2021-02-28
Real Estate
USDJPY Monster Reversal Pattern Still Extant
The sloping resistance line is half a percent away. It was briefly pierced in February and March 2020 but didn't hold. Any modest U.S. dollar rally that includes the yen could break resistance again, it could come as soon as Monday if volatility from the end of last week carried over. While many charts have severely damaged the dollar bullish view and the deflation risk, this is one that is close to screaming "hold your horses" to the reflation trades.
UST 10yr Yield Channel Already Negative
2021-02-27
Copper-Gold Ratio Calls For 2pc 10yr
The bearish interpretation says the post-2008 trap is alive and well, copper prices will peak and reverse as they did in 2011, 2014, and 2018, with rates eventually following.
I have bets on both sides right now, I'm long copper juniors and have short-term puts on copper majors.
Copper could retrace more than 10 percent from its high and not dent the uptrend from the March 2020 low.2021-02-26
Biden Skips or Delays State of the Union
Probably nothing, but in light of Congressional Democrats trying to take away the nuclear football...
Just When You Thought Selling Was Done...
Totalitarianism is Coming Back, Greens Want to Measure How Much Sin is in Each Product
2021-02-25
Robotic Farm Workers Have Arrived
Island Reversal for MicroStrategy
Previous posts mentioning MSTR are here.
Game Over for Federal Reserve?
ZH: Treasury Yields Explode After Catastrophic, Tailing 7Y Auction
Ahead of today's closely watched 7Y treasury auction, where the bulk of the recent Treasury rout has been concentrated as traders hammered the belly of the curve, we said that "If the 7Y tails a lot, watch out below" as that would only add insult to today's furious selloff injury. Well, that's precisely what happened, because with the 7Y pricing at 1.195%, this was a whopping 4.1bps tail to the 1.151% When Issued.The article finishes with:The auction was, in a word, catastrophic.
Starting at the top, the bid to cover tumbled from 2.305 to 2.045, the lowest on record, and far, far below the 2.35 recent average.
But if that was ugly, the internals were even worse, with the Indirects plunging from 64.10% to just 38.06%, the lowest since 2014, as no foreigner suddenly wants to even smell US debt!
The Fed better do YCC NOW, or else we are about to find out just how much absolute bullshit MMT really is.I'm not sure the Fed can do yield curve control. First, YCC targets the short-end, it isn't about buying the whole yield curve. See Bloomberg (archive link): Fed’s Yield-Curve Control Isn’t for Taming Long Bonds
Now, to bring up yield-curve control misunderstands how Fed officials, notably Vice Chair Richard Clarida and Governor Lael Brainard, have said they envision carrying out the policy, which remains deep within the central bank’s toolkit. Simply put, yield-curve control has never been about squashing longer-term yields, like those on 10-year notes or 30-year bonds. Instead, it’s a way to make sure bond traders don’t try to strong-arm the Fed into raising short-term interest rates before it’s ready to do so.Things could change. The assumption in the article is that long-bonds are fine, but that was a couple weeks ago. Today's 7-year auction caused a breakout in the 10-year yield (above 1.50 percent), that it subsequently lost as stocks plunged on the up move. Before the auction, the 2-year Treasury bond yield spiked 40 percent to a high of 0.194 percent. It's possible this was a selling-climax in the bond market and a correction in stocks, along with inflation trades such as commodities will begin. If not, I'm not sure if YCC would help the stock or bond market. It might calm the market down for a time, but my sense is many investors would see more intervention as inflationary. That would accelerate a sell-off in long bonds, cause panic buying of gold and commodities, and probably trigger a crash in the stock market because "long duration" tech stocks dominate the market. (DJIA beats SPX which beats COMPQ in this scenario.)
I have barely sold any mining stocks, but I am well hedged with a few tactical puts along with a lot of VIX calls.
2021-02-24
Democrats Fear Biden With Nukes More Than Trump With Nukes
WashTimes: Democrats ask Biden to cede authority on nuclear launches
A group of more than 30 House Democrats is asking President Biden to give up his sole control of U.S. nuclear weapons.Also, Trump was right again. He thought the 25th Amendment bill proposed by Pelosi last year was about Biden, not him: Trump says Pelosi’s 25th Amendment bill is about replacing Biden with HarrisIn a letter led by Rep. Jimmy Panetta of California, the Democrats ask that their party’s leader alter the command-and-control structure surrounding America’s nuclear arsenal so that no single person can launch the weapons.
“Vesting one person with this authority entails real risks,” the letter states. “Past presidents have threatened to attack other countries with nuclear weapons or exhibited behavior that caused other officials to express concern about the president’s judgment.”
These are the types of headlines and stories that I mentally file away into the "U.S. dollar collapse" and "extreme political result" drawers.
Finally, this video needs to be remade with Biden.
A Sign of the Top Hat
More broadly, we are in the binary moment where the future braches into extermely rapid inflation or we are at the top of a massive bubble. We were here in March 2000 with tech stocks, June 2008 with oil and September 2011 with gold.
The analogy I keep coming back to, because it is the perfect way to think about cryptocurrency, is that Amazon lost more than 90 percent of its value in the early 2000s bear maket despite becoming more successful than even its most delusional bulls could even imagine in the year 2000. Cryptocurrencies are doing amazing things, there are here to stay, and you'll defeintely want to be involved, but I can't shake the feeling that if you set aside some cash to invest, you'll be able to increase your exposure by 10x simply by waiting. Maybe this time is different, or maybe it's history rhyming one more time.
Castles on the Ground
The U.S. economy is "growing" only because of stimulus. There have been no cleansing defaults that reduced the cost of capital. Companies didn't go bankrupt, today owned free and clear by new owners. Instead, small businesses were wiped out by lockdowns. Their defaults are in the future if the economy cannot revert back to "normal." If there is a transition to a new economic pattern, it will come with transitory unemployment and recession.
In short, this is not the start of an economic growth cycle unless there are incredibly inflationary policies. The opening of the economy is assumed. The $1.9 trillion is assumed to hit a normalized economy. The market is not discounting the risk that the economy needs far more than $1.9 trillion in stimulus. It isn't considering the risk that the public revolts again, like in 2016, and chooses not to wreck the economy for a green pipe dream. It isn't discounting the risk on the other side of the ledger, that interest rates rise amid soaring inflation. It seems like many people think the Fed can control the whole yield curve and that markets won't break if they try. As if the dollar or oil, or some other assets, won't trigger a recession. The government, central banks, ruling classes and seemingly most investors are more naive than I've seen at anytime in my life.
Pop Goes the Rare Earths
America's Tyrants Want Fox News Removed from Cable
The movement crested this week with a letter from California House Democrats Anna Eshoo and Jerry McNerney, written to the CEOs of cable providers like Comcast, AT&T, Verizon, Cox, and Dish. They demanded to know if those providers are “planning to continue carrying Fox News, Newsmax, and OANN… beyond any contract renewal date” and “if so, why?”Expect Fox News to be kicked off cable. Social media is already being retarded by bans and censorship. I deleted my Facebook account almost a decade ago, I stayed off Twitter for a long-time and then ditched that. Censorship will increase exponentially in the years ahead because the ruling class runs on the Narrative, not Truth.Their rule is built on lies, from Russiagate to systemic racism. Their "solutions" and the biggest problems in America. When reality smashes them in the face, they call the Truth disinformation. They are going to lose control of the currency in the coming years. It's possible they will institgate and lose a major war. Crime is already soaring in cities run by the ruling class. Inflation is guaranteed to rip if we don't get lucky (?) with a depression first.
There is alternative social media on Gab.com . Censorship-resistant Twetch where you pay to upload to the Bitcoin (BSV) blockchain and get paid for your posts, or pay others for their good content. A bigger solution to technological totalitarianism is Urbit. I have some stars and will start issuing planets soon...
2021-02-22
Guangdong Preparing for Maglev Links to Major Cities
South China’s Guangdong Province plans to construct two ultra-high-speed maglev lines linking provincial capital city of Guangzhou and another booming city Shenzhen with Shanghai and Beijing, cutting current travel time via high-speed railway by half.Maglev.net: THE GUANGZHOU – SHENZHEN MAGLEVAccording to the Territorial Special Planning of Guangdong Province (2020-35) released on February 9, Guangdong has formally stated the intention to set aside space in the province for the construction of a high-speed maglev line linking Beijing, Hong Kong and Macao, and another one line linking East China’s Shanghai.
If the plan is realized, it’s estimated that the travel time between Shenzhen, Guangdong and Shanghai will be shortened by half to merely 2.5 hours, while that between Shenzhen and Beijing will be 3.6 hours.
It will be part of the new Chinese high-speed maglev network running from Wuhan to Guangzhou and onwards to Hong Kong.iFeng: 多地规划预留高速磁悬浮通道,“超级高铁”要来了?Operational railways connecting Guangzhou with Shenzhen
Guangzhou – Shenzhen - Hong Kong High-Speed Railway Guangzhou South Station to Shenzhen North Station: 29 mins 350 km/h (217 mph)
Guangzhou – Dongguan - Shenzhen Intercity Railway Xintang Station (Guangzhou) - Shenzhen Airport: 60 mins 200 km/h (124 mph)
Guangzhou - Shenzhen Railway Guangzhou East Station - Shenzhen Station: 74 mins 200 km/h (124 mph)
Recently, the Department of Natural Resources of Guangdong Province announced the public consultation version of "Guangdong Province Land and Space Planning (2020-2035)". The plan proposes to reserve six important traffic corridors, including the Beijing-Hong Kong-Macao high-speed magnetic levitation and Shanghai (Shenzhen)-Guangzhou high-speed magnetic levitation. It is also the first time that the high-speed maglev line has been clearly planned.Prior to this, the world's first high-temperature superconducting high-speed maglev engineering prototype and test line using the original technology of Southwest Jiaotong University was officially opened in Chengdu, Sichuan, which marked a breakthrough in the engineering research of high-temperature superconducting high-speed maglev. Possesses the conditions for engineering test demonstration.
A reporter from China Business News found that some major city clusters have been planning high-speed magnetic levitation in recent years. "Super high-speed rail" is really coming?
Copper Gold Points to Higher Rates or Recession
Tech vs Financials
Everyone Laughed at Dow 36,000, And Then They Bought It
For myself, I'm mostly drawn to the volatility index because I think it has support from both bearish and bullish moves (vertical rises in things like BTC).