TheRealZed
Retired Sailor
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House + Gold fixes mis-priced real estate in China!
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Gold and silver prices are firmer in early U.S. trading Wednesday, with gold notching a three-week high, in the immediate aftermath of a batch of U.S. economic data than came in a bit weaker than market expectations. December gold was last up $8.10 at $1,973.20 and December silver was up $0.081 at $24.59.
The just-released ADP National Employment Report for August showed a rise of 177,000 jobs, compared to expectations for a gain of 200,000 and compares with a revised rise of 371,000 in the July report. Meantime, the second estimate of second-quarter U.S. GDP showed a gain of 2.1%, year-on-year, versus the first estimate of up 2.4% and was below market expectations. The closely watched PCE price index for the second quarter was up 2.5% versus the first estimate of up 2.6%. All of these numbers fall into the camp of the U.S. monetary policy doves, who want the Federal Reserve to hold off on raising interest rates further.
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Onto our call of the day from Société Générale, which flags a risk indicator tracking hedge funds that is “increasingly risk-on.”
As SG’s strategist Arthur van Slooten and head of global asset allocation Alain Bokobza note, hedge fund positions, whether long or short, are worth watching as they can shed light on financial market trends.
“After a nice summer break, we discover that hedge funds have continued to adjust positions upward and are now clearly risk-on,” they say.
They illustrate that via their Multi Asset Risk Indicator — SG MARI, which qualifies hedge fund positions as risk on or risk off — now at its highest level of 1.52 since summer 2018, when it saw a peak of 2.76. ...
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“That said, even though it is still some way from that danger zone, most surges in SG MARI (see shaded areas on the above chart) have been followed by significant drops (see arrows on the chart) in the indicator,” they say. So, think hedge funds having piled into stocks and other assets, backing out in a big way.
In May, the strategists noted inconsistency of hedge fund positioning in bonds and equity. Since that time, shorts on stocks to hedge against a recession have largely been neutralized.
“So, recession fears seem to have been ditched for now, potentially at a rather unfortunate moment,” say the pair.
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Do you remember the email you got from that Nigerian prince?
Any info on what puts he was buying and what time frame and strike price? Looks like he may be losing his ass right now. He may be right eventually. It just depends on his time horizon. For all we know he may have already cashed out.Michael Burry Makes $1.6 Billion Bet On BLACK MONDAY Type Crash (Explained)
... our call of the day from Société Générale’s poke-the-bear strategist Albert Edwards, who updated his “maddest macro chart” showing why U.S. corporate profits have held up so well during rate hikes.
As he explained in July, those profits have delayed a U.S. recession because companies have largely been net beneficiary of higher rates. Corporates borrowed long-term at 2020 and 2021’s low rates, then lent money back via Treasury bills and other vehicles at higher short-term rates.
However, in his note to clients on Wednesday, Edwards declares that “beneath the megacaps, the vast bulk of companies are in big trouble.” Yes, he’s talking about smaller companies.
The strategist who has devoted time to talking about corporate greedflation this year, spent much of his August break picking the brains of colleagues like the bank’s head of quant equity research, Andrew Lapthorne. He says a big fall in aggregate corporate interest payments “masks a big divergence in fortunes,” as shown in his chart:
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“It stands to reason that smaller quoted companies in the Russell 2000 index, as well as unquoted companies, don’t have as much access to corporate bond issuance so have been unable to lock into the near-zero long-dated fixed borrowings that the larger companies have,” writes Edwards.
With that, he walks back his July conclusion that the U.S. is “practically immune from rising rates. Large and megacaps might be immune, but the explosion higher in corporate bankruptcies is sending a clear message,” he says.
He points to S&P data showing 402 corporate bankruptcies so far this year, nearly equal to 407 seen in 2020 and only higher during the global financial crisis. Look out for August data from the American Bankruptcy Institute, he advises. And citing the Fed senior loan officer opinion survey, Edwards says a willingness by U.S. banks to lend to small and large companies is now at recessionary levels.
But the real issue is that smaller companies remain the lifeblood of the U.S. economy, providing a chunk of jobs, he says. That’s as the megacaps may be the “vampires sucking the lifeblood” out of those corporates and others.
Edwards concludes. “It seems the lights are going out all over the U.S. smaller-cap corporate sector. They weren’t able to lock into long-term loans at almost zero interest rates and pile it high in the money markets at variable rates.” Ultimately that pain may trigger a recession, and maybe even the bigger companies will start to wobble.
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Somewhere around 35 minutes he talks about how the Japanese emperors used to devalue the Japanese coins to the point where the Japanese people didn't trust Japanese coins for 600 years. They used Chinese coins or other coins and bags of rice as money.There is a 90 minute interview with Armstrong. Thinks Bitcoin is an absolute fraud perpetrated by the government. Does seem strange the supposed creator is who knows who right?
Some people believe they can control the direction of hurricanes. I don't know about that one.Crazy.
Sounds like he will fit right in in DC.Rainmaker.
Not sure we don't have to revisit recent lows. Not buying any more right now.Miners didn't do much today. Silver kinda fizzled. Might jump in some ZSL tomorrow. get paid on some weakness.
MELI looking like it might make a run for the double top at 1388. Up over 90 in the last 2 days. Maybe one more full moon push.
We got enough of them now thanks.Sounds like he will fit right in in DC.
Rainmaker.
Not that I'm gonna wear one anyway.
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