Friday, August 28, 2015

Bull Market in Volatility?

Very interesting action in the VXX today. I see steady buying all day regardless of the minor fluctuations in the averages. I get a sense of foreboding when I see these sorts of things. We usually need to retest our recent lows to make them valid. Or to show their tenuousness, as the case may be.
As I post this I see the SPY attempting to rally....

control your risk. It is not necessary to always be IN the market. That is the short term view of a trader. Longer term it is necessary and prudent to be diversified. Paper, tangible assets, and friends are a few diversified categories.

gh

For reference here are charts of the SPY and QQQ.
This is pretty amazing.

gh

Monday, August 24, 2015

"The Banks are Just Fine"

Any question of the health of banks is dismissed by the "experts" today as the averages are down dramatically. Of course early in 2007 no one thought the banks were in trouble either. Except those early sellers. But they weren't telling then either. Please keep in mind that we will not hear the real reasons until after the facts.

All that makes sense is that the emerging markets economies have no end in sight to the commodity depression and they will have trouble paying back dollar denominated debt.  AKA debt default. Who holds the debt? And what will the response of the worlds central banks be? I can only see paper sacrificed on the financial alter to appease the market gods.

control risk,
gh

Thursday, August 20, 2015

The Real Deal?

The stories seem to be coming harder and faster lately as the stock averages slide down faster and faster.

China seems to be in the drivers seat.

Free Fallin'


This is my favorite bear market tune.....

It was either this or that picture of the shiny metal again!

Watch out,
gh

Wednesday, August 19, 2015

Watch Z

I've noticed some unusual activity in Zillow Group. Looks like sudden buying. I have no idea why.

Housing stocks have been perking up lately due to lack of supply, contractor sentiment, and increased purchasing power for workers, and of course the possibility of continues extremely low interest rates.

Perhaps a good opportunity here.

control risk,
gh


Aug. 21, 2015:
This thing is going to make a move.

gh

Thursday, August 13, 2015

Deflation?

The talking heads are warning that the Chinese currency devaluation means another round of deflation. On the face of it that would seem true, as China is able to export "cheaper" products and bring prices down in consuming countries. But the markets don't seem to be saying this. The Euro bounces up, the Yen bounces up, and the USD gets weak. The reason for this is that a devaluation by China will make the US Fed reconsider the tightening, or normalization, of interest rates. Whatever "normalization" means these days.

The fact that China devaluation has the potential for a renewal of the decades long currency wars, and the forward looking Fed, despite their protestations of "data dependency", will drag their feet on anything that leads to a stronger US Dollar.  Jobs are part of the data. They may raise short term rates a tiny amount in the short term, but they will be dragging their feet in the longer term. There are still huge debts around the world that must be inflated away or down. Growth is an elusive chimera. I don't believe the world will see the growth that characterized the last 50 years. We are running out of room to grow.  All that is left is for a loss of faith in money. Whatever "money" means these days.....

So I repost that gold picture. It is so shiny!

control your own risk,
gh

Wednesday, August 12, 2015

Bullion Direct Belly Up

I received this e-mail today:

I tried to get my balance back with no luck. It seems the site is shut down and not transacting in metals. I didn't have much on balance so no big deal. The bigger question is why a gold seller goes bust. And what this means in the larger picture of gold prices. When people go broke, there is usually a bottom in fundamentals near....

MARTINEC, WINN & VICKERS, P.C.
The attached Agreed Order (Doc#36) relates to the Debtor's
Emergency Motion for Order Limiting Notice and Implementing Notice Procedures CLICK: Agreed Order Granting Debtor's Emergency Motion for Order Limiting Notice and Implementing Certain Notice Procedures

Forward this email



This email was sent to ghickey@frontiernet.net by white@mwvmlaw.com |  

Martinec Winn & Vickers P.C. | 919 Congress Avenue, Suite 200 | Austin | TX | 78701
 
 
 
 

Tuesday, August 11, 2015

China Devalues Yuan

Well, you heard it hear first....

The news from last night: China changes direction


The next question is what this does to the calculations of the U.S. Federal Reserve and their intents regarding interest rate hikes in the U.S.

Do we want to appreciate our currency and thus enable increased imports of goods from China with the understanding that that means less domestic production.

Do we continue the currency war, or do we unilaterally disarm. I don't sense an attitude of unilateral disarmament in the U.S. these days.....

gh

Saturday, August 8, 2015

Monday, July 20, 2015

Rant and Ramble

My. Look how time flies. I better post something. I hope my attitude is not too obvious.


Here is a rambling rant. Or maybe it is a ranting ramble. Whatever.


Financially, the world has become lopsided. There has been an historic concentration of wealth, as it is commonly defined financially, in relatively few hands. This has occurred because of the creation of debt. I do not believe it a simple correlation that the rise in debt mirrors the rise in wealth accumulation. I believe there is an argument to be made for causation. The debt has been issued, in one way another, by those that have accumulated wealth as it is (again) commonly defined. The problem that is occurring and looming at some point in time is due to where the accumulated wealth is stored. The money that represents wealth has been "stored" in stocks and bonds. Therefore a crisis or decline in any of these broad investment classes will be a decline in money. A decline in the value of "savings". Financial instruments are where people save. And I could really care less if the value of the 1%’s savings decline, but mine will too, and I need that money at some point in the not too distant future. And I am not alone. If there is a definable middle class in this country, that middle class saves the same way that I do. Think about what this does to a culture when the savings of all the people are tied to the profits of the corporations whose share prices define the value of the employees retirement savings. This is the definition of "company town". One of the ways this affects common belief, and culture in general is that people will have financial incentive to lean politically to the right, defined as more sympathetic to business and financial capitalism. They will tend to vote and demand that the economy remain in an expansion mode, that is ultimately needed, to pay off the debts accumulated in a consumer and service oriented society. The economy MUST remain in expansion to pay interest on the debts that fuel the economy. Any slow down in the economy threatens this house of cards that has been built.

Another thing that threatens this scheme of wealth creation is any fracture in the belief system that enables the scheme. If the public begins to question the need for credit and debt as needed for survival, then the flows will reverse, and credit, and therefore wealth, will be withdrawn or destroyed. A belief in the advantages of socialism, a socialism without government debt, is one way to provide, through common effort, an alternative to the provision of services (now paid for by debt, a fungible item). It is a crippling idea, if commonly adopted, for the definition of wealth. So the people, leaning to the right for very practical reasons will tend to believe in only those solutions that do not disrupt the status quo. This, as the status quo inexorably moves toward the wall of the physical boundaries of the earth. And then "growth" must stop. It must. There are other ways to slow down and coast to a stop before the wall. The wall is imaginary, of course. Unless people SEE the imaginary wall. Then it is real and can be managed. Are you able to get a glimmer of the wall?

Thursday, July 9, 2015

Chinese Currency Crisis?



The stock market in China has taken a terrible nosedive over the last couple of months and was down 30% the last I hear. The Chinese government is determined, if one can believe the reporting, to get the stock market going up again. It appears they have encouraged their citizens to invest in stocks and many are looking to retire on the stock gains. (Sound familiar?)
If the stock market, any market, is artificially inflated then the currency used to value the securities is deflated. That was the first thought.
Second thought. The Chinese have a cultural affinity for gold. And even priced in US dollars increased demand would benefit the gold producers.
Enough said. I've been wrong on that one for quite awhile....

control risk,
gh