Wednesday, May 11, 2016

the typical hokey-pokey market news

You put your left foot in, you put your left foot out....

Reuters - US companies brighten their earnings outlook. Oh but wait then Disney reported. And then Fossil whiffs, and they're really just a $2B kitsch retailer but whatever. It means Reuters gets to kill more electrons today.

Fortune - Carl Icahn is 149% net short the US. OK, that makes me want to go double-long. Why? Cos he was apparently 18% down in 2015, and I turned a profit even after getting literally slaughtered in the August robopuke. My performance is better than Icahn's. Let that sink in.

South China Morning Post - mystery authoritative source says China heading for big economic policy shift. And Billy Bishop, who's at least a credentialed and informed China watcher unlike most of the clowns out there, thinks this is a hint that Li Keqiang is about to get the axe in favour of Wang Qishan, which is apparently important.

Mother Jones - 70s stagflation never actually happened. Ha! Interesting! Again, it pays to look under the hood of every indicator you come across, instead of following them blindly. In this case, apparently the US "inflation" of the 70s was actually a result of the US calculating home prices as a function of interest, so the rise in interest rates made inflation go up. Back that out, and you get a steady 3%-6% inflation corridor, except for the inflation spikes of the 1980 Iran oil shock and the 1973 "we're going to pull a snit because Israel kicked our asses" oil embargo: basically, it means there was no stagflation, just a simple supply-shock stagnation.

Polemic's Pains - the Chinese San Andreas fault. This bit is insightful:
Last week I was sitting on my hands until just after the payroll when a few things not moving brought me in to buy equities. That 'not moving' thing was the price action 20 minutes after the print where the volume of the ‘huge miss on Non Farm Payrolls’ shouting peaked whilst prices had stpped falling. I couldn’t quite see how they were such a dreadful number and even if they were then equities would get a lift from yields falling and more Fed push back. As it happened, the triumvirate of rates, USD and equities all put in reversals and headed back north and we ended the week correcting out some of the previous days' risk off trends.
It's even more insightful when he switches back to bearish at 2080.

And this bit is funny:
China has been the bear story that won't start giving.
But then he mixes the two and expects Chinese woes to meet the post-NFP bounce... what, this week at 2080 perhaps? Your time horizons might need calibrating.

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