Dry bulk set to break the upside after a very long drought.
GNK
GOGL
DSX??
NMM
gh
Tuesday, March 6, 2018
The Beady Eye!
Don't neglect the BDI....
Dry bulk set to break the upside after a very long drought.
GNK
GOGL
DSX??
NMM
Add to positions on the way up.
gh
Dry bulk set to break the upside after a very long drought.
GNK
GOGL
DSX??
NMM
gh
Friday, February 16, 2018
Of Course it is About Inflation!
Look! The market went down and then it went up!
So it can't be about "inflation"!, they say.
Yes, it IS about inflation. Let me explain.
Start with the famous quote by Milton Freidman, "inflation is always and everywhere a monetary phenomenon".
Now consider that for the last 40 yrs. the central banks of the world have been fighting deflation with monetary stimulus. The deflation from Asian imports was countered with free money. What else was there to do???
We put all of our manufacturers out of business and laid off the help. In a "normal" world the nation would experience a colossal depression and imports would be unaffordable. But instead of that terrible thing we printed money by making credit available to everyone. We created a "service" economy out of thin air. We spread the credit around and got into the business of serving each other. (For minimum wages, of course) So we had some money to buy those imports. The importers had huge margins, stocks went up, and we all got on the gravy train as we became a "service and financial" economy.
That deflationary wave lasted most of the last decades. Now, Asia is coming into their own so to speak. They want broad increases in standards of living. China is increasing wages by letting the yuan appreciate. They do that by NOT buying U.S. dollars. Same in the rest of the emerging world. They will start to consume what they produce. That means prices for us will go up as the standards of living in the whole world go up, production being equal.
For decades we only measured inflation as the price of commonly used goods. Those were in good supply. Food, energy, etc....We didn't measure financial asset prices as part of inflation, but they surely were inflated if you consider what they would have been without central bank credit.
So, yes, it was inflation that we caught a whiff of. Another "taper tantrum"....
They will think of excuses and other names for what is and will happen, but it will be the result of free market capitalism and easy credit for decades. Because capitalism works. Capitalists make money. The profitable enterprises survive and prosper. And they stash the money away or loan it to others. This is the function of sovereign wealth funds. They "save", to coin a word. And now, in order to raise the standards of living of themselves they will spend what they have saved. That means there will be more money coming into the markets to compete for the goods we take for granted. And they will be using our money. Well it was 'ours'....But they have most of it now...
Interest rates will rise for those with demand for money and no savings....That is us...
What will democratic societies do when faced with a lack of money. We are in the process of cutting our safety nets. Cutting social programs. And running up our national debts even as we speak.
Perhaps we will depend on the kindness of strangers? Or central banks!
Alas.
So it can't be about "inflation"!, they say.
Yes, it IS about inflation. Let me explain.
Start with the famous quote by Milton Freidman, "inflation is always and everywhere a monetary phenomenon".
Now consider that for the last 40 yrs. the central banks of the world have been fighting deflation with monetary stimulus. The deflation from Asian imports was countered with free money. What else was there to do???
We put all of our manufacturers out of business and laid off the help. In a "normal" world the nation would experience a colossal depression and imports would be unaffordable. But instead of that terrible thing we printed money by making credit available to everyone. We created a "service" economy out of thin air. We spread the credit around and got into the business of serving each other. (For minimum wages, of course) So we had some money to buy those imports. The importers had huge margins, stocks went up, and we all got on the gravy train as we became a "service and financial" economy.
That deflationary wave lasted most of the last decades. Now, Asia is coming into their own so to speak. They want broad increases in standards of living. China is increasing wages by letting the yuan appreciate. They do that by NOT buying U.S. dollars. Same in the rest of the emerging world. They will start to consume what they produce. That means prices for us will go up as the standards of living in the whole world go up, production being equal.
For decades we only measured inflation as the price of commonly used goods. Those were in good supply. Food, energy, etc....We didn't measure financial asset prices as part of inflation, but they surely were inflated if you consider what they would have been without central bank credit.
So, yes, it was inflation that we caught a whiff of. Another "taper tantrum"....
They will think of excuses and other names for what is and will happen, but it will be the result of free market capitalism and easy credit for decades. Because capitalism works. Capitalists make money. The profitable enterprises survive and prosper. And they stash the money away or loan it to others. This is the function of sovereign wealth funds. They "save", to coin a word. And now, in order to raise the standards of living of themselves they will spend what they have saved. That means there will be more money coming into the markets to compete for the goods we take for granted. And they will be using our money. Well it was 'ours'....But they have most of it now...
Interest rates will rise for those with demand for money and no savings....That is us...
What will democratic societies do when faced with a lack of money. We are in the process of cutting our safety nets. Cutting social programs. And running up our national debts even as we speak.
Perhaps we will depend on the kindness of strangers? Or central banks!
Alas.
Monday, February 5, 2018
What? Me Worry?
Oh, puhleez!
Does anyone really think the central bankers of this world will actually act to stop inflation?
The world has been waiting for inflation for decades to bail us out of our debts.
As money flees bonds it is more likely to be invested in oil, or steel, or gold...
Assets, in other words.
The only troubling spot is if wages for the workers start to rise. But that will be needed to offset a rise in the cost of consumer credit.
Methinks the stock averages protest too much.
They ain't making anymore world, you know.
Tuesday, January 9, 2018
Is This Time Different?
I remember quite well what happened when long bonds were set to go down in '07.....
Here is an interesting chart of the long bond "bubble".
How much of "growth" is dependent on consumer debt and lending?
If there was a movement from long bonds to other assets would that include "real" assets?
The chart.
Here is an interesting chart of the long bond "bubble".
How much of "growth" is dependent on consumer debt and lending?
If there was a movement from long bonds to other assets would that include "real" assets?
The chart.
Timing is everything.
gh
Friday, November 17, 2017
Silver to Shine
The U.S. Dollar is on a path to secular weakness.
It is showing in this chart of Silver Standard.
It is showing in this chart of Silver Standard.
Friday, October 20, 2017
Rising Wedge in U.S. Housing Prices?
The 'Rising Wedge' is fairly reliable technical analysis chart pattern, particularly when the price rises on ever lower volume.
Every month the U.S. housing numbers reflect rising prices with a lack of sellers. Inventories down.
Two questions.
Why no sellers?.......... Are the survivors of the last crash holding on. What do they do if prices start to fall?
How will higher interest rates affect the buyers? Wages continue under pressure in the U.S. Can new buyers afford higher interest payments or higher down payments?
Will a strong dollar temper foreign demand?
What do the bank balance sheets look like with respect to housing loans?
Every month the U.S. housing numbers reflect rising prices with a lack of sellers. Inventories down.
Two questions.
Why no sellers?.......... Are the survivors of the last crash holding on. What do they do if prices start to fall?
How will higher interest rates affect the buyers? Wages continue under pressure in the U.S. Can new buyers afford higher interest payments or higher down payments?
Will a strong dollar temper foreign demand?
What do the bank balance sheets look like with respect to housing loans?
Wednesday, October 18, 2017
Steel Yourself!
Are we on the verge of yet another "supercycle"?
Trump is energetic about deficit spending and fiscal stimulus.
Look at some similarities in the long term chart of AK Steel.
The only real difference is the trend over the last few years....
But hope springs eternal!!
gh
Trump is energetic about deficit spending and fiscal stimulus.
Look at some similarities in the long term chart of AK Steel.
The only real difference is the trend over the last few years....
But hope springs eternal!!
Thursday, October 12, 2017
Worldwide Recovery?
It seems every stock market in the world is rising to new highs on anticipation of economic growth.
Even the lowly Baltic Dry Index is recovering.
I don't see much movement in the shippers, though.
It does seem about time to this trader.....
Baltic Dry Index at Bloomberg
Dianna Shipping DSX
Control risk.
gh
Even the lowly Baltic Dry Index is recovering.
I don't see much movement in the shippers, though.
It does seem about time to this trader.....
Baltic Dry Index at Bloomberg
Dianna Shipping DSX
Control risk.
gh
Monday, August 28, 2017
Next Hyper-Inflation?
As global warming continues to create extreme weather events it may be the seed of the next worldwide hyper-inflation as countries spend to remediate the destructive events and as industry and food production is impacted and as economies are 'stimulated' to avoid debt defaults.
gh
gh
Thursday, August 17, 2017
Slouching Towards Armageddon
Are we having fun yet?
The President of the United States has fully convince a clear majority of the world that he is completely unfit for his job.
All that is left is for him to resign.
A Pence presidency will get the Republican agenda back on track quickly. I suspect the country is willing to leave this episode behind as soon as possible.
Do it, Mr. President. You are costing the country immensely.
gh
The President of the United States has fully convince a clear majority of the world that he is completely unfit for his job.
All that is left is for him to resign.
A Pence presidency will get the Republican agenda back on track quickly. I suspect the country is willing to leave this episode behind as soon as possible.
Do it, Mr. President. You are costing the country immensely.
gh
Wednesday, June 7, 2017
Dollar Weakness Continues
US Dollar weakness continues. Gold and Silver start to heat up.
The strongest of the lot shown here as holding trade.
President Trump is shaking the worlds confidence in the country and promising to cut taxes and spend on infrastructure.
Long yields persist in weakness.
gh
The strongest of the lot shown here as holding trade.
President Trump is shaking the worlds confidence in the country and promising to cut taxes and spend on infrastructure.
Long yields persist in weakness.
gh
Wednesday, April 12, 2017
Old Paradigm President
Presidente Trump states he thinks the U.S. Dollar is too strong and that he prefers interest rates to be low.
He also states that he hasn't decided whether or not to extend Janet Yellen's tenure.
Hint, hint....
I guess our fearless leader prefers the old paradigm.
I do too, actually. There is no other way for the world to escape the debts we are in.
I just hope we raise taxes on the rich when we start to inflate away our problems.
Just saying,
gh
He also states that he hasn't decided whether or not to extend Janet Yellen's tenure.
Hint, hint....
I guess our fearless leader prefers the old paradigm.
I do too, actually. There is no other way for the world to escape the debts we are in.
I just hope we raise taxes on the rich when we start to inflate away our problems.
Just saying,
gh
Saturday, April 8, 2017
Jobs Numbers
Jobs numbers came in for the month. 98K new, much less than expected, with previous months revised down.
Is this the start of a slowdown, or just an oddball number?
Some say the low number is because employers can't find workers, so don't hire.
If we assume this latter answer is true, what does it mean?
Demand is still high for products and services? Yes?
Wages will go up? Yes?
Interest rates must rise? Yes?
Corporate profits under pressure? Yes?
President Trump wants infrastructure spending and to build his wall. Labor needed.
What does a rise in interest rates do to the oil industry? Junk bonds?
And this at a time when U.S. corporations await a tax cut, which if enacted would increase U.S. govt debt.
All of these types of things take time to play out, but from a big picture perspective could be game changing.
And our Federal Reserve seems intent on raising rates to show that they can, but with a very cautious stance.
Europe recovering? Oil recovering? Emerging markets?
Time to tread water? No firm choice. Wall of worry. Or change from decades of disinflation?
How well do paradigms change?
gh
Is this the start of a slowdown, or just an oddball number?
Some say the low number is because employers can't find workers, so don't hire.
If we assume this latter answer is true, what does it mean?
Demand is still high for products and services? Yes?
Wages will go up? Yes?
Interest rates must rise? Yes?
Corporate profits under pressure? Yes?
President Trump wants infrastructure spending and to build his wall. Labor needed.
What does a rise in interest rates do to the oil industry? Junk bonds?
And this at a time when U.S. corporations await a tax cut, which if enacted would increase U.S. govt debt.
All of these types of things take time to play out, but from a big picture perspective could be game changing.
And our Federal Reserve seems intent on raising rates to show that they can, but with a very cautious stance.
Europe recovering? Oil recovering? Emerging markets?
Time to tread water? No firm choice. Wall of worry. Or change from decades of disinflation?
How well do paradigms change?
gh
Thursday, March 30, 2017
One Good Trade?
Long time between posts, just waiting to see how the Trump circus shakes out.
Dollar finally showing weakness along with the new Administration.
Interest rates want to stay low.
Housing starts warming up. Complaints of lack of labor.
I found what appears to be the possibility of a good trade in Lumber Liquidators.
This stock crashed a couple years ago due to bad publicity about chemicals in their wood, as I recall.
I don't really give much attention to "news". I watch price.
If this stock gets much above $20/share it has the potential to run up quite sharply, most likely due to short covering.
Recent volume says as much.
Housing news....
Add to strength.
gh
Dollar finally showing weakness along with the new Administration.
Interest rates want to stay low.
Housing starts warming up. Complaints of lack of labor.
I found what appears to be the possibility of a good trade in Lumber Liquidators.
This stock crashed a couple years ago due to bad publicity about chemicals in their wood, as I recall.
I don't really give much attention to "news". I watch price.
If this stock gets much above $20/share it has the potential to run up quite sharply, most likely due to short covering.
Recent volume says as much.
Housing news....
Add to strength.
gh
Wednesday, March 8, 2017
Smoot-Hawley Redux?
From the article:
" America’s monetary and capital structure from 1921 to 1929 was primarily shaped by six factors: first, a centrally planned monetary system; second, a decade of disguised inflation; third, branch-banking restrictions; fourth, state deposit insurance programs; fifth, agricultural subsidies; and finally, a plethora of taxes and regulations."
https://fee.org/articles/the-smoot-hawley-tariff-and-the-great-depression/
After the Republicans in Congress sweep the remains of the ACA under the rug they move on to trade.....
More uncertainty ahead,
gh
" America’s monetary and capital structure from 1921 to 1929 was primarily shaped by six factors: first, a centrally planned monetary system; second, a decade of disguised inflation; third, branch-banking restrictions; fourth, state deposit insurance programs; fifth, agricultural subsidies; and finally, a plethora of taxes and regulations."
https://fee.org/articles/the-smoot-hawley-tariff-and-the-great-depression/
After the Republicans in Congress sweep the remains of the ACA under the rug they move on to trade.....
More uncertainty ahead,
gh
Wednesday, February 22, 2017
Why Raise Rates?
Everywhere on CNBC are the talking heads lamenting that the Fed is behind the curve.
Bob 'Cool Breeze' Pisani asks, "why not raise in May?"
Santelli is always mad at the Fed. That is his default position.
Yet the dollar stays strong....
And the long bond hangs steady.
And Trump and Congress seem to have no decisions imminent on whether austerity or fiscal stimulus.
They are pushing through tax cuts, unless we consider border taxes, which may raise costs for the little people.
Autos are bought almost entirely with credit...
We have a rental housing crisis.....
Farm labor is getting kicked out of the country....
Social programs are under assault....
N. Korea rattling sabers...
Russia?....
Iran?....
Syria?....
Trump places govt. hiring on hold.
Most appointees not appointed.
I see quite a bit of uncertainty for the Fed to consider.
gh
Bob 'Cool Breeze' Pisani asks, "why not raise in May?"
Santelli is always mad at the Fed. That is his default position.
Yet the dollar stays strong....
And the long bond hangs steady.
And Trump and Congress seem to have no decisions imminent on whether austerity or fiscal stimulus.
They are pushing through tax cuts, unless we consider border taxes, which may raise costs for the little people.
Autos are bought almost entirely with credit...
We have a rental housing crisis.....
Farm labor is getting kicked out of the country....
Social programs are under assault....
N. Korea rattling sabers...
Russia?....
Iran?....
Syria?....
Trump places govt. hiring on hold.
Most appointees not appointed.
I see quite a bit of uncertainty for the Fed to consider.
gh
Tuesday, February 14, 2017
Fed Balance Sheet
Janet Yellen discussing the Federal Reserve Boards bloated balance sheet and the need to reduce holdings at a time that they find it will not hurt growth. (to paraphrase)
I am reminded of the lessons in Reminiscences. When you have a big position you have to wait for the right time to turn around. Given the size of the balance sheet I suspect they will have to wait a while longer. Buyers are disappearing from the bond market and the fiscal side is simmering.
Now is not the time.
Quote, "We will wait for greater clarity."
gh
I am reminded of the lessons in Reminiscences. When you have a big position you have to wait for the right time to turn around. Given the size of the balance sheet I suspect they will have to wait a while longer. Buyers are disappearing from the bond market and the fiscal side is simmering.
Now is not the time.
Quote, "We will wait for greater clarity."
gh
Monday, February 13, 2017
Worldwide Inflation
"Inflation is always and everywhere a monetary phenomenon."
Milton Freidman
Famous quote. Inflation is the result of devalued currencies.
Stock markets rocketing up all over the world.
Commodities strong. Lumber..... Steel....Silver....
Most people watch their domestic currency and lament strength. Lament the difficulty of putting people to work exporting goods. Populism strong. "Do Something!" they yell.
I think all currencies are going down in value. We must stop seeing them only in relation to each other. The fruits of the currency wars are getting ripe!
The reference points are resetting.
Control risk,
gh
Milton Freidman
Famous quote. Inflation is the result of devalued currencies.
Stock markets rocketing up all over the world.
Commodities strong. Lumber..... Steel....Silver....
Most people watch their domestic currency and lament strength. Lament the difficulty of putting people to work exporting goods. Populism strong. "Do Something!" they yell.
I think all currencies are going down in value. We must stop seeing them only in relation to each other. The fruits of the currency wars are getting ripe!
The reference points are resetting.
Control risk,
gh
Wednesday, January 11, 2017
Confidence in a Conman?
Today was interesting.
Today was the day that President-elect Donald Trump had a press conference. All was well until Donald Trump started to speak. At that point stocks went down, bonds went up sharply.
And the U.S. Dollar went down rapidly.
With this market reaction to the amateurish clown we have elected to be leader of the free world in mind, I couldn't help but think that a weak U.S. Dollar would be in the interest of Russia.
Russia depends on oil and gas for hard currency income. Energy is about the only game they have.
If the world loses confidence in the leadership of the United States, and the United States economy, the currency will suffer, interest rates will ultimately rise, stagnation and inflation will set in, furthering the weakness in the dollar as the citizens focused on the stock indexes scream for stimulus.
The winner will be Russia and the oil exporters around the world.
If there is a bigger and more focused reason for Russia and Putin to meddle I can't help but think it may be the price of oil.
On a side note: Have you noticed uranium lately?
Control risk,
gh
Today was the day that President-elect Donald Trump had a press conference. All was well until Donald Trump started to speak. At that point stocks went down, bonds went up sharply.
And the U.S. Dollar went down rapidly.
With this market reaction to the amateurish clown we have elected to be leader of the free world in mind, I couldn't help but think that a weak U.S. Dollar would be in the interest of Russia.
Russia depends on oil and gas for hard currency income. Energy is about the only game they have.
If the world loses confidence in the leadership of the United States, and the United States economy, the currency will suffer, interest rates will ultimately rise, stagnation and inflation will set in, furthering the weakness in the dollar as the citizens focused on the stock indexes scream for stimulus.
The winner will be Russia and the oil exporters around the world.
If there is a bigger and more focused reason for Russia and Putin to meddle I can't help but think it may be the price of oil.
On a side note: Have you noticed uranium lately?
Control risk,
gh
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