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Showing posts from November, 2015

Terrorism, the media and the flight for the right (GOP/Conservative etc) A very short post

I hardly ever watch network TV, I don't think I've watched a political gabfest in more than 3, maybe even 5 years.  Its just that pundits the world over have an opinion, it will not change, and its why the are on TV, they're a sure thing for the bookers -- the "hooker" of the TV world -- you get what you pay for!
Anyway, at a loss, in an Ottawa hotel I saw this debate on the confluence of recent Canadian elections, the Liberals' (left of centre) victory and the impact of the Paris terrorist attacks.  Present were a conservative pundit, a token "good looking" muslim women and  a radio host -- my guess is that no smart liberal wanted to be on that show.  BTW I do realize that's probably the beginning of a joke:  So a conservative, a Muslim and a radio guy walk into a bar...  
Back to my story: the conservative pundit (hereafter know by her initial TK) who I vaguely know is asked a leading question:  If the Canadian elections were held the day aft…

Goldman says oil going to $20/bbl -- so it probably will not do that!

This morning GS in a E&P report said that the current glut in oil could easily drive prices to $20.00/bbl. Nine times out of ten whatever GS says doesn't happen!  Take gold, it's rather amazing, although GS has a 2012 US$ 850 target (when it was trading at $1,300), today it's trading at US$1077.00/oz -- so not a very good prediction (it did make the cover of the WSJ).
So why is GS so often wrong?  
The short answer is that GS, like all brokers, is looking at generating "buzz" for their ideas.  The real issues are the following: There is a glut of oil with virtually all storage options fullLots of investors played the yield curve assuming that oil prices would rise -- it didn'tNew production in the US "non-conventional" is dropping fast -- drilling rig count is down 60%Other stuff that's worrying:  overall demand for trade is off, freight rates (ships) is down 70% in a month (that cannot be good) So the signs are not good for oil, but they ar…

Paris!

Friday night the world has changed, again. The multiple attacks in Paris are a stark reminders of what happened in 2001, where several aircraft were directed at various American targets (World Trade Centre, Pentagone and White House).  These attacks are somewhat similar, except they targette the France's youth.  The region of Paris where the attacks occurred are known as the primary "fun spot" of Paris.  
It was horrible!
In Liars Poker, Michael Lewis talked about how his boss would use real (horrible) world events to theorize on how they would impact the world. economy in general and markets in particular. Therefore one question I got asked this weekend was what will be the economic impact of the attacks on the world economy; we have a strange confluence -- whereas last week everyone was "anti-Putin" this week, no so much.  My first guess is that conflict with Russia is now off the table;  The enemy of my enemy is my friends (or something akin to that). We se…

Gold, Automation, Oil and deflation (Revised)

First off, Gold's been off its feed for some months now.  Its not clear what's going on, but in USD gold is off nearly $200 since spring -- where it had been trading around $1,200/$1,250 for nearly 3 years.  Normally, I would blame the strong dollar, but its been more or less unchanged for two years, so that's not it.  My instinct tells me that something else is a foot!  My best guess is inflation expectation are going down the tube.  Not only are primary ressources suffering (e.g. oil prices, steel etc) but the central bank's pumping action seem to achieve little.
This morning a very prominent hedge fund declared that "the floor on oil prices had been reached" within 20 minutes of this pronouncement oil price dropped nearly 8%... goes to show "nobody knows nothing".  But a massive failed auction of used heavy equipment in Australia, CEO of Maersk declaring that trade was far worse than the market assumed all point to further economic slow down. Wh…

Self driving cars and the market

Earlier this summer I was having a conversation with my father, the topic was self driving cars.  I though that within a few years self driving cars would begin as a solution to gridlock and the complete absence of parking spaces in large cities.  My estimate that "in the next 10 years" experiments would start.  My dad was far more pessimistic, he thought that the Americans would never be able to get around the liability issues (then again 30,000 people die from guns and that doesn't appear to be a problem, but I digress).  
Imagine our surprise when Tesla unveiled its latest software update which allows limited automatic driving on motorway.  Furthermore two guys drove across the country with a Tesla; 99% of motorway driving was automatic driving.  It gets better, last week I learned that machine learning was involved!   That every time an American (because the software is so far only available in the US) takes his tesla on the road and activate the automatic driving, …