Wednesday, September 28, 2016

Clinton won the first debate over Trump according to the markets

The market is now more convinced than ever that Ms. Clinton will win the election following last evening’s debate between she and Mr. Trump. As we have explained here previously, the stock market here in the States is able to convince itself that her left-of-center rhetoric of recent days and weeks is nothing more than campaign rhetoric; that when she becomes the President she will turn away from these recently embraced leftist philosophies and will return to her roots better anchored on Wall Street… or at least that is the hope......

The capital markets can deal with almost any sort of news as long as it has hard, fixed news with which to deal. Mr. Trump was and is the “wild card” of the two candidates, with equity investors uncertain what his protectionist policies would bring to the domestic and the world economy, but fearful that a fully-fledged protectionist Administration under Mr. Trump would devolve into a severe global recession, if not a possible global depression. The talk of late has been properly of Smooth-Hawley, the 30’s and global economic weakness should Mr. Trump prevail in November, and certainly too that has been our fear. The non-victory “victory” by Ms. Clinton last evening has put aside those fears, at least for the moment, and has given way to stronger equity prices as we write. This may be ephemeral, but for now it seems as if the equity market has breathed a sigh of relief, hoping that freer rather than less trade is the future.

Let us be quite clear here; we are not supporters of Ms. Clinton and we shall not be voting for her; but that said, the markets feel less burdened by her economics than they would be burdened by Mr. Trump’s protectionism… the far lesser of two evils in our opinion.

We have not done much in the way of changing our retirement portfolio here at TGL. We remain long of aluminium… which gapped higher three trading sessions ago after a period of sustained weakness… while we are materially hedged with derivatives and with gold.....

via zh

Monday, September 19, 2016

Donald Trump presidency is good for Gold and bad for Stocks, Bonds

Donald Trump pictured with Robert Kiyosaki

I'm not a Clinton supporter and not really much of a Trump supporter. 

A Trump presidency would be enormously bearish for stocks. He's clearly not the known quantity and she clearly is the known quantity. She is far better known on Wall Street and the markets are always dismayed by confusion. Confusion breeds contempt and confusion would be part of his administration to begin with. So I think that would be terribly detrimental to stock prices were he to get closer to 42, 45, 46 percent and draw closer to where she is right now. 


Bonds
I tend to be at this point somewhat bearish on Bonds. It has been a 32-year bull market and it looks like the peak was made, the low in yields several months ago. I think that a Trump presidency would probably allow rates to go higher and I think that would be terribly detrimental to bond prices on balance.


Gold 
I think Gold would be supported by Mr Trump. Gold likes confusion, gold likes political dissent, gold would probably do rather well in a Trump administration. 

Tuesday, September 13, 2016

Risk happens fast according to Doug Kass


RISK HAPPENS FAST” ...as our old friend, Doug Kass, likes to tell us, for all ten of the markets comprising our International Index have fallen since Friday, with 5 of the 10 having  fallen by more than 2% and with one… the market in Brazil… having fallen by nearly 4%. 

Trend lines that had been sloping upward in instance after instance and which had held for months have been broken through to the downside, proving themselves to be readily vulnerable. “Reversals,” one after another, have evolved, and not merely daily reversals, but in many instances weekly and now even monthly reversals to the downside have either already evolved or are on the verge of doing so.
    
Risk does indeed happen fast, with the blame today going to be cast upon the Federal Reserve Bank for the thought that it may actually vote to tighten monetary policy at its meeting next week. We have never been of the mindset that the Fed was prepared to tighten policy and to raise the o/n Fed Funds rate next week, but many were and more had become so following Mr. Rosengren’s comments on Friday that he was beginning to err toward tighter policies… this from one of the more “dovish” of the voting, regional Federal  Reserve Presidents. That was all that was needed to change the market’s collective psychology at a moment’s notice, and although we are quite certain that the global market’s bearish rush shall quell any further consideration on the part of various FOMC voting  participants about tighter policies, it shall not likely make any difference; the die’s been cast and risk has indeed happened fast.


via zerohedge



Monday, September 12, 2016

There will be no Russia - Saudi Arabia crude oil freeze agreement

Saudi Arabia - Russia production freeze ?
They have been at religious difference for decades. That is not going to go away anytime soon. They have never really liked one another. The Russians have until recently been Atheists and that doesnt bode well with the Saudi's. The Saudi's see the long term price of Crude at effectively zero. There will be no freeze of any consequence. The contangos continue to widen, which tells you that there is an abundance of supply in the market. As long as the contangos continue to widen, as crude oil bids for storage, prices are going to head lower. Finally once you had WTI two weeks ago close at $50 with a $4 contango, every fracker, except for the total incompetents are making very profitable enterprise at these prices. 

So, the amount of crude oil that's going to come out of the Bakken, out of the Permian, out of Eagle Ford, is just going to be very large. The Saudis, the Iranians and the Russians have nothing they can say to us to tell us to stop our own production and we won't.

The reality is we're going to be stuck for several years between $35 on the low end, and $55 on the high. On balance we are likely to see $35 before we see $55.