Showing posts from June, 2016

If The Data Had Agreed

Basically if the data had agreed...
When the data does not agree you get the below...

Despite Fed optimism for near-term improvement, the U.S. economy is expected to continue to alternate between “moderate” and “slow” activity levels, failing to meet even the Fed’s new, lower forecast of 2% growth in 2016, with lackluster price pressures well below the Committee’s longer-term objective of 2%.  Furthermore, with the debate over U.K. membership in the EU heating up, a near-term resolution on either side is unlikely, resulting in an overhang of “global risks.”  While the Fed has seemingly redirected their focus to September, swift improvement in the domestic economy is unlikely, making it difficult for the Fed to justify a second-round rate increase in a little more than two months.  Lingering “uncertainties” both domestic and international could further delay a second hike until the end of the year or beyond. - Stifel

Housing Strikes Back

Housing starts fell in May and multi-family construction housing dropped. Single family homes went up. Housing consisted of a near .06% of  Q1 GDP - which is a big deal to some.  The summer is here (sort of ) and that means the hope of ravenous home sales.
Fitch: In the Midst of a Multiyear US Housing Recovery 

"Challenges remain, including restrictive credit qualification standards and narrowing affordability. Various housing and related statistics bottomed in early to mid-2009. Since then, for a time, the on-and-off, then on-again nature of the federal housing credit spurred, or at least pulled forward, primarily entry-level buyer housing demand. With the US economy moving from recession to expansion in third-quarter 2009, plus very attractive housing affordability and government incentives, housing was jump-started. However, faltering consumer confidence, among other issues, had largely restrained the recovery. New home sales and single-family starts retested the bottom durin…

Hotel Industry Disruption

You can ask my wife, I always wondered what went on with hotels and unused rooms. For years we lived in a major business district bespotted with hotels. Of course when came around that was a good enough answer for me, but then came AirBnB, and now AirBnB is worth more than most hotel chains despite being a private company, and holding no real estate. That is a major disruption. However, there is more ahead. Hotels are at times cumbersome real estate holdings, and that costs money. They are also service based, and that takes employees. Those perceived margins get thinner by the moment. See the link below for a more in depth look into the hotel industry shakeup.


How Does An EU Exit Work?

FX Swaps Last Week Cenbanks

The Federal Reserve provided $6 million of liquidity to foreign central banks in the latest week via its swap lines for foreign central banks, the New York Fed said on Thursday. The European Central Bank swapped $5 million with a term of 7 days and a rate of 0.87 percent. The Bank of Japan swapped $1 million with a term of 7 days and a rate of 0.85 percent. The Federal Reserve has established swap arrangements with the Bank of Canada, the Bank of England, the European Central Bank, the Swiss National Bank, and the Bank of Japan in an effort to respond to the reemergence of strains in short-term funding markets in Europe. - RTRS

Korea's Implied Volatility Index

Korea's Implied Volatility Index June 08 - June 14, 2016 -
{AKA, What A Weekend}

Link to published image

The U.K. & Swiss Have A Lot In Common

- Both have somewhat tyrannical referendums on a regular basis
- Both are financial hubs, filled with economists who are worried about Brexit (UK) and the Swiss, who are worried about upsetting 100* agreements with the EU securing the (unsecure) special status of Switzerland
- Both worry about tax on trade from losing access to the single market 

Imagine of Schengen Area

* I seriously think it is over 100 agreements, treaties and special clauses

GBPUSD Two Charts


Silver Spot Price w/ Dow Jones Industrial Average

Not good. Maybe an uptick is occurring, but we need a serious uptick on silver. Many promote the industrial benefit of silver but correlation tends to lag on the alpha side. 

Oil Volatility Still Going Strong

Why The Demise of Gawker Works (Good For The Future)

Simply put, Gawker is not the New York Times, neither is the local news.
Gawker, local news, and blogs need to be held accountable for disrupting the standards of journalism and for endorsing mafia-like character assassination behavior. This is very similar to the news hacking scandal in London a few years back. Media must allow privacy and must adhere to a code of human ethics.

Lotte To Shelve $4.5B IPO

Lotte Group indicated it will shelve what may have been a $4.5 billion initial public offering for its hotel unit, the world’s biggest so far this year, after widening investigations pushed the South Korean conglomerate deeper into crisis.- BBERG

2016 GOP Race Will Be A Capital Waste

If you value your $$$...The current won't make the fundraising hurdle and you can't get those dollars back folks. There is literally NO way. In fact, the current runner should consider lending himself his own money. Americans need not give in this cycle. Put your money into the economy.CNN Park City, Utah (CNN) Republican fund-raisers are beginning to fret that Donald Trump does not comprehend the enormity of the challenge before him, warning that if he fails to execute the basic tasks of fund-raising during a critical six-week stretch...Romney retreat puts spotlight on Trump's fund-raising problem in critical stretch

Goodbye Tom Perkins

A legend of venture capital has passed.

I will remind myself to not make comments in old age that are so racy, but Perkins was his own person. 
It is too bad I will not be able to meet him, but I am fortune he was here and achieved what he achieved. He is perhaps the first legend of venture capital.
Thomas J. Perkins, Pioneering Venture Capitalist in Silicon Valley, Dies at 84

VW Korea Fraud

VW Korea what a terrible fraud against the wonderful and ancient environment of South Korea

Unemployment - From DB Research

Research from Torsten Sløk, Ph.D., Economist, Deutsche Bank Securities --- I continue to get a lot of questions about how to interpret Friday’s employment report. One interpretation is that the economy is slowing and therefore the Fed will not hike anytime soon. The problem with this story is that there are no good reasons why the economy should be experiencing a slowdown now. If anything, the turbulence in markets in January and February is now further away and companies should feel more comfortable and increase hiring. This is the pattern we have seen for US consumers; as we have moved further away from January and February consumers have felt better and consumer spending growth has been accelerating. Another interpretation of the employment report is that the economy is very close to full employment. At full employment job growth will begin to slow because there are fewer qualified workers available to take jobs. And if there are fewer qualified workers available then wages should…

Great Recession Caused By Fed Mistakes

The housing bubble in mid-late 2008 (NBER lists the beginning at 12/2007) that is often blamed for the Great Recession (GR) was in fact not the main cause of the GR. In 2006 (April 2006) housing national averages began to fall.  Many monetary economists blame the Fed for inaction. Austrailia had a similar amount of circumstance but instead of hitting a brick wall they slid into moderation.

An Unneccesary Merger Between Corporate Goons - AB InBev + SABMiller

Between 2005 - 2015 the beverage goons were asleep at the switch. But 2016 is a bad time to start a craft brewery. The goons are awake and they are thinking the way goons think, and our government needs to block this merger.
Valuations will be suppressed after this deal wraps - if it wraps.
Does anyone see a massive issue with this? Craft brew will be squeezed out and these two groups will have a global monopoly. What is my issue with this? For starters it is "just" beer. You can make beer in the bath tub, and what was once attractive (Stella, Woodchuck, Ballast Point, etc.) is now owned by corporate goons. Mega-corps cannot make craft products. Part of craft is the love of the craft, not the lust of the money behind it. Part of America is dying. These goons love destroying ideas and innovation for the benefit of their corporate jets, sponsorship of sporting events and buying private vineyards that their third wives name "Chantavia" or maybe something more terribl…

Uber, Not So Uber

I have been rolling my investor eyes at Uber for a while now. That valuation - what are they thinking??
Regardless, in order to discover the bloated valuation on public markets, Uber could list on global major exchanges (India, UK, Korea, China) and that would merit the type of valuation they need. 
RTRS - Uber raises $3.5 billion from Saudi Arabia's sovereign wealth fund.