Farmer Diaries

On Monday the US head of equity at GS said that he could only see blue skies ahead and that the bank's new S&P target was 2,850.  This morning the economist of GS said that the last time the market had the same "symptoms"  -- you know it cannot be good when they use these terms, was in 1929 just before the crash. Both of these guys are based in the same building in NYC, you would think that they talk to each other!  In reality, the world of banks is constructed in such a way as to avoid this type of "collusion" There is a method to the madness. On the other side of the equation, GS can say it got it right either way:  If the world's economy continues to grow or if we are facing a 10-year correction a la 1929.  Only time will tell.

I was expecting the worse!  Truly I entered the cinema backward expecting a really boring and disjointed film (the only reason I went is that of the director, the stars and the writers).  Instead, I found a truly well-crafted movie, that leaves the viewer wanting more.  I understand too well why American audiences didn't like the move.  It may play well on the coasts but it's too close to reality (even today) for most Americans. The most amazing was the dialogue (background) of those protesting the arrival of a black family in an all-white suburb.  The movie takes place in the 1950s and what is amazing is that the dialogue (without the "negro" word) could be replayed in any conversation in 2017. This is a hard movie, with some really really bad people.  That's probably the worse of it, all the bad "hombres" are white, while the black family seems to be peaceful, compassionate and reasonable. An excellent movie

I didn't so much as miss the whole September figures because by now any Chinese financial disclosure I take to be complete bunk.  This morning Zero hedge had a very interesting article about the "one day" performance of Alibaba on which they sold a total of US$ 25 billion in goods -- to give a sense of the scope of this it's equal to the ANUAL sales of Sears & Kmart -- granted not companies that are in the best of health.  That Alibaba shipped more than 800 million packages...yeah, that's not a typo 800,000,000 packages where shipped in one day -- oh and by the way, Alibaba doesn't use a logistical courier service. Now, all that is just big numbers but here are two interesting statements: 1)  Alibaba announced that it's been one of its most profitable quarter (no numbers) 2)  Alibaba's delivery system is one of the best in the world...although it seems to be bicycles More interesting is that Alibaba is coming back to the US bond market, for ...

Empires tend to fail when the centers of power become self-absorbed in political struggles while the prosperity and security of the imperial lands decline.   (E. Gibbson) In Europe, things are getting interesting.  Theresa May’s government showed her true collar when a letter (email?) was made public in which Boris Johnson, her Secretary of State indicated how the UK could initiate a “hard exit” instead of a negotiated exit – that everyone in the UK expects.  Germany is less and less amused, it has figured out that (a) it would be a sucker’s bet, (b) that the UK leaving Europe is generally a bad idea -- therefore to be discouraged, and (c) that the UK is giving ideas to the Italians and Catalans. Britain's government is in disarray, each minister seems to have his own agenda as the prime minister faces rebels on all sides because she committed the cardinal sin of losing her majority and her authority.  Her lack of courage and inability to face up to the popular ...

Where do we start, two weeks ago the Euro was trading at 1.19 its now at 1.15 -- not a huge move but it's directional -- that means that the market thinks that the Euro has further to fall against the US dollar.  The question is always the same how far will it go!  More than 4 years ago I was certain that the Euro was on one-way road to sub 1 US dollar rate -- the reason was that while the US economy was not hitting on all cylinders it was doing OK, whereas Europe was in real trouble.  I still am convinced that the European experiment cannot continue the way it's going, either it breaks apart or further integration will occur. The fate of Italy, Greece, Portugal, and Spain hang in the balance.  There are no real tools for correction in Europe -- in a sense, Europe needs what all good unions require a method of creating transfer payment between the rich and poor regions.  In Europe, the opposite has occurred.  The Germans, who basically entered the E...

Italy First off, a new study shows that banks are unpopular in Italy -- swear to God someone decided that this was an important metric -- in a country where banks are continually being rescued by the central government.  Apparently, their popularity level is at 16% -- I suspect that banks are not very popular elsewhere either! Anyway, what is really interesting is the capital flight from Italy -- you see I don't like my bank at all, its services are expensive and when you really need there, they are not interested in working with you...but I know they are good at what they do and secure (Hurray for Canadian Banks).  What's going on in Italy is different; its capital flight to the tune of Euro 432 billion per annum (or at least for the past 12 months).  The problem is that the most popular political party right now is the Five Star Movement -- that is rabidly anti Europe (yes even after seeing what's happening in the UK -- which is not part of the Euro).  They wan...

Soooo, you want a loan? Usually this ends up being a short conversation with those seeking to finance their dreams.  There are good reasons for this; flawed business plan, no real thought of cash flow or even worse -- seeing a new business as "just a thing to do". However, for the thousands of false dreams there are the real MacCoys, the fully thought out business plan seeking financing.  Until recently, many of these ideas went unfunded -- some had a real objective of profits, others didn't -- but funding was difficult.  The first alternative platform of any significance was Kickstarter, and it produces some "winner" and some rather amazing funding projects. After 25 years as an investment banker, I can tell that most prospectus are a formula, sure there's some hard work by really really smart bankers but as the saying goes: "Garbage in garbage out"  maybe not the most elegant saying but what it lacks in elegance it more than makes up in its...