Archive for the ‘Commodities’ Category

Notes From Underground: Just a Song Before I Go

April 5, 2020

At this time of great chaos in the world I am going to take a 10 day hiatus to sit back and reflect as it is the time of Passover and Easter. These holidays will take on special significance this year as the Covid-19 impacts our plans.

So as I retrench I put forward the words of the Prophet Micah for something to contemplate: “To Act Justly, and to LOVE MERCY and to walk HUMBLY with YOUR GOD.” Wishing all my readers a meaningful period of the holidays before us. I may post a podcast I recorded this morning with Anthony Crudele but that will be it, although I will respond to all questions in an effort to stay alert to critical issues in a rapidly changing global environment. Now to the issues before us.

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Notes From Underground: The Exciting Game Without Any Rules

March 24, 2020

Well, the apocalypse has fallen upon the financial markets much as we have discussed at NOTES FROM UNDERGROUND on February 2. The onset of the DEMAND SHOCK has unleashed the fears of a deflationary spiral. My readers have been WAY AHEAD of the CNBC crowd in analyzing the potential outcomes and predicting quality trades as the PANIC IN NEEDLE PARK fostered by the central banks was/is beginning to unfold. Any person who thinks any economic release has market value raise your hand but keep it six feet away as you are likely contagious.

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Notes From Underground: Three Cheers for Christine Lagarde

March 19, 2020

While the rate cutters were busy dumping on ECB President Christine Lagarde for not cutting and only announcing an increase in bond purchases I opined that Lagarde was getting more by doing less. Lagarde did not go down the Draghi route and lock up with Jens Weidmann and the Fiscal Austerians in the Hanseatic League. The ECB president played for a bigger prize and tonight she delivered with an announced 750 billion euro bond buying program of both public and private issues.

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Notes From Underground: It’s Time For the Owl

March 8, 2020

Well things are on the bubble as the Russians and Saudis had a “falling out” as lovers often because the OPEC talks resulted in an ostensible all-out war to break oil prices. The consensus loser will be the U.S. oil patch as the FRACKERS are carrying huge amounts of debt, which will not be paid while prices sharply decline.

There will be talks about a credit crisis as banks and other oil creditors will have to absorb losses and probably restrict lending to other borrowers. Those with private equity investments in the Bakken, Permian and others will be taking inventory on how battered their portfolios will be. The wily Putin will finally have his way as the sanctimonious Americans will have to rescind the ill-devised/ill-advised SANCTIONS that have had little impact.

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Notes From Underground: A Microscopic Germ Packs a Wallop

March 2, 2020

There is no doubt little organisms can wreak havoc in ways that blowhards could never imagine. People are trying to assess the financial impact by looking at previous pandemics. This is flawed analysis because each pandemic is different depending on the global circumstances and the morass for incubation. During the Cold War people did not move freely so political containment acted as a drag on the spread of disease.

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Notes From Underground: And the Concerns Continue

February 18, 2020

On Tuesday global equities were down a very modest amount. The U.S. DOLLAR continued it move higher as the growth story and positive nominal yields is enough to push global investors into the U.S., the center of complacency. Commodity prices started off  weak but OIL, grains and even COPPER found some buyers.

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Notes From Underground: Do You Hear What I Hear?

February 16, 2020

First, the news on the coronavirus continues to be buffeted by media outlets’ urge to be the first to report. The need for speed creates a rash of questionable stories that later get retracted or certainly get less sensational when context is added. When trading around this, I urge caution as opportunity knocks for those traders who can remain patient. There seems to be scientific interest in the failure of the VIRUS to have impacted children. While it is in the early stages of a potential pandemic, according to my source on all things infectious diseases, it is an outcome to watch in an effort to measure the potential impact.

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Notes From Underground: Man Plans, God Laughs

February 2, 2020

It has been three weeks since I have sat down to articulate my thoughts on the global macro financial system in an effort to profit from trade/investment potentials. A lot of the discourse with many readers the focus was on the situation in the Middle East.

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Notes From Underground: Whistling Past the Tombstones

December 29, 2019

As we approach 2020, it seems as though the financial world is unconcerned about the dramatic increase in DEBT. Yes, the airwaves are alive with news of the extremely low level of mortgage delinquencies but fail to discuss the growing delinquency of 90-day auto loans and the $1.5 trillion pile of student loan debt, an albatross for college graduates over the 20 years. Corporate debt has increased by the magic of financial engineering in which share buybacks and dividend increases are greased with the benevolence of central banks caught in a trap of their design.

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Notes From Underground: Same Old Song With a Different Beat

December 1, 2019

There are few questions about the one-dimensional nature of the driving force of markets around the world. Cheap money sustains equity markets as the vast amounts of central bank liquidity continues to provide support for low-cost borrowing and a lack of alternatives for investors. A subset of the cheap cost of capital has been the “hoped” for resolution to the China/U.S. trade conflict which without question has disrupted global trade. South Korea’s recent economic performance is a reflection of the impact suffered by key components of the global supply chain driven export-oriented economy.

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