Saturday, May 3, 2014
So I was going to post more news, but then I saw one of my most popular posts today is an old one of Mila Kunis in her underpanties.
So let's not fight it.
Here's Mila Kunis in her underpanties:
Here's some stuff I came across last night.
New Deal Demoncrat - April jobs report was a blowout. Important comment:
This was a blowout report by the standards of the last 7 years. This would not be seen as a blowout by any standards prior to 2000, however.If we're into a secular bull market in the US, then we'll still progress to pre-2000 jobs levels over the next few years.
Calculated Risk - comments on the April employment report. Overall, it was solid. So we're not at a market top.
New Deal Demoncrat - historical recoveries for high-paid vs low-paid jobs. Good point: you'd expect low-paid jobs to get added first, and higher-paid jobs to come back later. It's a matter of what an employer is willing to commit to, right? Shit jobs are easy to commit to, because you can treat the new worker like shit. I know that in engineering the tendency is to not add to the labour force until the workers you have are past their breaking point; after all, you're usually adding permanent staff, not telling a guy "we can use you for 6 months, then we'll see". So it'll be interesting to see how NDD investigates this topic.
IKN - they're still selling GLD. I guess if there's only 786 tons left, then you can be happy that what's left is really a drop in the bucket compared to Asian gold demand. So more selling really doesn't mean much. Because, as I've said a million times, Whitey's not important to the gold market.
der Spargel - Putin's not post-communist, he's post-fascist. I dunno why Spargel needs to say this, because it's damn obvious to me Pooty-Poot's always been a fascist. Maybe they feel they need to remind Germans that fascism is bad? Maybe German leadership needs to be reminded that it's evil to collaborate with fascists, the way that the German leadership still wants to collaborate with Russia despite the blatant proof that Russia is now intentionally an enemy of NATO?
Friday, May 2, 2014
Yeah, I've seen the spike in gold, figured it's only going up because the Russians have finally decided to march their army in and exterminate the Ukrainians or something. I'm not bothering to check the news.
But silver's going up too, and this is interesting:
It's turning into a bit of a negation of silver's break of support.
I dunno if it means anything, but it is kind of interesting.
Are gold miners and gold supposed to do well in the summer period? I know May is usually a vaguely positive month for gold, but the press just finished telling us that Akshaya Tritiya buying is way down because of fears of a monsoon failure.
Oh well. Read into this chart what you will. I'll wait to see a trend before getting involved. Again, like I said, it might just be a temporary pop in gold due to imminent Russian war crimes.
A clever swarthy English fund manager gentleman (whose name rhymes with "Flichael Flaoul") was pointing out a few weeks ago that the $VIX-$VXN spread had been widening, which he said was an indication that markets were returning to normalcy from the tech hype of the past few years.
His reasoning was that people should have been paying a premium for volatility protection on the Q, because its stocks are more full of bullshit than what you find in the broader US market. The equality between $VIX and $VXN that we'd been seeing was an indication that people had been too willing to buy bullshit the past few years.
$VXN had been creeping steadily up since January, and the peak was right around the day that people had to finish selling to pay capital gains taxes. What's been happening since then?
The spread has dropped to 3.7 points, from the 5 we saw in April selling season. $VXN seems to have just today bounced upward off an upward-trending support line, though it's still too close to be meaningful either way. $VIX also looks too low for buying to be interesting.
I know nothing about $VIX-$VXN spread as an indicator, because I didn't start watching this market til after it stopped being normal. But from what I gathered from "Flichael", the spread should still be wider than this.
Of course low $VIX today doesn't mean it pops higher tomorrow... a slow accumulation of the market like last fall can make $VIX slowly drift downward for months, right?
I just thought it was something worth looking up, and then something worth sharing.
Vixxy Boots is 30 years old on May 4th. In celebration, here's a bunch of videos, starting from when she still sang for Dead Disco:
You can tell that she wrote the chorus. Or at least I can. Also, she looks great with brown hair.
Here she is being interviewed about her Tenori-ON, which is neat because I have a D2 and an MC303 which are also sequencers and we could make fantastic music together Victoria:
Here she is talking about records and synths:
Not surprising she likes Italodisco, considering I do too, and my italo basslines are dead wicked, and she should come over to Canada to marry me right now and we will make electronic music together forever.
And I also have a Waldorf Micro-Q rack, Victoria. Yeah, I know you're not into modelling synths, but it is a freak-ass for drum sounds - it literally punches right down to DC. Normal laws of audio don't apply inside a Micro-Q. Please be mine! Together we can pulverize clubs worldwide with the electronic throb of our passion and shake apart all those puny 1000W sound systems that are too weak for our love.
Here she is covering Hot Chip in her bedroom, which is unfortunate because it's not in my bedroom:
Here she is again at home, with an early video demo of her song "Stuck on Repeat", from before she became famous and realized how hollow it all is when you don't have someone there to love you the way I do Victoria:
Here's her video for "Earthquake", which seems to be about some guy who was mean to her, which I'll never be if only she'd be mine because to me she's a beautiful flower, a musical genius, and a sweet loveable kitten:
And here's a nonvideo for "Motorway", which is my favourite song, about her getting in a car and driving the hell away from Dalston (for fuck's sake, Dalston?) to find a new life with me in Canada (at some point she crosses the Atlantic Ocean, but that part's left out of the song to keep it our little secret):
In summary, happy birthday Little Boots! Thirty might seem old, but it could be the start of a beautiful new life for you if only you give me a chance! You're a sweetheart and we need to get in touch. I'll let you touch my copy of Legion of Green Men's Time Tunnel EP.
Thursday, May 1, 2014
Some more stuff:
Bespoke - F-150 sales best since 2006. So construction must think things are about to improve. So sell! Sell! OMG the US is going to crash!
Calculated Risk - April ISM increased to 54.9. Not interested, noisy dataset, ignore. However, this bit just begged for a sarcastic comment au moi:
"Comments from the panel generally remain positive; however, some expressed concern about international economic and political issues potentially impacting demand."For the love of a chocolate-covered Christ on a popsicle stick, swathed in tempting nougat and covered in crunchy peanut clusters (may contain peanuts)! "We are concerned about manufacturing because of the stuff we're hearing in the news about Ukraine"?!? If this is the best looming catastrophe that these clowns can dig up, then buy the frickin' S&P 500 and go away for ten years.
Ritholtz - demise of the trickle-down delusion. Ritholtz's commentary on Piketty. Quote:
The book has dominated the media like no other work of economics since the writings of Milton Friedman or even John Maynard Keynes. I won’t spend too much space recounting the reviews, but suffice it to say they have been spectacular. The book has so dominated the economic debate, that it is hard to compare it to anything in recent memory.I really should start up an Amazon wishlist for this blog, like the girls on tumblr whose photo streams I like to follow. Then you guys, my precious readers, could buy interesting books for me, the way I buy intriguing pieces of clothing and accessories for attractive teens in the UK to take pics of themselves wearing. Cos despite the fact that I hold very little respect for economists, I'm really starting to want to read this book.
The data-driven demolition of trickle-down economics has the Ayn Rand crowd panicked. But what I find so fascinating about this debate (having not yet read the book, though I plan to) is the inability of the economic right wing to respond. Thus far they have been rendered impotent, unable to construct an intelligent counterargument. The strongest response so far -- and I am not making this up -- has been to give the book a single-star rating on Amazon.com's website.
Further to the previous: so I read Krugman's article on this topic, went and had a smoke, and came up with sort of a Marxist epiphany.
Maybe the trend in real rates towards zero is an artefact of the declining income (and power) of the working class?
After all, if you have a country where there's one multi-billionaire named Thurston, and a thousand working-class bums all named Billy-Bob, how will Thurston make an income on his wealth?
OK, he opens up a bank, but the only people he can lend to are Billy-Bobs. He can rent out slum apartments to Billy-Bobs. He can start up manufacturing companies, hire Billy-Bobs as workers and sell goods to Billy-Bobs.
In this case, increasing the wealth of the poor (by paying higher wages) will increase the return Thurston can earn on his capital: they can pay higher rent, they can buy more goods, they can take out car loans. There's increasing demand for Thurston's capital, so he can charge a higher interest rate.
If Thurston instead crushes Billy-Bob's union, cuts his wages and destroys his pension, now Billy-Bobs demand less capital; they bunk up three to an apartment so Thurston makes less in rent on that physical capital, they buy fewer goods so Thurston sees lower return on his productive capital, and they no longer can support loans so Thurston sees no more demand for investment capital.
Thus the return on Thurston's capital tends toward zero.
So maybe the trend in real rates to zero is simply the result of the rentier class' victory in a war against labour? Maybe it'd be very fucking easy to reverse the trend, provide a higher return for the rentiers, and avoid Larry Summers' supposed secular stagnation? Maybe all you have to do is restore labour's ability to take a higher share of the return on production?
After all, who else is Thurston supposed to lend to? The government?
So I was reading a review at the Guardian on the new book by Piketty, which seems very interesting though probably not something I'd bother to sit down and read.
But here was an interesting sentence from that article:
Piketty's argument is that, in an economy where the rate of return on capital outstrips the rate of growth, inherited wealth will always grow faster than earned wealth.Thus eventually the rentier class ends up owning the entire country. (I guess in an ideal world you should attack that process by increasing the power of the working class through unionization, but it's not as if the rentier class will ever acquiesce to that and it's not as if the working class in general has that much Marxist class-consciousness anymore.)
Anyway, the point though was I was intrigued with the inequation given in the sentence above.
Because Gavyn Davies has a post up at FT about the OECD's report on the secular flattening of interest rates. This is something that (I dunno for sure) Krugman's been on about, and Larry Summers has apparently mumbled about too though nobody should care what that arrogant clown says.
The interesting thing there was this chart:
And so you get certain people saying the long secular drop in bond yields is about to reverse, yadda yadda.
But that's not happening yet, and cos I like simplistic supply-demand theories I kinda have a thing for the synthesis of Bernanke's and Krugman's arguments that the trend to zero is a supply-demand problem; I dunno whether it's due to an excess in savings, or a lack of loan supply, but I guess if you have a supply-demand inequality, that should drive movement in real rates, no?
So here's what I think is the interesting idea that I'd like to think more about.
#1, maybe the rentier class has now confiscated so much wealth that they no longer have sufficient places to extract guaranteed rents? Thus the return on rent approaches zero, and you're not going to see that change, because it's not as if it makes much more sense to transfer wealth into stocks already valued at 18x. Meaning bond yields never go up from here, because there's too much money that will always want to collect rent.
#2, if the real return on capital (~0%) is now much less than global growth (~4% or something?), does that now mean that Piketty's inherited wealth will now begin to diminish relative to earned wealth?
Or maybe the smarter thing for that wealth to do would be to get out of passive renting and into active investment in productive endeavour, now that growth is above real rates?
What happens when growth is above real rates, anyway?
I don't have any answers, I've just found that I really like to think about this topic, and that it really is an indication that something is different this time and only a fool would stick to old 20th-century models of how economies work when we're obviously down the rabbit hole today.
Just quit your pussy whining and buy SPY:
BI - only two things make the stock market go down, and overvaluation isn't one of them. So says David Rosenberg, who seems to be trying to make up for years of being a goldbug clown. Quote:
[...]in a recent research note, Gluskin Sheff's David Rosenberg notes that stocks don't fall just because they've gone up a lot.And we get this chart:
"We go into fundamental bear markets either when the Fed overtightens, when the economy heads into recession, or both," he said.
Rosenberg presented this chart showing 12-month returns in the S&P 500 since 1969. As you can see, downturns typically coincide with recessions (shaded area).
It's particularly interesting to see that 30%+ rallies over 12-month periods — like what we saw last year — happen pretty regularly.
where you see that overtightening and recession are the only two ways to get negative returns out of a market. And actually, overtightening causes fast recessions, so really there's only one thing. So either you listen to someone who's learned what makes economies run and pays attention to real economic data, or you read some clown who's never had a real job who pulls a new bear case out of his ass every week. Your choice.
Liz Ann Sonders - Fed does as expected and tapers again. Quote:
[...] remember, GDP is very backward-looking, with the quarter having ended a full month ago. Since then the economic data has been decidedly stronger; including other economic releases today. In addition, there were even some positives within the GDP report. Consumer spending, which is about two-thirds of the US economy, remained strong at 3%, with the Fed's statement noting, "Household spending appears to be rising more quickly." There was notable weakness in non-residential and residential investment—certainly weather-dampened; but it bears watching. Net exports were also weak; but likely a "payback" from the exceptionally strong fourth quarter. Inventories were also a drag on growth. It's rare for both trade and inventories to be a drag on growth; suggesting a coming rebound. Finally, government drag is easing this year relative to the past year, when it hit a cyclical peak.You can listen to some guy who's never had a real job in his life, or you can listen to a professional, or you can listen to a professional who's also a hot babe. Your choice.
We had strong economic releases today to accompany the weaker GDP report. The Chicago PMI came out much stronger than expected (although the smaller Milwaukee index was weaker), and the ADP employment report was also strong and above expectations. In fact, the totality of economic releases since the end of the first quarter have led economists to raise their forecasts for second quarter real GDP; in a few cases to as high as 4%.
Bespoke - no joy in investorville. AAII is profoundly negative despite the broader US market only being a stone's throw from its last peak. If retail is negative with no fundamental reason, do you sell? Or do you buy?
Wednesday, April 30, 2014
So since the US is quite obviously rolling over into another horrible crash as predicted by geniuses like Peter Schiff and Raoul Pal, the rest of the world must be crashing too, right?
Here's CIE, the Canadian ETF for developed world ex-US:
Still looks great on the weekly, no? Quite a sexy chart, in fact, except for the whole having gone up 50% in 2 years bit. Also neat how the last time the long-term trend slope weakened was the same time last year - after which it went on a 30% tear.
What about the daily? Let's zoom in:
If anything, that's a chart threatening to break out even higher. A pop over $17.80 or so is way buyable.
The funny thing is, this is the top-10 country mix for that ETF:
|Country||% of Fund||Country||% of Fund|
Japan quit moving, Australia sucks, Canada sucks, France is full of communists, and yet this chart still goes up.
But do go on and tell me how the S&P is about to roll over and the US economy is falling to pieces, mister Republican Echo Chamber Lemming.
Previously, on Buffy the Vampire Slayer, we noted that silver's chart is about to ultramegacollapse.
And yet? And yet? The junior miners are still doing this:
Literally that's over a week of not just horizontal action, but horizontal action hugging the short-term EMA, not even moving 1 full standard deviation up or down.
It's almost as if the junior miner market doesn't even care about PM prices collapsing. Not a worry in the world.
Pretty stunning. People are still buying and selling, too: it's not as if volume has gone away.
Here's some stuff for reading:
Calculated Risk - Q1 GDP OF 0.1%. Watch Bill McBride not freak out.
New Deal Demoncrat - don't freak out over Q1 GDP. We knew it was bad already, back when Q1 was happening. Thus the market didn't freak out.
Calculated Risk - an exciting time for the data tribe. He gives a few links to data-focused blogs, which I think I might RSS for a while. After all, if it's McBride recommending them, they must be good. And by the way, he explains in this post exactly why I'm not posting as much on this blog as I used to - frankly, the world is on set-and-forget right now.
Trader Feed - letting markets tell their stories. All about silencing the bullshit of your mind and letting the market action speak for itself.
Mining.com - Morgan Stanley says gold will never see $1300 again. I think Brent Cook would beg to disagree.
NY Review of Books - on manufacturing hate in Ukraine. Oh, to go back to 1992 again, when every single university graduate in Russia was writing their thesis on how the Soviet Union was a fascist state. Irony is extra-delicious when it involves wars of racial extermination.
Here's silver's chart, with a nice red line on it showing you the cliff that you don't want it to jump off of:
And all I can say is Peter Hammill said it better:
I stood alone upon the highest cliff-top,
looked down, around, and all that I could see
were those that I would dearly love to share with
crashing on quite blindly to the sea....
I tried to ask what game this was,
but knew I would not play it:
the voice, as one, as no-one, came to me....
'We have looked upon the heroes
and they are found wanting;
we have looked hard across the land,
but we can see no dawn;
we have now dared to sear the sky,
but we are still bleeding;
we are drawing near to the cliffs,
now we can hear the call.
The clouds are piled in mountain-shapes,
there is no escape except to go forward.
Don't ask us for an answer now,
it's far too late to bow to that convention.
What course is there left but to die?
Tuesday, April 29, 2014
I'm off to the dentist today, just for a cleaning. I've gone twice already in the past few months for reconstruction of a shattered tooth.
This is the first time I've gone to a dentist in over 20 years. Aside from the shattered tooth, they only found 2 small cavities, and I have very little plaque. So it seems going to a dentist every year is a stupid waste of time.
Anyway, Billy Bishop seems to have restarted the Sinocism blog, so I'm now getting some decent China news again, and just in time, so it seems:
FT Alphaville - when ETFs make things more volatile. We goldbuggers already saw ETF-driven superhypermegavolatility in the junior mining world over the past two years, so this isn't news to us. BTW, the last Izzy Kamizzy post on this topic had a good comment from someone who noted the arrogant hedgies who trade ETFs really don't have any clue as to the liquidity of the underlying, nor do they really care.
Anyway, point being that ETF-driven volatility is now recognized as a thing. Maybe now the market can figure out how to arb that away. Then again, they haven't with gold, have they?
Reuters - in wealthy Chinese city, debt guarantees spark default contagion. Is this it? Is this the beginning of the end for China? Is this the massive repudation of debt, as a dishonest system comes apart at the seams - in China?
Peterson (heh heh, "Peter") Institute - how vulnerable are Chinese banks to a real estate slowdown? Ooh, now this is an interesting article! Remember the argument that Chinese banks aren't vulnerable to a real estate crisis because everyone over there puts down cash?
Ah-ha, says Nicholas Borst, not so fast! He notes a housing downturn will reduce demand in the industries that supply construction materials: and those companies are already drowning in debt and operating on razor-thin margins. Here, let me give you 2 paragraphs from this article, as long as you promise to go over and read the rest:
What are the historical precedents for this? Much like China today, Japan underwent a large real estate boom in the 1980s. Also similar to China, the boom was mostly domestically financed and household leverage was relatively low due to high down payments (self-financing averaged around 40 percent). Japan, like China, had a bank-dominated financial system in which land was an important piece of collateral. When land prices collapsed by 50 percent, the debt capacity of firms using real estate as collateral declined significantly. This led to a reduction in investment by these firms, damaging the entire Japanese economy.Now that's interesting, because the Japan parallel is a suggestion that China could soon suffer through a decade or two or low-to-no growth. And that is what you need to drive American reshoring of manufacturing and a commodity price collapse. And those two things are what could really drive a ten-year secular US economic boom.
With corporate debt levels in excess of 150 percent of GDP, this same negative spiral in investment due to a real estate price correction is a danger for China. This is especially true for local government financing platforms, which are especially dependent on land as collateral. A shock to land price values would diminish their ability to finance new infrastructure projects, which have been an important driver of economic growth.
Hopefully it's all just academic, and we don't see any more signs of an incipient China collapse, eh?
Mining.com - gold price drops after Chinese imports crater 38%. Gee, I guess they don't need any more gold in China now, eh? Oh, and uh:
Last week a report by the World Gold Council said Chinese firms could have locked up as much as 1,000 tonnes of gold – the equivalent of annual imports – in short-term financing deals, also a sign that end-user demand for jewelry, coins and bars may not be as strong as thought.Uh-oh! Well, hopefully Indian demand can support the gold price for a while....
Economic Times - rural gold demand may not pick up during Akshaya Tritiya. Uh-oh! Get this:
Vishnu Mukati, a soybean farmer from Ujjain in Madhya Pradesh, is not keen to buy any gold jewellery this Akshaya Tritiya, which falls on May 2. Vishnu, whose family depends only on agriculture, is keeping his cash intact so as to tide over any crisis that may arise due to weak rainfall. "I can buy some gold now. But I am not sure whether I will be able to liquidate it when I need it the most. Moreover, gold price may crash at that time," he said.Uh-oh!
Like Vishnu, Suraj Singh, a paddy farmer from Bihar, is also taking a cautious step this Akshyay Tritiya. "I will not buy gold this year. If monsoon is less it will affect my crop. I want to wait and watch for the time being," Singh said.
The rising concern of farmers over weak monsoon is likely to take away the sheen from rural gold demand this year. "Weak monsoon forecast coupled with elections will push down rural demand by at least 20%," said Amit Sampat, director, Pushpak Bullions. Rural India contributes nearly 60% of India's gold consumption. India's gold demand in 2013 came down to 974.8 tonnes following wide scale curbs imposed by the government to tame hunger for the precious metal.
Hey Cookie! How's all that high-falutin' climate "science" of yours look now?
Mining.com - iron ore price drops to 6-week low. Uh-oh!
McClatchy DC - White House deeply troubled by mass death sentence in Egypt. Um... why? Care to explain yourself, Fartbongo?
The Obama administration, which recently signaled it is prepared to reinstate a billion dollar aid package for Egypt, said in a statement on Monday that the verdicts defy the most basic standards of international justice.Um... that's funny, because America has no problem with using drone strikes to execute their radical Islamist enemies without due process, access to an attorney, fair trials or even the most basic standards of international justice. Why does the Egyptian government have to hold itself to a higher standard when dealing with their own radical Islamist enemies?
“The Egyptian government has the responsibility to ensure that every citizen is afforded due process, including the right to a fair trial in which evidence is clearly presented, and access to an attorney,” the statement said.
“While judicial independence is a vital part of democracy, this verdict cannot be reconciled with Egypt’s obligations under international human rights law.
Monday, April 28, 2014
Some more stuff:
Bespoke - internet group crashes. Good, now let's go do some proper investing in an actual economy. The reason the Nasdaq crashed was because it was in a massive bubble populated by the clowns who migrated from gold miners to computer stocks two years ago because they saw the secular breakout and buying AMAT and MU was all they knew how to do.
Reformed Borker (Bork Bork Bork!) - RIP record profit margins. Quote:
The bear case is that profit margins for the S&P 500 – now pushing almost 10% – cannot possibly be sustained, let alone expand from here. And thus, the logic goes, falling profit margins cannot possibly be good for stocks.Which I find interesting, because now that I have certification and access to the OACETT salary survey, I see that I'm due for a minimum 12% raise. And I know I'm getting the fucker cos I have over 3 years of backlog now, and there are 20 people in my province who do my work, and most of them are leaving their shitty-paid consultant jobs for the security (and pension) of working for the province.
Unless they’re falling because companies are paying workers more and economic activity picks up to the point where reinvestment is necessary. In this context (of increased household income, spending and confidence), falling margins may not be the end of the world.
BusinessWeek writes on the burgeoning labor shortage (yes, I said shortage) this morning:
Fuck you capitalists, now we of the indomitable proletariat will finally get our piece of flesh!
FT beyond brics - is the EM rally over already? I actually ditched my EM short at a wash today, but only because I see another better opportunity coming along. Though unfortunately it involves at-the-money warrants for a gold exploreco....
Raw Story - citing religious freedom, NC clergymen sue North Carolina for the right to perform same-sex marriages. The Fark lawyer brigade say the actual problem is NC's law against performing a marriage for which there is no issued license, which means a minister performing a gay marriage is breaking the law. But I think there's a bigger problem: the state has made a definition of marriage (i.e. no gays) based on religious belief, when their law purports that marriage is a secular ceremony. Hopefully the court is forced to consider the fucking hypocrisy of that.
Here's a few little boring newsbits:
BI - traders are buying the dips. And for those doomers predicting an imminent crash in the US economy, here's a quote from Ed Yardeni:
"I’ve previously made the case for a secular bull market in stocks on the premise that subpar economic growth in the US and around the world reduces the likelihood of a recession," wrote Yardeni. "That’s because slow growth is bound to keep a lid on inflation, which means that the major central banks are more likely to maintain their easy monetary policies. In the past, maturing economic expansions often ended when inflationary booms caused monetary policy to tighten. The boom was then followed by a bust."You either get short recessions caused by large rate adjustments from the Fed to choke off incipient inflation spikes, or depressionary troughs caused by catastrophic liquidity crises. Which of those is supposed to be happening in the next few years? Hm? None?
Bespoke - bearish sentiment spikes. Because reasons. Buy SPY and fuck off for 10 years.
Bloomberg - hedge funds shortest the R2K since 2004. Just like Kitco's gold survey, the hedgies are a fantastic lagging indicator, no? And thus they're a contrary indicator, no?
Reformed Borker (Bork Bork Bork!) - oh look at me, I'm so clever, I said a flat market would frustrate the most people and look at what we've got now! Sarcasm aside, it is useful to remind us that a digestive pause is normally followed by more years of strong gains, especially given the point we're at right now of very low interest rates and very low inflation. So all of his points are worth considering. Um, except this one:
5. Quietly rising commodity prices – oil, gas, agricultural, etc – spooking the old timers (sneak into the office of a PM who’d traded through the 70′s and 80′s and whisper ‘inflation!’, guy will jump out of his f***ing chair).Oh really? Commodity prices are spooking the old-timers? Because inflation, you say? Interesting. Hey, isn't there some sort of thing that people buy to protect against inflation? Some sort of yellow metal, or something? Are people buying that? Or did they just finish puking it all into China's lap in disgust?
FT Alphaville - the drop in commodity correlation is intriguing. Really intriguing! The idea is that the de-financialization of commodity markets is eliminating the price distortions. I guess this is a sign that the investment banking industry feels the secular EM growth play is over. But I wonder what happens if a particular commodity price goes up during de-financialization? Is there an "oh shit let's get back in" moment?