Farmer Diaries

The EU has been rather adamant that the UK will pay a very steep price for exiting the European Union.  In fact, requiring that the UK pay for everything.  The figure could be anywhere between Euro 60 billion and Euro 200 billion.  In effect, the EU has asked all its institutions to create a list of demands -- like a divorce, the demands can (will) be outrageous, because if you don't ask, you certainly will not get. How the whole thing plays out is a different story.  There is no doubt that the EU wants its cake and to eat it too!  The UK has the same problem, of course its not about "cash" rather is about access to markets and ability of British National to travel freely within Europe.  The Ft this morning indicated that the UK will need to negotiate more than 700 treaties with various countries over various issues (so lots of work there). How all this plays out is dependent on many factors: (1) British Elections: This morning the worse possible news for T

now that's clearly BS since just north of California there is a state (British Columbia). That has universal health care, and the cost is, per capita, just a little less than half a f what it cost in California! That's the truth!  Ho do we get an explosion in cost, you don't simply a hit piece by a dishonest hack. Who is pushing a line. The fun thing is that not only are wages lower in Canada, but so are ancillary corporate costs, since "the state". Assumes the cost of health care. Just though it t was funny, that someone would write such BS and that no one would say anything

Over the past 3 months the Euro has exploded (8%) against the US dollar, moving from 1.04 to 1.12 in the space of only 90 days, this is a massive movement in the European currency and is difficult to understand or explain. First, is the Euro improving or is the dollar falling off a cliff?  These may seem to be the same thing but they are not; looking at other Euro pairs (Yen, CAD, Peso) and you get different result; The Mexican Peso -- third most traded currency (I know who knew) is looking at a price move of nearly 7% over the past 6 months, but of course the Peso was seriously devalued in 2016 -- a reflection of all things Trump -- since then the Peso has returned to its long term trend (slow 3-4% annual devaluation to reflect the higher inflation rate). The Yen:  After the November election the Yen took a fall from 104 to 118 against the USD, this is slowly reversing itself towards 110/11 (seems to be an appreciation trend The CAD:  has remained largely unchanged around 1.3

I've been reading a number of articles of late on the anti vaccination movement in the US  The strangest aspect is that most anti-vaccine people are well educated and rich.  Where did these ideas come from, how come it remains at the forefront of discussion (mostly in the US)?  The same for Chem Trails -- that's the idea that jet "mix" in their exhausts chemical to do something -- bottom line whatever they are doing its very very dangerous... How can reasonably smart people believe this utter bullshit?  I mean think about it, it makes no more sense than Pizzagate -- that's the story that Clinton and friends were running a child abduction (I think) center in the basement of a DC pizzeria (called Comet) so certain that this as fact that one crazy guy even went to investigate (with his long gun) -- and didn't believe the owner when he told him that the pizzeria had no basement.  apparently shots were fired. All these stories have one thing in common, Facebook

This morning, the talks between Greece, the EU and the IMF broke down again.  There is no panic in the air, because everyone knows that it will be resolved...eventually. I say this with far less conviction than in the past.  Until last year, when the last debt renegotiations took place there was a sense of doom, now not so much.  It may have to do with the departure of the United Kingdom from the EU, that Greece's exit is no longer such an issue, it could be that everyone believes that a deal will happen, at the 11th hour as usual. The true cynic believe that the whole thing will be wrapped up once Merkel has won her elections in late September -- Greece has a debt payment due in July,  which it cannot repay, its economy has sunk back into recession, but there is simply no sense of market panic. So to recap; for the past 4 years Greece has been going from nowhere to bad, recession, mild recovery and it can expect more of the same for the next 20 years.  The youth of the count

I had an epiphany this morning, reading, again about Trump's many travails -- own goals and simple stupidity.  The troubled White House is leaking like a sieve and that means that everything that Trump does will become part of the national conversation. I mean we know he records CSPAN on his 60 inch TiVo powered television so that he can watch the blow by blow of Congress with comments -- who in the world needs to know that, except it shows one thing, the President is not really minding the store, he's acting like a Monday morning quarterback.  He should be making decisions not judging the decisions of others.  If it is true, that the Israeli information on bomb in laptops was a "Do not share", and he did anyway, then it shows his carelessness.  Or the fact that the White House was "tricked" in allowing a photographer from TASS into the Oval office (while the US press was excluded) must have amused Putin to no end.  However, it shows a White House that is

So the President decided to share top secret information with the Russians, so far nothing illegal has been done, stupid maybe, but not illegal, literally the President decides what is and what is not secret. That's the positive side -- there is no crime here! Now the negative; (1) If the Post's story is correct (note: Trump confirmed that it was) this secret information was given to the American intelligence community -- with a do not share request.  That country will now reduce the amount of information it shares with the American government.  At the very least the NSA/CIA and other acronyms will be much more careful it what they share with the President.  That's bad, because less information is bad -- especially when people are out to get you. (2) Trump asked three of his future ex-employees to go out on and say that Trump did not share any secret information -- and that the Post got the story wrong...12 hours later Trump tweets that "it's true, I shared c

So oil is back flirting with $50/bbl...again.  Apparently there was a deal done over the weekend to restrict supply...again, and so the market dutifully went up... again.  The stock market that had been a northingburger (yeah low vol but not much overall activity) is up nearly 1%, on a news lite day. Straying a bit into politics, I note that Trump has been staying away from Twitter this weekend, I thing, but maybe he's been too busy remember all the names of the countries and people he will be meeting in his upcoming, golf free, foreign trip.  Historically, Canada has been the first port of call of any new president, this year, not so much, and Canadians (starting with the Trudeau) seem perfectly happy that Trump is going elsewhere -- reduce the police budget for 2017!  The absence of enthusiasm for Trump's possible visit to Canada, mirrors that UK's recent "rescheduling" of Trump's long announced visit to the UK, there too the government decided that his v

The VIX (volatility index) has not seen such low levels in nearly a quarter of a century...24 years to be exact.  Looking at the market something strange is afoot; the price rise of the SPX has been concentrated in a few big stocks (Google, Apple, Facebook, Amazon etc) whereas the rest has been languishing in "nowhereland". What is going on; gold is in the forever band of US$ 1,200/oz, king copper dropped down (granted no one knows why), and oil is back screwing around the mid $40/bbl and so the economic hard data (PMI etc etc) are fading and also doing very little to encourage the market.  In fact, until a few days ago, the SPX and consumer sentiments were the two outliers, until late last week when consumer sentiment started tanking -- joining the ranks of hard data and other stuff. The question is what's going on; could it be central bank liquidity that has no where to go, and has selected these hyper stocks as a good store of value (better than Treasuries?) what i

Committed to Europe Reduce Payroll taxes Liberate the economy Better Education Securing Europe's borders  Committed European: I am not certain these are Macron's biggest promises but they do represent substantial "challenges". On the bright side, the first one is the easiest because Macron doesn't have to do anything.  LePen's cue was that her party was anti-Europe, mainly to stop the flow of immigrants -- ( et tu Theresa May?).  But again this one means that France, its institutions, remain committed to the ideal of Europe. Reduce Payroll Taxes:  The issue of taxation is a serious one in France, but also Germany where marginal tax rates are high, much higher than anywhere in North America -- but not only are taxes high, the government deficit is also very high.  While reducing payroll taxes will make employing additional workers, I suggest that changing work rules (such as 35 hour work week) and other shift (very very difficult) are necessary.  M

Canada are not morons, they know that the best way to get Donald Trump's (short) attention span is to get him where it hurts: American coal exported via Canada -- shut that sucker down! Any US production subsidies (an there are a lot) Could go after US airlines -- after all US airlines don't pay the cost of air traffic operations... Again the issue is that Trump doesn't understand his business (that of being President of the good old US of A).  Canada can create massive pain for Trump, lets not forget that Canada has a $50 billion trade deficit with the US -- the pain will be far more one sided that Trump realizes. Good weekend all

That was today in London -- the above graph is for copper and when copper falls things are serious.  Now the reason for the fall is that inventories jumped 12% -- obviously the "culprit" is China (not really but that's what going to be written in the press!). The reality is that the world seems stuck in neutral, and China -- the $1 dollar work shop of the world is feeling the sting.  Despite massive infrastructure spending the country's growth is decelerating, moreover, the government seems to finally take the growing debt problem seriously, forcing banks to recognized off-balance sheet loans as part of the banks' lending and thereby leverage. On the other side of the planet (i.e. America) we have consumer sentiments rising, but PMI (actual hard numbers manufacturing) slowing to zero growth.  For the past few months, the current American administration has been glowing in the rising consumer sentiments -- unfortunately, with more than 8,000 announced store

NOTE:   Since I wrote this article the Italian government has agreed to bankruptcy whereby the airline will either be sold (unlikely) or be wound down -- another 12,000 jobs are gone!  Old joke; How do you make a small fortune in the airline industry?  Start with a large one! Europe suffers from too many legacy sovereign airlines that simply cannot compete with the new players, or older players that decided to make hard decisions.  While I too would like to earn a Euro 75,000.00 to be a flight attendants its simply not economical, especially one that is restricted to the total number of hours he/she can fly.  This may sound callous but its the truth, in large part a flight attendants is paid a large  multiple of what a a waitress would get. I focus on salaries and work rules, which are a problem, but its also a culture problem.  I flew Alitalia many times and I was never impressed with the product -- its not a question of how new the equipment was, rather its a question of attitu

Housing is a fundamental and important component of the economy, its represents a substantial percentage of any country's GDP -- think not only new construction but renovation.  Most in the West, and especially in North America have a conception that housing ownership is a basic component of life, liberty and everything else.  In other words, buying a house should be the first and most important move anyone makes. House price in Canada didn't correct in the same way as they did in the US (or anywhere else) banks were not affected by the "housing crash" which didn't happen anyway!  After 2008, despite the world correction, oil prices and commodity prices remained high in Canada.  There are no doubts that places like Windsor suffered (Canadian capital of the automobile manufacturing).  Moreover, none of the exotic American mortgage products made it to Canada -- no teaser rates, no NINJA no nothing.  Moreover, mortgage rates in Canada reset every 5 years -- there i