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)...
Post a Comment
Read more

Spray painting Taylor Swift G650 aircraft (updated)

 First, a bit of paint will not harm anyone.  These climate activities are going to learn two things in the next few days:  (1) Trespassing at an airport is a felony almost anywhere in the world.  That means criminal prosecution.   (2) removing paint from an aircraft is expensive.   So these climate activists are about to find out the reach of the British criminal system and it will not be pleasant, the UK has very strict laws about that, I would be surprised if cleaning the aircraft of all the paint will cost less than $100,000.     I am sure that when they planned (premeditation) this little show they had a very valid logic to doing this.  Tonight, they are probably realizing the depth of their troubles.   I understand that in the UK it's a minimum one-year jail sentence.    Also, good luck travelling with a criminal trespass charge against you.  I am relatively certain that the airline industry will ...
Post a Comment
Read more

Janet Yellen from China supporter to Hawk...

There is rarely serious news in the world these days, it seems that most newspapers are filled with headlines and little else, and then Ms Yellen went to China.  Secretary Yellen has long been known in the Biden administration as the voice of moderation when dealing with China, yet as her trip which concluded yesterday a hawk was born:  She warned the Chinese against dumping goods in the United States.    fighting words! The American administration is very concerned about the lack of Chinese domestic consumption.   Even before the COVID-19 epidemic, there were already the beginning signs of a slowdown, automobile sales were off.   China is facing domestic deflation (a clear sign of collapsing demand) China imports few consumer goods, they import raw materials and intermediary goods.   It seems that the American administration is concerned that the Chinese administration will dump consumer goods abroad to keep its manufacturing machinery ...
Post a Comment
Read more