JS Global Macro Notes
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With Uncertainty Rampant and Politics Dominant, Charts Matter More Than Ever
In times like these it is very important to understand the message of price, and the value of charts as an extremely efficient short-hand means for communicating broad-based fundamental assessments.
But first a quick (or maybe not so quick) aside: There is a false dichotomy between 'fundamental' trading on one side and 'technical' trading on the other.
The competing perspectives at the poles are so extreme, "fundamentals vs technicals" is practically a theological debate.
We reject this artificial separation of fundamentals and technicals...
Read full commentary here
In times like these it is very important to understand the message of price, and the value of charts as an extremely efficient short-hand means for communicating broad-based fundamental assessments.
But first a quick (or maybe not so quick) aside: There is a false dichotomy between 'fundamental' trading on one side and 'technical' trading on the other.
The competing perspectives at the poles are so extreme, "fundamentals vs technicals" is practically a theological debate.
We reject this artificial separation of fundamentals and technicals...
Read full commentary here
In Defense of US Treasuries (or, Debunking an Ideological Rant)
As a general rule, it is wise to avoid debates on emotionally charged topics.
This extends to certain areas of trading and investing, where schools of thought take their differences as seriously as competing religions.
It also extends to certain macro topics -- relating to "moral" matters such as debt, the corruption of the current monetary system, and so on -- where conviction morphs into ideological zeal run wild.
We are just simple caveman traders here (with the occasional flight of theoretical fancy, like this discussion of Modern Monetary Theory).
And we aren't all that enamored of picking fights.
But with that said: Every once in a while you come across something that is just so... so... wrong... you feel compelled to respond to it...
Read full commentary here
As a general rule, it is wise to avoid debates on emotionally charged topics.
This extends to certain areas of trading and investing, where schools of thought take their differences as seriously as competing religions.
It also extends to certain macro topics -- relating to "moral" matters such as debt, the corruption of the current monetary system, and so on -- where conviction morphs into ideological zeal run wild.
We are just simple caveman traders here (with the occasional flight of theoretical fancy, like this discussion of Modern Monetary Theory).
And we aren't all that enamored of picking fights.
But with that said: Every once in a while you come across something that is just so... so... wrong... you feel compelled to respond to it...
Read full commentary here
Gold Looks Terrible Part III: The Mass Capitulation Thesis
While gold and gold stocks were looking attractive circa early June -- after the June jobs report surge -- we never found a workable entry point to establish long positions. The metal was simply not "acting right." So we stayed on the sidelines.
And now, with another jobs report on the books, gold looks terrible again... the "inflection point" was totally blown. The performance of gold, silver, and precious metals stocks has been awful relative to the macro backdrop...
Read full commentary here
While gold and gold stocks were looking attractive circa early June -- after the June jobs report surge -- we never found a workable entry point to establish long positions. The metal was simply not "acting right." So we stayed on the sidelines.
And now, with another jobs report on the books, gold looks terrible again... the "inflection point" was totally blown. The performance of gold, silver, and precious metals stocks has been awful relative to the macro backdrop...
Read full commentary here
I'm going to experiment with the format of the posts on this thread -- with more shorter observations -- to see if it better facilitates discussion.
Good special section in this week's Economist on natural gas.
An explanation of the fracking process:
http://www.economist.com/node/21558462?frsc=dg|a
Good special section in this week's Economist on natural gas.
An explanation of the fracking process:
http://www.economist.com/node/21558462?frsc=dg|a
A Mix of Hope and Fear as Mongolia Grows Rich:
http://www.nytimes.com/2012/07/16/w...fear.html?_r=1&smid=tw-nytimesworld&seid=auto
Mongolia = frontier market du jour. Potential to grow their economy at 50% a year as China transitions base metal demand from Australia (thousands of miles by freighter) to Mongolia (back doorstep).
The smart players in Mongolio right now are utilizing a "picks and shovels" strategy, staying away from the booming mining sector, and instead focusing on consumer trends and downtown real estate, which is still grossly undervalued due to a lack of financing liquidity and real estate knowledge. (Eventually hundreds of thousands of Mongolian miners will have money to spend, then, if Ulan Bator progresses along the same model lines as, say, Almaty in Kazakhstan, eventually you get the Gucci and Prada shops etc.)
http://www.nytimes.com/2012/07/16/w...fear.html?_r=1&smid=tw-nytimesworld&seid=auto
Mongolia = frontier market du jour. Potential to grow their economy at 50% a year as China transitions base metal demand from Australia (thousands of miles by freighter) to Mongolia (back doorstep).
The smart players in Mongolio right now are utilizing a "picks and shovels" strategy, staying away from the booming mining sector, and instead focusing on consumer trends and downtown real estate, which is still grossly undervalued due to a lack of financing liquidity and real estate knowledge. (Eventually hundreds of thousands of Mongolian miners will have money to spend, then, if Ulan Bator progresses along the same model lines as, say, Almaty in Kazakhstan, eventually you get the Gucci and Prada shops etc.)
Goldman Sachs and the $580M Black Hole:
http://www.nytimes.com/2012/07/15/b...-awry.html?partner=rss&emc=rss&pagewanted=all
Barclays, JPM, now Goldie again... could the optics on i-banks possibly be any worse right now? The perception is these fuckers would steal the pennies off a dead man's eyes.
http://www.nytimes.com/2012/07/15/b...-awry.html?partner=rss&emc=rss&pagewanted=all
Barclays, JPM, now Goldie again... could the optics on i-banks possibly be any worse right now? The perception is these fuckers would steal the pennies off a dead man's eyes.
And this week's, on the euro - interesting juxtaposition w/ following
http://www.bloomberg.com/news/2012-...-among-most-bearish-european-strategists.html