Thursday, May 28, 2015

Greece to stay in EU and Euro to weaken

The dollar has risen to and for a short while pushed through 121.00 Yen/dollar and the EUR has fallen to and had remained for a while through 1.1100. However, not uncommonly, the dollar has stopped as these new “Big Figures” loom large, but the trends are clear: money is moving firstly to the US dollar and secondly it is moving to the “English speaking” currencies and it shall continue to do so for quite some long while into the future.
Tourism is important to Greek economy
Regarding Greece, we shall firstly state once again that although the German people have no respect for their Greek “cousins,” seeing them as shiftless, lazy, un-creditworthy freeloaders (and this really is not a too-harsh view of how the German populace actually does feel toward their Greek compatriots; all one has to do is ask Mr. and Mrs. Schmidt of Germany and stand back and wait for the resulting tide of vitriol for when the bounds of political correctness are withdrawn the truest, but worst, feeling surface), the German political and industrial “cognoscenti” know that Germany needs to keep Greece in the EUR-zone in order to keep the € weaker than it would be otherwise. They know this because they also know that Germany’s economic fortunes lie with Germany’s export trade, and exporters shall always choose to err in favour of a weaker rather than a stronger currency. Hence, despite the citizenry’s antipathy toward Greece, the “cognoscenti” will do what they must to keep Greece in the EUR-zone, and in the end will allow for any and all methods of extending Greek debts.

Thus, these series of massive debt maturities that shall be coming one after another after another on through the summer shall always go to the 11th hour and 59th minute, and there will be great wailing and gnashing of teeth on the part of the Greek and German authorities, but in the end these debts will be extended and Greece will remain within the EUR.

Again, we shall say that were we Greek we would long ago have dropped out of the single currency; would have stood down from these debt maturities; would have defaulted on those debts and would have taken up our old drachma in order to give our industries the ability to be competitive in the world market through devaluation. But the choice…at least for the moment… is not Athens’ to make. The choice is being made in Berlin, in Dusseldorf, in Munich. The choice is being made by ThyssenKrupp; by Bayer; by Daimler; by Volkswagen; by Siemens, by the BMW Group and by BASF.

All of that said, there is always the possibility that the Greek political figures… Mr. Tsipras and/or Mr. Varoufakis primarily… may become so exercised that threats shall be lobbed and confusion raised, but in the end it shall be Germany’s decision that shall prevail and Germany’s decision shall be to keep Greece in the EUR. After all… and this is perhaps the most important comment we shall ever make on this issue… the reason for the EUR’s existence other than to try to maintain peace in Europe after centuries of warfare is to allow Germany to export goods and services, keeping a tight German rein upon the other members of the “zone.”

Tuesday, Mr. Varoufakis went out of his way to promise that an agreement between Greece and The Brussels Group was near; that talks were progressing into what Mr. Tsipras called “The final stretch.” Mr. Varoufakis said that a conclusion to these talks was but a week or less away, only to have both gentleman embarrassed by ranking German and continental officials who said that the talks in question were not moving along at all and grave doubts about the efficacy of those talks remained. As Ms. Margaritis Schinas, a spokesperson for the European Commission, said: “More time and more effort is needed to bridge the gaps on the remaining open issues. We consider that progress is being made, albeit at a slow pace.”

And so the various side-shows continue. One after another of European, German and Greek officials shall take the centre stage for a few moments. We shall see the markets vacillate between hope and despair, but in the end at the 59th second of the 59th minute of the 11th hour of each debt maturity some means shall be found to keep Greece in the EUR and in the end the EUR will continue to weaken.


Tuesday, May 26, 2015

Chinese stocks could be a Buy in a month from now

Chinese shoppers in downtown Shanghai
"I would not buy Chinese stocks here, not with the Shanghai index up from 2000 to 4000 in the course of Six months. Let prices go down 10, 15 or 20 percent and then I will be interested. I think President Xi is turning China into a consumer society." 

What Chinese stocks should one buy ?

"I think the easiest thing is to go to FXI and the PEK. Those are the 2 dominant ETF's. I think that's the only way for the public to be involved in a market that divergent, that far away, that geographically removed. I think the public and I shall do the same thing when I'm ready to buy China, I'll buy PEK, I'll buy FXI.. That will give me all the exposure  that I want. Thats the better way to play it for the public no question"

Wednesday, May 20, 2015

Saudis have won oil battle with frackers [VIDEO]

[Watch video above from CNBC interview of Dennis Gartman on Saudi oil war vs US oil Frackers]

Monday, May 18, 2015

Oil Term structure bothers Dennis Gartman

Last week, I wanted to sell crude oil short since we had seen a strong rally. But what bothered me was the term structure. That is where informed money leaves its footprints in the sand. When we saw a break in crude oil...we should have seen the carrying charge widen and it didn't do that and that bothered me.

Monday, May 11, 2015

Dennis Gartman on David Einhorn oil fracker call

The term structure of the futures market only explains whether something is in abundant supply, whether demand is strong, 

Theres no predictive quality from the Term Structure whatsoever.Dr Bernanke got this absolutely wrong several years ago when the term structure was the other way around where the nearby futures were at a huge premium and he said that indicated the prices of crude oil were going to fall and indeed prices of crude oil exploded to the upside. 

A lot of people misunderstand what the Term Structure means. David Einhorn misunderstood it completely. 

I want to explain to the public that the Term Structures of the futures does not predict where prices are going to go,....never has, never shall.

[Watch full interview below]

Wednesday, May 6, 2015

China has lot more Gold reserves Dennis Gartman thinks

China presently says that it has 1,054 tonnes of gold in its reserve position, making it the 7th largest official gold holder, surpassed last year by Russia which overtook China following Moscow’s gold purchases which we thought were intended to reduce Russia’s dependence on the dollar. 

Russia, officially, has 1,207 tonnes of gold in its reserve position and that gold is approximately 13% of the state’s overall “currency” reserves. China’s gold holdings, on the other hand, as a percentage of its total reserves are a scant 1%.

We suspect that the real level of Chinese gold reserves is much closer to 2,000 tonnes rather than the official 1,054 tonnes noted above and that China has been adding to those reserves surreptitiously via Hong Kong. By comparison, the US “officially” has a bit over 8,100 tonnes of gold on hand; Germany as nearly 3,400; the IMF has 2,800; Italy has 2,450 and France has 2,435.

Monday, May 4, 2015

Buy the markets after the short term correction

It's not going to get ugly bad; it's not going to get ugly for a long period of time. I think it's going to get ugly swiftly and I think it's going to make a lot of people very nervous. Its been a long time since we had a 5, 6, 7, 8 percent correction. Give it 2 or 3 weeks and a 5 to 6 percent correction and it will be time to buy again.

It's still a bull market and as I've always said, in a bull market there's only three things you can do: be really long, be pleasantly long or be neutral. I think it's time to be neutral.