Thursday, April 12, 2018

Bespoke news


BIG is always a fantastic dose of reality:

Bespoke Investment Group - jobless claims streak of 162 straight weeks.

Bespoke Investment Group - AAII bullish sentiment collapses.

Add that to the $VIX finally collapsing below its EMA(20) and you've got a fantastic reason to buy, not sell.


Tuesday, April 10, 2018

Flurry of Daniela activity


Was checking my blog stats in the first time in forever, and saw a flurry of hits yesterday on my "Is Daniela Cambone married?" post from years back.

That always means Daniela's just put up a video on YouTube where she's interviewed someone. Usually it's someone utterly reprehensible like Peter Schiff or Doug Casey who drives the hits to this blog.

But today, it's the only mildly reprehensible, but also in this case funny and loveable, Mark Cuban:



Daniela doesn't manage to get Mark to show her where on the doll the bad goldbug touched him.

At least he can get uproarious laughs out of her, which means he has ten times the charm of her typical guest.

And you can tell he thinks she's hot.

Where goes the Republican party now?


Reuters - older educated voters shift away from Trump. Quote:
The 12-point swing is one of the largest shifts in support toward Democrats that the Reuters/Ipsos poll has measured over the past two years. If that trend continues, Republicans will struggle to keep control of the House of Representatives, and possibly the Senate, in the November elections, potentially dooming President Donald Trump’s legislative agenda.

“The real core for the Republicans is white, older white, and if they’re losing ground there, they’re going to have a tsunami,” said Larry Sabato, a University of Virginia political scientist who closely tracks political races. “If that continues to November, they’re toast.”
A year ago I would have called bullshit on this, given it's mainly House incumbent Dems who are up for reelection in November. Then again, if Alabama can swing Democrat, that's possibly indicative of a major shift to the world of American politics, no?

Though obviously I know a lot of this commentary comes with a hidden undercurrent of Democrat wishful thinking.

Where goes the market now?


WSJ - leverage will determine if China or the US comes out on top. The problem China faces in a "trade war" is that a country with the large trade surplus and low exports doesn't have much room for retaliatory tariffs. If the US imposes $150B in tariffs on China, that's a greater amount than China's entire US imports: so what are they going to do in retaliation?

China’s $506 billion worth of exports to the U.S. last year equaled 4% of its gross domestic product, while the U.S.’s $130 billion worth of exports to China equaled just 0.7% of GDP. This makes Chinese growth more at risk in a trade war. It also means that if both countries carry through on their threats to apply tariffs to $50 billion of the other’s exports, the U.S. has way more targets left to hit afterward than China.

Tariffs on Chinese imports raise costs for Americans but they would be easily manageable given the size of the U.S. economy. Indeed, perhaps the biggest risk to China from a trade war is that global manufacturers no longer regard it as a reliable base from which to supply the U.S. and shift operations elsewhere. If China retaliates by punishing U.S. companies’ operations in China, for example with health or safety violations, it aggravates that risk. Foreign investment has been key to China’s acquisition of technological and industrial know-how.

China could attempt to roil U.S. markets by selling, or buying fewer, U.S. Treasury bonds. But global trading in those bonds is so heavy the consequences may not be great; and it would push China’s currency higher, further endangering exports.

U.S. exports to China are not easily replaced. Several bloggers have observed that China imports so much of the world’s soybean supply that it has few alternatives to the U.S. Brazil, the only other major supplier, is already reaching its capacity. That means China would have to keep importing American soybeans while its tariff rippled through to the price of tofu, bean curd, animal feed and thus chicken and pork. “Chinese tariffs would no doubt hurt US farmers, but likely hurt Chinese consumers more,” Brad Setser of the Council on Foreign Relations said on Twitter.

So I think all this "OMG China trade warz!!!!" nonsense is going to melt away, and the market will suddenly remember Trump's tax breaks to corporations as earnings season progresses.