacity is almost 200 Kw) which is a lot but more importantly, it's available 24/7, because it's gas powered.  It should be noted that the two generators are large because we burn methane and smaller generators are difficult to adapt to burn unconventional gas, plus they are advanced and can &qu
Post a Comment
Read more