• Jul, 2022
  • Jul 02, 2022
  • Gravitas: Global stocks lost $13 trillion in first half of 2022 - YouTube 
  • Jul, 2022
  • Jul 01, 2022
  • Survivorship bias skews art world investment value

    Stuff that goes down, people don't even want to sell it, so it doesn't get factored into the index. If values go up, people do sell. So it seems like prices just go up in the art world of investment.
  • Over the past week, although markets had like their first good week a week before, many commentators and analysts are saying very negative things
  • We need more capex spending, more pipelines built and more drilling, in order to transition properly to clean energy. The Fed can't change a supply problem (with hydrocarbons) no matter how it acts. It turns into much higher labor costs, energy costs, food.

    The US is begging SA to pump more while trying to remove the Iranian National Guard as terrorists, as well as the Houthi rebels.

    US is reducing restrictions on Venezuela (a 'known terrorist and funder of terrorism') at the same time as killing the Keystone Pipeline which would carry crude from the US's ally, partner and neighbor Canada to US refineries that can refine heavy crude.

    US politicians (Biden included, markedly) are vilifying Big Oil, threatening them (saying they would turn them off).

    Adding windfall taxes and things to energy is just saying we want prices a lot higher, Bass said, instead of getting behind them, as the highest energy producer in the world (way ahead of the second, Russia).

    In 7 years, the first nuclear energy will open in Wyoming.

    He thinks it's the golden age for private capitol investing in hydrocarbons for the next 10 or 15 years. Demand is inelastic and growing, and there's no alternative energy that could get there in time. There aren't enough minerals to put into the wind turbines and things.

  • When you print 40% more M2 (money in circulation), you're gonna get about 40% inflation (some things will cost more or less). Coupled with really poorly thought-through energy transition policy. - Kyle Bass
  • The Fed has just started to take liquidity out. It's going to take $100b out every month for 10 months maybe. He said wait to invest until the Fed starts to use the word 'pause'. He thinks a lot of the Fed's job is already done. Food and other costs will continue up unless there's a serious recession, but he thinks there'll be a mild one. Markets lower going into November, he said. - Kyle Bass
  • With input costs (energy, labor, raw materials in commodities) is causing many businesses to consider shutting down.
  • Example: US has tariffs on China for steel and aluminum

    Chinese state actors were basically giving free electricity to aluminum smelters in China to undercut price in America, that took US's capicity utilization of US's aluminum smelters from high 80s to 70 in one year. And when you drop below 80% capacity utilization you end up losing money as an industry. China was acting in an uneconomic fashion to try to put the US's industry out of business so the US would have a further reliance on China's ability to produce aluminum (strategic values for military and industry).

    So Yellen saying "You could save 8 basis points of inflation if you took those tariffs off" is ignorant of national security. He mentioned that if wall street was making decisions we'd all be speaking Chinese immediately, because they make short term decisions for specific profits, and politicians are required to think long term and consider national security.

    Kyle Bass' take

  • "It's really difficult to engage with [global] partners" - Kyle Bass (a monitorist at heart)

    ... "like China, like Russia, like Iran, like North Korea. China mostly. It doesn't share the same value system. They don't share the same legal system. We have a rule of law, they rule by law. And when it comes into times when there's global conflict or friction you see that globalization can lead you down a path that puts you in a very difficult position from a national security perspective."

    "It was probably a real bad idea to let 95% of the pharmaceutical ingredients for our antibiotics to be made in China. And have the global chip shortage around the world that really emanated from Taiwan, which makes 40% of the chips we need for just about everything."

    Various things being outsourced has to be thought of in terms of risk assessment, he said. 3-5 years away still from being self-sufficient on the chip side. Antibiotics and supply chains aren't rocket science, they just need to be reshored. While we watch the friction increase almost daily between the US and China. Xi, the most leverage China has is now, and every day that goes by they have less leverage, so things might happen sooner than later. China's media is really pushing the Taiwan issue.

    With Ukraine. For a long time things boiled, and one day war happened. Russia's control over Europe also could be said to be decreasing with time, as their supplier of energy.

    Because the White House changes every 4 or 8 years, the US needs a team that transcends administrations and needs a better grand strategy, he said.

  • Crypto lost $1t over the past few months, and people say a big part is because they can't attract new buyers

    The space operates like a ponzi scheme, where it takes new money to pay out old money. Crypto still has no inherent value (use). It's still speculation rather than utility.

  • Semi conductors versus longterm bonds being analyzed by CNBC

    Semis down versus longterm bonds up.

    Talking about going back to 2020 levels as a baseline. That's because then we were not in a rising rate environment, we had a huge tailwind to the overall market, a huge pull forward for semiconductors, hardware, everything across the board, but now we're in a rising rate environment, and everything is calculated on discounted cashflow. That's why tech stocks will run (upwards in value) when rates are low and not when we're in a rising rate environment.

    2020 might not even be the right thing to look at, because then there was no inflation, and rates were at zero. So equities maybe should be valued even worse than that.

  • Jun, 2022
  • Jun 29, 2022
  • What's good for Robin Hood is the thing that's worst for it's users. Josh Brown's point

    Anyone who uses the app a ton is going to lose money, which is bad for them. But this is what Robinhood needs to have profits or to grow
  • "They gotta stop manipulating long rates. They have to let the free market do that." - Dan Morehead

    He also said that while 30% of Americans are trying to buy a home, 20% of all homes sold last year were sold to institutional speculators with money borrowed from the Fed.

  • Jun, 2022
  • Jun 27, 2022
  • Wall Street was looking for basically anyone who was willing to come, or even log in for them, hiring, but now they're looking to cut back

    They hired thousands wach. JPM and Goldman hired like around 20% more. Wall Street is a boom and bust thing. When the deals are coming you have to have people.


    IPSs down 90%
    High-Yield debt offerings down 75%
    M&A down 30%
  • Jun, 2022
  • Jun 26, 2022
  • Consumer confidence is lower now than after 9.11, and after the 2008 financial crisis, said Rick Newman
  • Jun, 2022
  • Jun 24, 2022
  • The market has priced in a recession probably, but not a consumer credit hit, probably, which might come after a recession
  • Jun, 2022
  • Jun 23, 2022
  • Oil prices down 8 straight days

  • UK is having a big rail strike

    Significant percentage of rail network closed. I think the demand is higher pay.

  • About 100 tech companies are downsizing right now

    Possible end to employment-related inflation.

  • The biggest increase in military spending since the 90s. 40% for air force 20% on the Navy. 17% for ground forces. 35% to refill ammunition depos and upgrade cyberwarfare and kit.

    They want 35 Lockheed-Martin F-35s, 60 Boeing Chinook helicopters, and 15 Eurofighter typhoon jets. They'll also spend on R&D, combat cloud, combat air systems (6th gen fighter jet), submarine tech, frigates, artillery, tanks. In cooperation with other European countries and the US.

    They don't currently have a single combat-ready division, reportedly. They plan to have a combat ready division in 2025.

    What was their use to NATO? "On paper" they have 350 Pumas (150 can be used), 51 Tiger helicopters (9 ready). They use analog (not encrypted) radios.

    30% of their navy is seaworthy. Their army has 200k soldiers, down from 1990's 500k.

    They're planning to up their spending to 2% of GDP on defense.

    But they have to get approval to pass this. Germany has a lot of pacifism, but it's currently anyway getting a lot of support.

    An interesting thing in Germany is when there's bidding for a defense contract, the loser can challenge the decision, which can stall things for years. German contractors do sue each other sometimes, delaying things for years also.

  • Jun, 2022
  • Jun 22, 2022
  • In the USA, 30 companies control 95% of the $31b chicken industry

    Processing 1.5m birds per week.

    The Shocking Ways Lobbyists Eliminate Competition in the Farming Industry - YouTube  
  • USA at the beginning or at the cusp of a recession, said Bookvar

    What's better? A fast recession and fast recovery, or slow?

    He thinks the Fed will tolerate a 3 or 4% inflation rather than try to push it down to 2%, leaning more toward helping the economy rather than control inflation. The labor force is keeping inflation elevated.

    Everyone still has money in the bank, so inflation will stay.

  • Housing

    Doesn't this chart mean, though, 'everywhere'?

  • Three straight days of green for markets

    It's at about 15ish times forward earnings, not historically cheap, but considering the concentration in bigcap tech stocks, equal weighted it's more like 13x. "Around fair value."
    Small cap 600 under 11x.

    No one really saying that means the value is good.

    People looking toward earnings forecasts / revisions for info.
  • What does a communicative Fed and not wanting to surprise anybody do except raise the VIX? - Jim Paulsen

    He comes from the 70s where the idea was the opposite.

    Every meeting the VIX goes up and then when the meeting's over it does a little better.
    Is it helpful in helping investors decide what's going to happen?

    Paulsen said it might be better watching the Fed's boss, ie What's going on in the economy. And then the next boss is the bond market. They're both saying the Fed better not overdo the tightening.
    Relatedly, Tony Pasquariello said. "The moment the Fed says 'We're done,' or 'What's priced into the script is as far as we'll go,' the market's going to rally back, and will ease financial conditions in so doing. And that's the kind of cat and mouse game between the Fed and financial markets."
  • Core inflation (CPI, PPI, PCE) has rolled over YoY for last 2 months running - Jim Paulsen

    The first time they've all rolled over at the same time since this began. The commodity thrust used to be all commodity markets, and now it's just energy, and now that's waning (natgas and crude both down). Wage inflation has clearly slowed.

    He still thinks we'll be more concerned about recession, but just less about inflation.

  • Jun, 2022
  • Jun 21, 2022
  • For the first time in months, bearish-take market experts just starting to be less bearish

    Just days ago everyone saying everything was so negative.

    In part because Fed for years, even through the Great Recession, was increasing money supply. Steadily. That saw a big jump of like 40% more in 2020 and then continued. But now the Fed is finally going the other way, so there will be less liquidity.

    Also, a lot of money has been lost in the stock market, which belonged to that excess that was printed.

    Larry Summers called for a 5% jobless rate over 5 years to ease inflation. Right now it's 3.6%. So a loss of 2.2m jobs, then going through that for 5 years.

  • Jun, 2022
  • Jun 19, 2022
  • Vacation travel becoming 'less discretionary' according to Marriott CEO

    "More people are going to take vacations regardless of what happens to the economy."
  • Jun, 2022
  • Jun 16, 2022
  • Pakistan minister asks people to cut Chai tea drinking by a few cups per day

    The government doesn't really have money to import more tea on loan.

    They imported $640m worth of tea in 2020, the biggest importer in the world.

    Forex reserves went from $16b to $10b in the last couple months.

    Some say it seems unlikely the plea will have any effect, since tea drinking is done at home and isn't easy to monitor. 220m people in the country. The leaders of the country are not expected to be cutting down themselves, some say.

    Pakistan is having long power cuts (up to 16 hours) in the energy shortage. All types of energy. 45 degree C temperatures these days.

    Beijing operates lots of power plants in Pakistan. Right now those plants are turned off because Pakistan hasn't paid the Chinese companies. The IMF asked but China refused to renegotiate the agreements.

    Pakistan had made LNG deals with Italy and Qatar, but those countries reportedly are selling their LNG to more lucrative markets (Europe) instead. The suppliers have to pay penalties (30% reportedly) but still they make profits by not delivering to Pakistan. Pakistan has to buy LNG at spot prices from the market.

    They could try to get an IMF bailout but to get one they would have to remove all fuel subsidies. So the government doesn't have many options, and is asking people to not consume energy.

  • Jun, 2022
  • Jun 15, 2022

  • Father's Day is second busiest t-shirt printing time after Christmas for Amazon
  • Jun, 2022
  • Jun 14, 2022
  • Prices are being talked about nonstop

    When someone tells you the price, you say, "What?"

    Americans say.
    Wages up but people aren't happy because they can't buy stuff affordably.
  • Jun, 2022
  • Jun 12, 2022
  • Tasty burger restaurants in place of McDonald's in Russia

    800 outlets.

    "Russians can do fast food just as well." - Some guy

  • Worry about reduced economic productivity and activity, not about inflation, it's been said
  • $180 barrel is where demand would start to stop, said Mark Rothman, so we're nowhere near that

  • Oil market, where relationships matter

    OPEC, Russia, Ukraine, Venezuela, Europe, Iran.

  • Jun, 2022
  • Jun 10, 2022
  • Kawasaki factory in Nebraska offering 9-2 shift at $19/hour

    Labor market very tight. Everyone is hiring.

    The shift is based around school hours, to try to get people who were not doing manufacturing before (mothers).
  • Bolivia inflation 1% for past year versus Latin America average of 10%

    The Boliviano is not fixed in exchange to the USD. Their exchange was established over 10 years ago when the authorities there injected dollars into the countries reserves. The money came from great wealth that came from nationalizing petroleum production (Bolivia still has a state monopoly in petrol and distributes it to the country, and this has totally absorbed the impact of changes in gas price). It reduced costs of imported products. Bolivia ALSO produces most of the products Bolivians consume.

    Bolivia also has certificates of exportation granted by government. When that product is not available in proper supply for the internal market at a price the government considers appropriate, the government can deny a certificate for exportation.

    For this low inflation, Bolivia is considered by some to have a lot of debt.

    Is it a disincentive to production in Bolivia? Does the State spend more than it brings in? Will the country just consume its reserves?

    The government isn't going to change policy. It says that would be to translate the burden of inflation onto the majority of the population.

    Bolivia is said to be the only Latin American country that is controlling inflation.

  • Docusign beat on revenues and missed on EPS

    Something that has worked over the past years but now doesn't seem to be enough, some say, and that investors now want to see actual profits.
  • QE and low interest rates have resulted in record debt levels for a lot of countries, where consumers, businesses and governments took advantage ... and may have become dependent on cheap debt. As rates rise, these parties will see hightened costs for their large debt loads.
  • Jun, 2022
  • Jun 09, 2022
  • For months now, everyday economy news has several experts saying recession is coming and there's no soft landing, and others saying recession is unlikely
  • Jun, 2022
  • Jun 08, 2022
  • US mortgage demands is at a 22-year low
  • Jun, 2022
  • Jun 02, 2022
  • Bitcoin is fluctuating a few thousand above and below $30k
  • People, including Boockvar, think inflation has probably topped out (although how much it will come down is another question)

    We're in an information gap right now. Earnings were flat. We don't have a Fed meeting for a couple weeks but we already know what they're going to do. Next catalyst is in July when we review Q2 results.

    Boockvar wrote Bill Dudley is kind of the truth serum man of the Fed.

  • May, 2022
  • May 31, 2022

  • 7 weeks straight of the week closing lower for markets, and then this week it was up a bit
  • Some say supply chain bottleneck loosening up

    ... part from perhaps less demand, perhaps from actual loosening.

    JPM reported LA ports are looser than previous months.

    BOA said on trucking that capacity is higher than previous months.

    Retailers are talking about double digit inventory gains, so some think they might now order less or not the same stuff. We might see store shelves full again and things going to the clearing isle.

    Core PCE price index has been sideways for 4 months (and down YoY).

    People looking at inventory to sales ratio. How quickly can retailers turn over what they have.

  • May, 2022
  • May 29, 2022
  • 70% of US consumers 'would rather wait for a new product than pay for it right now' - Kearney Consumer Inst.

    Beauty is doing well, as part of the things people haven't been able to buy much recently. Fancy dresses and suits at Macey's. Wardrobe refresh. Weddings.

    Down: streaming, fitness bikes, plant-based meat.

    Now consumers want to get out of the house. 8% bump expected in miles traveled this Memorial Day weekend.

  • May, 2022
  • May 28, 2022
  • US now going to have to 'decide between two policy mistakes' - El-Erian

    The US dollar is just too strong for the rest of the world.

    The cost of living crisis in the West is the risk of famine in commodity-producing countries. How much does a country like Egypt subsidize (probably most) and how much pass on to the consumer?

    UK imposed a Windfall Tax (to protect most vulnerable people in economy).
  • May, 2022
  • May 26, 2022
  • "I think we've seen enough wealth destruction that we are finally seeing demand destruction all over the economy, and the market people are picking up on that." - Josh Brown

  • May, 2022
  • May 25, 2022

  • The Chinese likened the tax cuts to 'fertilizer' applied directly to the 'roots of the economy.'

    The numbers are added to tax cuts already implemented this year.

  • May, 2022
  • May 24, 2022
  • This is where the market is the economy - Batnick

    "... because they're using their stock as currency to pay employees."

    "... in specific parts of the economy." - Josh Brown. In tech, not the housing market in Okl. Will be felt in housing, spending, and tax receipts in Cali.

    Snapchat's stock options paid to employees are now 40% underwater.

    Stock is down 75% from highs, down like 40% from IPO.
  • Coming into 2022 versus now, by WFC strategist

    We thought you needed multiple compression. You got that. We thought interest rates and especially real rates needed to normalize. You got that. We thought that the Fed had to get motion, whether it's related to the balance sheet or to raising rates. That's been happening. Now we have a 15 or 20% pullback depending on where you look in the market.

    Two last things we needed to see: We needed to see rates come down, and we needed to see some softening of the Fed rhetoric, which is what we seem to be seeing in the short term.

    We're not seeing indiscriminate selling as in the last few weeks.

  • Usually stocks and bonds don't go down together forever, because it's a self-correcting mechanism - Chris Harvey

    Stocks go down, you start to create more value. Bonds go down, and you have a discounting mechanism makes your terminal value higher and all of a sudden we find a bottom.

  • (notes:)

    New to us: a situation of high nominal growth. Nominal growth = real growth + inflation. Stagflation = the high nominal growth is absorbed by higher prices but output (production) doesn't keep up (low real growth).

    Labor productivity has been positive so far (output rose), but nominal spending was far greater.

    A reduction in nominal spending is the only viable solution, because it looks like productivity can't be raised much. Economies are approaching capacity constraints. Note: a simple raise in rates isn't necessarily 'tightening' unless it is relative to what is discounted and relative to economic conditions. Note: short-term interest rates.

    Inflation is increasingly entrenched and supplies and inventories are low.

    Stocks: Companies that are most liquidity-sensitive and longer-duration cash flow, have seen the biggest value effect.

    War in Ukraine: big effect on commodities (R a supplier). Normal short-term flight to quality (weeks or a month) and afterwards unfolding macro pressures typically dominate.

    Expect reinforced capex cycle (surge in demand). Lingering bottlenecks. Capexs to boost efficiency. Particularly industrials and materials (companies reshoring to US from Asia due to supplychain disruptions). Automation. Software and info processing equipment over past couple years.

    Governments' choice: tighten to control inflation and face a potential economic downturn, or don't tighten and allow inflation.

    Household balance sheets stronger (than 2018). Lots of cash in bank, appreciated home values and stocks. Poor people wealthier than past 60  years.

    Banks are very liquid. Money printing found its home there. Reallocating into loans.

  • New home sales fell 17% in US
  • Huge money debt and liquidity injected, internal conflict in US (populism), rising of new great powers - the three things right now, according to Ray Dalio

    Where are we in the monetary policy?

    One man's debts are another man's financial assets. So they won't be able to raise interest rates to a high enough level to provide a real return to investors. 3% or 4% won't be enough to compensate for the inflation rate.

    Paradigm shift. People believed everything that happened in the past 10 years, and then they get a surprise, and then they start to change.

    Do I think cash is a safe asset, or bonds are a safe asset? Am I getting a real return? There's gonna be a supply-demand balance. The Fed, individuals, foreigners, and the US gov (to fund its deficit) are all selling/going to sell. Going to produce a squeeze because so much money was put out.

    What's going to get you a real return? Real assets. Like the 70s.

    Everybody's wrong. Everybody wants everything to go up. They keep giving you money. They want you to buy everything. They hype it. The world is holding all these financial assets. You're going to have an environment of negative real returns.
  • May, 2022
  • May 20, 2022
  • Gas at $5 is not a problem, but gas at next month $5.50 then $6 etc. is a problem, because people say This is never going to stop and we have to cut spending

    So tightening quickly has another thing in its favor.

  • Crypto, and some stocks, within their niche

    So if you have the best crypto (or company), but there's a ton of crap cryptos and they're all going down, some to zero, your good one will go down too as a part of that. Part is news, part sentiment, part that the people who bought those bad ones also bought the good one and they sell them at the same time, bringing prices lower.
  • The very traits that would have allowed you to survive the crash in 2020 are the traits that would have killed you in the most recent regime change (out of tech etc into commodities and energy) - The Compound guys

    Nobody's in a rush now. It's not like 2020 and 2021 where everything went up every day (and had like 5% drops sometimes) and you couldn't even think straight, just saying 'I can't believe I'm not in this'.
  • Defaults on cars in US

    First time it's been in the news I've seen. Sub-prime car loans.

    Last couple years, car prices and used car prices went up, but there was tons of money from the Fed, so people kept buying things. Loans went up. A lot of borrowers don't have much for a downpayment, or have negative equity. But the car value of course depreciates, so if they were to sell a year or two later they wouldn't be able to pay off that loan.
    Those loans are owned lots by hedge funds pursuing higher return rates. You don't see a lot of banks jumping into that.
  • May, 2022
  • May 18, 2022
  • Dividends (secure-ish ones) might be the investment play of this year or the next couple years

    Can't rely on valuation expansion anymore. So it's just dividends and earnings. And from companies with good balance sheets to ensure the ability to do so for a while.

  • US markets drop between 3 and 5 % for the 3 markets

    So-called 'safe haven' stocks are not immune. Consumer staples like Walmart and Target are seeing slightly higher revenues (nominally, not factoring inflation) but much higher costs (labor, transport, supply chains), and they are not able to pass these costs on to the consumer any more.

    So all stocks went down today almost. Every sector.

    Customers are buying groceries but aren't buying hard goods where stores like Walmart have a slightly higher margin.

    Yes, wages are up, but not as much as inflation. The highest cost increases are food and energy, and that's funneling away spending that would otherwise go to more profitable areas of selling.

    But the US economy NEEDS lower demand in order to trend prices lower.
  • May, 2022
  • May 17, 2022
  • Corporations in US have low debt, high in cash

    The stock market is $35t (so companies could buy back like a 5th of their stock).
  • What affects stocks

    Josh Brown said it missed the most important thing: industry. The best company in the worst industry isn't going to work.

  • US in situation for older adults where their ability to retire is based on how they invested money since they were 20

    Versus social security in other countries.
  • May, 2022
  • May 14, 2022
  • China and decoupling from 'factory China'

    Said that China is indispensable to global supply.

    China makes way more stem graduates (now needed by others). So many production facilities (Japan also has quite a lot). Apple's supply chain. China wants foreign firms there (like Apple). Provinces compete for this business.

    Per capita disposable income is way up steadily in the last 10 or 15 years.

    "China plus one" strategy. Vietnam, India, Mexico, Indonesia, Malaysia. But no country can do what China does.

  • May, 2022
  • May 13, 2022
  • Saudi Aramco became biggest company in the world
  • May, 2022
  • May 12, 2022
  • Ruble collapsed by 60% last March when they invaded Ukraine, but is now the strongest performer of 2022 (a 2-year high of 64R/1USD)

    Spending of reserves, being an exporter of petrol, having gas buyers buy in Rubles, doubling interest rates and limiting capital flows, and talking about backing the Ruble with gold and other commodities are factors contributing to its rising valuation.

    Russia has energy, so that's not cramping their style like in some oil importing countries (price has been rising over the past year significantly). Russian consumer appears still strong.

    However, the future. The economy (GDP) is guessed it will shrink 10% in an upcoming recession. Financial sanctions take months or years to take effect, they're not immediate.

    The other currencies that have appreciated against the USD this year are the Brazilian Rial and (a lot) and the Mexican Peso (a little bit). All other currencies have depreciated against the USD this year, the most depreciation seen by Egypt's Pound, Argentine's Peso, Japanese Yen, Turkish Lire, and some other Eastern European money.

  • May, 2022
  • May 04, 2022
  • Questions about job seeking companies continues

    Job vacancy NUMBERS have like doubled. A huge spike in the graph.

    But people applying for jobs aren't getting even interviews.

    Some say it has to do with companies and PPP loans:

    "I’ve applied for 350 jobs as a graduating senior with a BS in economics and certifications in project management and barely have gotten any interviews. I’ve gotten 5 different scam posts though!

    "This is absolutely BS and is purely being used as justification for bailouts. The government is funding businesses to lie about their job numbers."

    Someone else:

    "IIRC some college professors had to send out upwards of 1000 applications to get interviews.

    "I imagine the problem now is a lot similar to dating websites; where everyone is looking for the best of the best, without realizing that those top candidates or jobs are either half scams or interviewing what they think will be a great person, only to wind up ghosted and the position left open because that top person they turned everyone else down for found something better.

    "Rather than picking good or even GREAT candidates, they just siphon out a ton of people on the assumption that the sheer volume of resumes they have means the cream of the crop will TOTALLY settle for them and not wind up somewhere else by the time they've sorted all the resumes and sent out responses to those top candidates."
  • May, 2022
  • May 03, 2022
  • "We still haven't felt that 'get me out at any price' type of trading, and while we are likely getting closer to a tradeable low, we don't think we are quite there yet... we continue to look for a sub-4k SPX, with colume based support coming in 3900-39050." - Doc on CNBC

  • Apr, 2022
  • Apr 29, 2022
  • Mortgage refinancing demand dropped 70% from a year ago
  • Some San Diego residents moved to Mexico to save money

    Brokers for this trade usually see investors and retirees buying in Mexico, but now it's young workers too. Some people also work remotely and can live on the waterfront for $200k - $700k (versus in the millions for SD) (or was he saying $200 - 700 per month rent?).

  • Indonesia banned export of palm oil

    ... because of local shortage. Prices for it are up 40%, and people protested.

    Indonesia does 1/3 of global vegetable oil exports. 30m tonnes exported by them. India imports half its vegetable oil from Indonesia, 13m tonnes (60% of that is palm oil, 25% soybean oil, 12% sunflower seed oil). (Malaysia does 32% of India's imports to Indonesia's 55%.) There will now be much more demand than supply. 20% rise in priced expected in India.

    Poorer countries depend more on cheaper cooking oils like palm oil.

  • Inflation since 1 year ago in US, by CNBC

  • Apr, 2022
  • Apr 28, 2022
  • Amazon $4b loss, quarterly report

    Stock down 10%.

    Amazon is particularly susceptible to 2 things that are wide trends: consumer spending and supply chains.

    Costs. 1.3m workers. All those expenses going up.

  • US GDP dropped 1.4%, in a surprise, first drop since 2020

    Pricing index up 8%. Highest since 1981.
    US importing way more than exporting. Inventory. Some downturns due to interest rates. Lots of distortions in metrics.

  • "If you have a $3m home that drops to $2.5, that person's gonna be OK. It's the person who bought the average $375k house that drops to $180k that can't refinance it, can't resell it, then can't afford a payment, and may lose his job." - I Allegedly (vlogger)

    Different from 2008 because they got rid of the liar loans and you really had to qualify for loans after that, but they're back now. The underwriting was much more difficult after 2008 (have to have income and a real downpayment). Back to unrealistic times right now.
  • "I don't know if we have a student loan problem, because it's only a problem if you have a debt that you can't pay." - I Allegdedly (vlogger)

  • Housing prices were up in March but sales down 8%. Consumer sentiment is lowering.

    The vlogger here, "These numbers, you don't really need to study them to know how bad these are, because lets face it, you see it when you go to the grocery store, when you purchase things, when you buy gas, you know exactly how you're getting mistreated as a far as inflation is concerned. That's happening to all of us right now."
  • Apr, 2022
  • Apr 26, 2022
  • Phoenix, AZ hottest property market for 33 months straight now

  • Averaging 1 massive crypto hack per week

    $Hundreds of millions often.

  • "The NASDAQ, not for most stocks but for the FANGS, Feb 24, the day Putin invaded. - Josh Brown

    The invasion drove up inflation for a lot of stuff, which put a top in for growth stocks.

  • "Apple is important to everything and everyone" - Josh Brown

    Not just the S&P and people who love tech, but also Berkshire. "Berkshire probably technically can't withstand Apple breaking down either."

  • Is single family home rentals 'the future'?
  • "We're in the only business in the global macro economy where customers hate bargains." - Rob Arnott on value stocks versus tech growth stocks

    20% up and everyone wants to buy, 20% down and everything avoids it, saying There must be something wrong with it.
    Does this mean the market is one of the easiest things to manipulate?
  • Tech stocks are not on discount, they are the bursting of a tech bubble, says Rob Arnott

    Like 2000.
  • "Roughly 1/3 of inflation is sheltered. Home ownership or renting, or hotels and motels" - Rob Arnott

    Hotels and Motels up over 20% last year. Home ownership (which is much bigger) is not counted in CPI as the value of a home) up 32% in the last 2 years. What the BLS does is ask What would the home rent for? They don't know, they just ask the home owners what they think it would rent for.

    We're going to see an illusion that inflation is subsiding in the coming months because those months are replacing big inflation months from 1 year ago, followed by an illusion inflation is breaking out in the summer months because those months will replace low-inflation months.
  • About CEOs of big tech companies, "They're successful because they've operated well near-term and they've had great long-term vision. If you've got great long-term vision there's no way you're reacting to a bear market. We're gonna have them every 5 years." - Mark Mahaney

    "Don't let the markets determine what your corporate strategy is. Maybe your financial strategy but not your corporate strategy."

    Maheney called Musk's purchase timing genius, "Step in with a big premium offer when the stock had been dramatically traded off as part of a bear market in tech stocks."
  • Does Twitter becoming private make it more competitive versus FB, Snap, etc?

    Mark Mahaney of Evercore: "I think Musk is doing something that a lot of investors should do which is that there's a lot of really good tech assets out there that are at very low prices. Yes, Elon Musk offered a 50% premium but it was on a stock that was off 50% since it's highs."

  • Mexico nationalized lithium

    "Elon Musk's worst nightmare."

  • Apr, 2022
  • Apr 25, 2022
  • India will be selling wheat to Egypt, it looks like

    ... instead of Russia and Ukraine, which formerly accounted for 80% of Egypt's wheat imports. They have a shortage, and have been importing from France, Romania, USA, and others. Prices have risen from $380 to $500 per ton.

    Egypt is the largest or second largest importer (12 of its 21m tonnes per year consumption) of wheat. India is one of the largest producers, and while it hasn't been big in exporting it, it seems India is willing to do so, although it seems unlikely India would be willing to produce and export THAT much. Right now India produces 110m tonnes and consumes 105m.

    They're meeting this week in Dubai. One thing they're doing (some Egyptian experts) is some tests to see what the quality of Indian wheat is, and how adequate it is for the Egyptian market. They found it is good enough, but commercial discussions which will come later will decide how much and at what price.

    Wheat is a strategic commodity, and every country has its own standards for wheat. Because it is strategic, Egypt is really considering whether to add India to its list of strategic importers of the food.

    Because Egypt is an important of wheat, so it can affect international prices of wheat. Not only a price taker but a price setter. That gives them the ability to have communications with several countries that export wheat, and to have some input on that trade of wheat on an international level. Exporters must respond differently when a big importer such as Egypt enters the market, compared with a smaller importer. (Big exporters also are price setters.)

  • CAR unanimously adopted Bitcoin as legal tender

    The first African country to do so.

  • 7 years growing. Despite pandemic, recession, whatever.

    Over $2t in 2021 for the first time.

    The biggest arms companies are all in the US except one in the UK.


  • "The easiest of the hard things is crude oil." - Dan Yergin

    Because you can get it from other places. The hardest thing is natural gas.

  • Asia markets continue down

    Lockdowns and lockdown fears. More cases in Shanghai lockdown, now in it's fourth week. Beijing might be next. 

  • "When the dollar is stronger, things break in other parts of the world." - Alicia Levine

    "I think we need to start thinking about what happens to the real economy as a result of the Fed actions and marching forward quickly, and what happens to financial assets. ... and I think it's quite plausible that things could break in the financial asset market globally. Think about what has happened to the Yen, the Yuan, the Euro and the Pound in the last 3 months. A very strong dollar does not bode well for the rest of the world. For multinationals and earnings.

    "I think we're seeing the beginning of the dislocation from the Fed's policy."

    (She doesn't see a recession in the US in the next year, but said that doesn't mean the economy's going to take it all that well.)
  • "If you look at the last two years, we had extraordinary rebound off the lows. You go back even further, 3 years, 5, 10. You go all the way back 13 years to the global financial crisis, and the challenge is that all of that is really a sugar high. All of those gains are really devaluation of the currency." - Mark Yusko

    He said that gold is money (the only thing that is). When you denominate in gold, we're flat since 1996. It's really currency devaluation. Excess liquidity by banks.
  • Apr, 2022
  • Apr 21, 2022
  • NFLX down like 40% in a day after reporting losing 200k customers

    It expects to lose 2m this year. It has like 220m though.

    Reasons: saturation in US (has like 90% of that market), competition with other streaming services (like Disney which is what anyone with kids maybe pays for). Cutting off Russia cost around 700m subscribers. Musk said wokeness was making shows unwatchable.

    Netflix is considering running ads (doesn't now) and not allowing password sharing.

  • Apr, 2022
  • Apr 20, 2022

  • Expectation to keep a level of diversity. At the start of last year they had a dozen black partners among their 400 partners globally, and 5 have left in the last year.

    Questions about the pipeline (black execs to chose from).

    A lot of these black execs who are leaving, they were hired in 2019 or 2020. That's leaving significantly faster than the average tenure of a Goldman partner.
  • Apr, 2022
  • Apr 18, 2022
  • $828b in US taxes to be paid by Americans, plus $125b in crypto taxes, approximated - Tom Lee and Fundstrat

    Fundstrat looked into years where markets were strong, and the weeks before filing (April 18 this year, not October) markets were weak.

    A lot of assets are bad financial hedges, Lee said. Americans own $55t worth of bonds. There might be a panic out of bonds. Lee thinks into income generating real assets and TINA. So people will sell bonds to buy real assets but not a lot of stocks.

    His base case is still that inflation cools.
  • Apr, 2022
  • Apr 16, 2022
  • Bretton Woods 3 - New world monetary order

    Being talked about by some as having started when Russia invaded Ukraine, and the US (and West) blocked Russia's access to it's money with economic sanctions. Written about for everyone by Zoltan Pozsar, strategist at Credit Suisse.

    The first Bretton Woods (the only formal actual agreement) was in 1944 (700 delegates from 44 allied nations met in New Hampshire for 3 weeks in July, establishing the IMF and a part of what would later be the World Bank). The British Pound was decreasing in value. The US dollar became the world standard. It was pegged to gold. It became the most common reserve currency (when a country exports more than it imports, it will end up holding foreign currency, so it has to decide which foreign currency to hold. Most picked US dollar). The second (informal but considered to be) "Bretton Woods" happened when in 1971 (but Bretton Woods I was considered OVER by 1973) Nixon decided the US was going off US-gold convertibility (after the US decoupled many fixed currencies followed, and currencies were allowed to float relative to each other - fiat currency. Price stability was the job of the central bank, controlling inflation, keeping it low, stable and predictable. (US buying a lot of Chinese goods and China holding US reserve currency was a hallmark of BW2. This Chinese holding of USD peaked in 2014 but is still up there). Dollar hegemony.

    "Bretton Woods 3:" The West imposed severe sanctions on Russia this year, and Russia therefore had access to only $300b of its $600b of foreign reserves. The result is that central banks of every country are now concerned their foreign reserves can be confiscated this way if their actions fall foul of US policy.

    Zoltan Pozsar says the core of our portfolios (and also the monetary system) will be in commodities in the future, and that central banks might have to bail out commodity traders (which seems to people an odd thing to say).

    Zoltan drew an analogy between subprime assets 2008 which triggered the global financial crisis AND Russian commodities, which he considers to be sub prime. Prime assets are non-Russian commodities, which are kind of like treasuries in 2008, the safe haven assets everyone wanted to protect them from the equity storm. Urals (Russian) crude oil currently trades $30 (huge difference) below the price of Brent (delivered in the North Sea).

    China, says Zoltan, will play a large role in bringing those subprime commodities (Russian ones) and prime commodities (non-Russian ones). Because China has lots of reserves and it also has not imposed sanctions on Russia.

    Zoltan sees a multi-polar world emerging, where we're no longer dominated by US dollar trading. We'll use Renminbi when trading with China, Rubles when trading with Russia. Ie weaker dollar and stronger Renminbi. If China wants to do this (bring R subprime and non-R prime commodities back into line, it can: sell treasuries, which would push up the yield in the US and with that money buy Russian commodities. Use some of that money to lease US vessels (raising shipping costs and thereby inflation in the West) and use ships to store commodities if it runs out of storage space in China. Another way China could do this thing is if the Chinese government prints renminbi and use that to buy commodities from Russia. This would also push up US yields (and therefore inflation because its still a supply squeeze) because they wouldn't have to store any dollars in US treasuries, because a big buyer of US treasuries would suddenly disappear.

    If this happened, there would be not just the US dollar "eurodollar" (nothing to do with Euros) market but also a renminbi market. End of US dollar hegemony.

    Either of these two options China has, Zoltan says, will cause higher inflation in the West, higher yet US treasury yields, and higher shipping costs (also inflationary). Another result is commoditiy volatility, rising up fast, crashing down (remember the London nickel exchange crash day written about on this blog?) Commodity traders could fail and become bankrupt. Central clearing counterparties could also fail, leading to government bailouts.

    And, as Larry Fink has talked about, the end of globalization because of resource nationalism (as a defensive measure), stockpiling of commodities, and rethinking (localizing and multiplying) supply chains.

  • Apr, 2022
  • Apr 13, 2022
  • Supply chains

    Things seem a bit worse now with China.

    We don't know when supply chains are coming back.
  • Food insecurity

    We don't yet know who will make up the 20 or 30% global wheat production which Ukraine usually does.
  • Comparative economics in 2022, amid Ukraine war, pandemic restrictions, global supply chain issues, etc.

    If you're an energy producer or food producer (commodities), you're doing well. If you're an importer you're suffering.

    Turkey has to import energy. (It also regularly receives 4m Russian tourists every year.) Egypt has to import food.

    US politicians about other countries 'making a decision about where they are in this crisis.' China: Washington is poised to take a hard position towards China depending on the decisions they make. India. US wants both to oppose Russia.
  • Apr, 2022
  • Apr 12, 2022
  • Over the past half century, gas stations have gone from gas only, to gas plus service (checking fluids), to self-serve, to 'smokes and cokes,' to having their own snack items (which actually have brand loyalty, unlike gas stations), to being like grocery stores

    The younger generation is also reportedly more brand loyal to shops like these.
    Gas sale itself is not very profitable (7% markup). Food makes up like 70% of profits now, reportedly.