Farmer Diaries

First off, having dinner two weeks ago with a long lost friend who worked in the first tier supplier segment to Boeing (e.g. guys who provide major subsystems), and gave me the "lowdown" on the birth and growth of the B737MAX.  None of this is confidential, in fact, all of it is available via different sources, what is unusual is the confluence of linked event that makes the whole saga look and feel a lot worse. This person is very well regarded by a number of world-class airline CEO, and once the Ethiopian airline crash occured he actually called them individually and suggested that they really really should ground the aircraft, that there was a fundamental problem that Boeing had overlooked. I really cannot make the connections here, it would basically reveal my source, again its not that the information is unknown just that he's put the events together because of his position in the industry, his knowledge of the players and literally having "no skin in the ga...

There is one very important secondary observation to make on the Argentina melt-down: one of main reasons we saw such a dramatic crash in bonds and the near 50% tumble in the stock market was the complete absence of serious market makers or broking .  This isn’t due to investment banks and traders not seeing opportunity in over-sold Argentina, but more a result of how capital regulations and trading rules have made it utterly non-economic to trade smaller, illiquid, risk markets.  The market was opportunistic.  We saw bid/offers wide enough to turn a supertanker thru – and it proved very difficult to execute any client orders. The Implications are serious – if we see a breakdown, then the collapse of liquidity across markets like High-Yield (now officially defined as anything yielding anything) and corporate bonds will be crushing.  Wide bid/offers and chronic illiquidity will massively exaggerate losses and deepen any sell-off.  It’s going to hit less liqui...

So CTV news came out with  "secret report" commissioned by ViaRail that to build a $4 billion high-speed rail link should not include Quebec City...now that's a real surprise!  (no not really at all).  The world's investment banks have been telling ViaRail that the most logical option was actually to "exclude" Montreal and Quebec City from a high-speed corridor.  Now, this analysis was done 20 years ago (I know I was the architect of one of these studies -- I know at least two other IB guys who said the same thing, something that ViaRail didn't want to hear at the time).   To give you a sense of timing all this took place prior to 9/11.  Since then Montreal has grown tremendously -- slowly catching up to the rest of Canada! Our conclusion, at the time, was there very little demand for travel from Quebec City to Toronto and only marginal traffic to Ottawa that was served daily (with a 42 seat aircraft), don't know the aircraft now, but there is stil...