Wednesday, September 28, 2011
A Gentleman's Wager:
TIPS prices decline in November. November ends as red month for this late-money thesis...UNLESS Ben launches another bologna rocket at the market.
China Beach(ed)?
The recent copper weakness has sent many clamoring as the red metal is a heavily-watched barometer economic health. Who am I to disagree? I'll add a layer of complexity to the copper weakness - mainly as it relates to Chinese business debts.
An economic vignette: Many Chinese businesses have been using physical copper as collateral for their debts. Recent yuan appreciation (this is what you wanted Timmy G., always remember this) has already stressed many Chinese manufacturers; creating fissures in their mercantilist fantasies. Now, you "peanut-butter" in a sharp fall in (likely levered to begin with) collateral values (leverage^2), and you see a scenario of P.A.I.N. for innumerable mainland businesses.
A contraction in collateral values is a very serious occurrence, especially in times of jittery economics. For those that need enlightening: collateral value contractions are a key component of credit crises. Collateral value erosion is like the guy that is always hanging out around the murder scenes...he's there for a reason, folks...because he's actually the killer.
Getting factual economic information out of China is tough (ask Hugh Hendry), so you'll have to handicap every shred of news you hear (or don't hear) about the nation. I'm lucky, as I work with many Chinese nationals...so I can get a better feel for what's going on behind the facade of Command Economy Propaganda. I'll be watching, listening, waiting.
I think the yuan appreciation rate is about to slow down/reverse (much to the chagrin of our Treasury Secretary). Near-term price target on the CNY/USD of 6.44. What you can expect to hear: lots of China scapegoating from the US followed by "unofficial" ; ) retorts in the Chinese financial media.
An economic vignette: Many Chinese businesses have been using physical copper as collateral for their debts. Recent yuan appreciation (this is what you wanted Timmy G., always remember this) has already stressed many Chinese manufacturers; creating fissures in their mercantilist fantasies. Now, you "peanut-butter" in a sharp fall in (likely levered to begin with) collateral values (leverage^2), and you see a scenario of P.A.I.N. for innumerable mainland businesses.
A contraction in collateral values is a very serious occurrence, especially in times of jittery economics. For those that need enlightening: collateral value contractions are a key component of credit crises. Collateral value erosion is like the guy that is always hanging out around the murder scenes...he's there for a reason, folks...because he's actually the killer.
Getting factual economic information out of China is tough (ask Hugh Hendry), so you'll have to handicap every shred of news you hear (or don't hear) about the nation. I'm lucky, as I work with many Chinese nationals...so I can get a better feel for what's going on behind the facade of Command Economy Propaganda. I'll be watching, listening, waiting.
I think the yuan appreciation rate is about to slow down/reverse (much to the chagrin of our Treasury Secretary). Near-term price target on the CNY/USD of 6.44. What you can expect to hear: lots of China scapegoating from the US followed by "unofficial" ; ) retorts in the Chinese financial media.
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| Mainland China CSI Equity Index - Source: Bloomberg |
Wednesday, September 21, 2011
Temporal Insomnolence
From WolframAlpha's database:
It is hard to sleep when the tide in your affairs is lapping at your feet.
Sunday, September 11, 2011
Multi-Scale Corn Futures Probabilities
Here's a tasty graphic from some recent corn futures analysis:
Might we expect some corn weakness over the next few weeks?
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