De-leveraging, tight credit markets and government economic experiments are the forces driving world markets... BDI 2127, dramatically down 45% in the last 2 months with all shipping rates lower regardless of vessel type or size...I don't invest around the BDI but like it....it is an old London house, it is updated daily and it is a good overlay tool against commodity prices as most metals, grains and raw materials must be moved by ship...As noted last week, the Greeks dictate much of this trade and deception/manipulation is common...BTW, BDI is flat YoY...US rail traffic shows 288,000 freight cars out, rolling 32 billion ton miles of freight, cars and cargo up 11% YoY...no Greeks involved...CRB 471, flat and stable....London copper 6522 USD/tonne, up 200 bucks this week, stable...Oil 73.24 USD for the light/sweet...stable...Gold 1192 USD on the spot at 1000EDT, off this week but that only strengthens it's base...GLD(the ETF) holds 60 billion dollars on paper, returning 14% YTD...S&P
1037 off marginally on the week but down 8% for the year...where's your money?...Inflows continue to US Treasuries with low yields and high coupons being the indicator...safety over return= worldwide economic decay...need more proof, how about VIX 30+...Last weeks unemployment numbers show continued weakness with official unem rate at 9.5%, shadow at 20%...these numbers reflect structural problems stemming from wages sticking above equilibrium, weighty government fees and regulations, a high minimum wage and welfare/government benefits reducing the incentive to work (evergrowing entitlement mentality)...adding to this decay are a mismatch of labor skills to needs...cheered up yet?...Look, we are experiencing a huge deleveraging...the CDO ghost is still around and even with the money spouts marked "Keynes" wide open, many economies (x China, Australia, New Z) are still contracting...high unemployment, declining RE markets and contracting money supply are manifestations of this decay...The
Wizard of Ob and his friend "print more money"
Ben are being snowballed by past and present debt creation and government growth...But remember the Keynesian creed, it is repeated by the Fed every new day, “By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”....for the Wizard and Ben, increasing liquidity, money supply and credit are the keys to Keynesian fulfillment and economic joy....look, for you econ minors, Obama is trying to shift the aggregate demand curve upward on the demand line by adding reserves...his problem is the demand line is flattening so instead of expansion we are witnessing a contracting GDP and no inflation (yet) as the graph would predict...add a "sticky" price and wage environment and, voila, here we are....the solution from DC?...look at the gas gauge, it is showing empty but I'm pretty sure the Emerald Palace and the Fed will just keep driving, inflation is the only way to refill the tank....of note, Saudis are collecting up BP which may stabilize credit swaps..Ideas? I still like currency arbitrage and related trades...we are in the new normal, get used to it...Disclose..I got Gold, oil, the
miners, STO, EMR, MSTR, NICE, a gas well..hard assets rule...Out, W
"Words ought to be a little wild, for they are the assault of thoughts on the unthinking." JMK...I never said he was wrong
No comments:
Post a Comment