Farmer Diaries

Several of my friends (all ex-bankers) have been recruited to run family offices -- or at least the investment arm of family offices.  Overall the experience has been good, aside from the last minute: "fly down to Miami to brief me on what's going on" the work is interesting and moving from the sell side to the buy side can also be great. The overall view of 2014 was that it was a spectacular year.  All three (ok not that many) hinted that performance had been spectacular:  " its a lot easier to make money went you start with a lot".  The figures were simply mind blowing:  21%, 27% and 31%.  So what the encore for 2015? They are all taking their cash off the table. Bottom line, although they don't think the market is going to crash, but the odds of a market crash are higher now than they've been in some time; Oil price collapse -- still around $50/bbl is a problem for the debt capital market and housing market (here in Canada), but overall in the U...

Well its not like its a big surprise; on the right side you've got Greece's new government (now nearing its 30 days in power) and on the other side you've got ECB, Germany and well anyone that wants the fiction of a united Europe to continue.  What is amazing is that some believed that a deal was possible!  The signs have been there for months (years really), the ECB and the EU in general -- those committed to the ideal of Europe only want to "extend and pretend" a little longer. Now, the new "radical" Greek government's first test is not one they can afford to fail, otherwise their entire term will be wasted.  Germany's media and the German government are adamant that every single Euro will have to be repaid -- damn the consequences!  Moreover, the ECB's pre-emptive strike of reducing the ability of Greek banks to obtain additional liquidity gave the chance of successful negotiations very low (lets say around 50%), now things are worse. ...

In the right hand corner I give you the Grill Cheese Truck Inc (OTCMKTS:GRLD)  they listed about a week ago, raising some dough (US$ 10 million) to buy some stuff (mostly trucks I guess).  This company is a common type of product: they sell lunches to office workers in a few cities (off the back of a truck). There have been a number of comments from people I respect here and here and people I respect less here .   So far so good.  The company operates 9 to 11 trucks -- its not entirely clear from the 10Q that were recently issued -- its seems that they've franchised the concept with two trucks (yes a truck that sells home made grill cheese sandwich).  So these guys have total revenues of $1,000,000 and operating losses of $2 million.  They've never made money (well at least not since 2013).  They've got a total of $12 million in retained losses.   However, they recently sold some shares on the OTC market (about $10 million),...

So yesterday (Sunday) China announced its January 2015 trade position; and the result was surprising: Exports:  Down 3.2%  Expected:  +5.9% Imports:  Down 19%   Expected:  -3.2% Subsets: Crude oil imports fell 41.8% Iron ore imports fell 50.3% Coal imports fell 61.8% Exports to the European Union fell 4.4% Exports to the Hong Kong fell 10.9% Exports to the Japan fell 20.4% Exports to the Russia fell 20.4% None of this is good, in fact its terrible (sure China has a huge surplus...but) the implications for Canada and Australia are very serious in deed.  The Canadian correction will be massive (aside from Real Estate prices, we can expect job losses from a reduction in primary good exports) -- the same for Australia that is a major coal exporter. The story is always the same, while economic growth numbers can be "massaged" imports of "energy" cannot.  Fundamentally for economic growth (in an economy that makes things) there is a req...

European nationalists have successfully convinced us, against all logic, that the European crisis is a conflict among nations, and not among economic sectors. Today’s  Financial Times  has an  article discussing the travails of Greece’s new Finance Minister, Yanis Varoufakis as he takes on Germany: In a small but telling sign of the frosty relations between Berlin and the new Greek government, the German finance ministry last week criticised Mr Varoufakis for failing to follow through with a customary courtesy call following his appointment. Mr Schäuble, meanwhile, has warned Greece not to attempt to “blackmail” Berlin with demands for debt relief. This is absurd. Read Mr Pettis entire entry, facinating here

So yesterday the ECB decided that Greece's debt (rated as junk by everybody) was no longer acceptable as collateral to allow the Greek banks to monetise their assets -- so that they can keep on paying out the Euros in drove to all Greeks who know the game is up.  In a nutshell the ECB decided that after a week in power the new socialist government needed a taste of "the baseball bat", mind you its just a taste (Greek banks can still get liquidity but via a less attractive and more costly route). The ECB and Bruxelles bureaucrats (and their elected officials) want one thing, and one thing only -- extend and pretend .  They want the troika back in town and they want the status quo re-instated. The sad truth is that like Paris taxi drivers that protested the arrival of unknown Uber by going on strike, the ECB has shown themselves to be bullies.  The new Greek prime minister has made a number of speeches, and interviews, his ECB interlocutors have been caught a number of ti...

From $44.70 all the way to $57.15 in the space of 36 hours! Nothing in the world has changed US economy still appears to be slowing down China seems to be in a recession Europe is "sclerotic"   The S&P is up 2% on the day -- based on the good news. The question is what good news, what is so great, what has changed to make oil prices jump by nearly 20% -- in short nothing.  It would appear that a substantial segment of the market has decided that it was time for oil prices to rise (we are talking technical points here), so the market started rising, and the momentum trade followed through. Every few days a new conspiracy theory emerges; these days its Saudi Arabia screwing with Siria and Russia, some will say that the world economy is doing OK and that its a small oversupply that is driving everything, in fact OPEC is to blame, because this cartel controls nearly 35% of all global oil production, so they have huge control... I would not take this to the bank....