Monday, July 10, 2017

Chasing the next credit bubble. It feels best right before it pops.

A recent tweet by Kevin Smith of Crescat Capital  (someone I've had the pleasure of meeting in person) reminded me of just how far we've come since 2008 and the Great Recession.

By how far we've come I'm not meaning in a positive sense.  If you look at the selected ratios of debt to GDP for Canada, China, and Australia they've each grown tremendously since 2008/09.   While this has helped goose growth in each of their respective economies (and spilled out into the greater world as well)  it does not bode well for the future.  The thing about debt is it need to be paid off.  Somehow, someway (by default, payment or inflation) the ratios will drop when they reach such lofty heights.  

Crescat capital annotated the above chart rather nicely showing you the negative events which coincided with either a rapid rise in debt to GDP (like Thailand) OR a high ratio overall (Japan, USA, Spain)  Their implication is Canada, China, and Australia are heading toward a likely credit crises and I'm inclined to agree with them.  

These are not the only shimmering spheres on the horizon however.  Look below and you can see all three of the Scandinavian countries are above US levels before our little economic problem in 2008.

Source: Federal Reserve (link)

The challenge with calling the tops in a bubble is you are battling central bankers and their willingness to keep the debt flowing.  Who wants to say no when the money is flowing?  Even central bankers can exhibit human tendencies on occasion, they don't want to be derided for being the Grinch that stole Christmas...  As such it's very hard to know when they will finally start to restrict the lending and tighten liquidity.    While the US is not at the top of this rarified list it is entirely possible our current series of recent (and future?) rate hikes will be enough to tip one of these countries over the edge which could then get the dominos falling.  When is unknown, but that it will happen appears quite likely.


Looks like the Chinese credit impulse may have turned negative recently.  As the data presented above is nearly 6 months old this is very interesting.  While it ripple through to the US markets? We shall see shortly.

Wednesday, June 22, 2016

Jim Chanos - Easier to Find Short Ideas as Bull Market Goes On

I've mentioned Jim Chanos before in this blog, and he's out again with some telling examples of late stage 'exuberance'

While Mr. Chanos is almost never perfectly timed with the market's current mood, he is rarely wrong longer term.

Monday, May 2, 2016

Cool tool - IBorrow shows you short stock availability and borrow rates

While reading one of the many blogs I follow I ran across this cool tool which I'd like to share with you:

Interactive Brokers provides data showing borrow availability and the rate you'll pay to borrow the stock.  Using this data however is a bit clunky.  Fortunately IBorrow has come along allowing one to quickly pull up and visualize the data.

For those looking at option strategies, which broad based etf's to short, or other strategies, knowing the quantity and rate of shares available can be important.  I suggest you give it a try.

ht: Glenn Chan

Friday, April 29, 2016

Never bet against The Chanos

Never bet against The Chanos

That may sound like an odd commandment, but it's a good one. I speak of Jim Chanos, the well known short seller.  Speaking highly of a member of such a profession may raise the hackles of some individuals, as well as governments, but I have been following his public pronouncements for quite a while and he may be early, but very rarely wrong.   Post the great recession of 2008-2009 he was one of the first to warn about the construction & credit bubbles percolating in China; and while ridiculed for it his warnings have played out.

I even  have a google alert on "Jim Chanos" (along with quite a few others) so as to catch everything he talks about. Recently I got a hit on a great 90+ minute podcast he did with FT Alphaville.

Podcast: Jim Chanos on the art of short-selling

I suggest you listen to all of it.

Monday, April 18, 2016

Hugh Hendry talking macro and China

It's been a while since I've mentioned Hugh Hendry but he's popped back up on YouTube recently.  After his positively raucous returns in the depth of the crisis he had a long period of very underwhelming returns and from his manner in this broadcast I'd guess a tough few years. describes the decline in assets under management in 2014

As always I find him entertaining to watch.   He provides some of the reasons for his reversal of opinion on China as well.  Regardless whether you agree with him or not I suggest you listen.


Wednesday, March 9, 2016

US Coal - brutal fallout from low natural gas prices

I've recently posted on the drop in natural gas and oil prices, but I haven't commented much on the knock on effects.  A brutal example is the destruction of coal companies in the US.  Train car loadings of coal have completely fallen off a cliff, caught fire, and remain a smouldering ruin.

Look at some of the stock symbols for coal companies and you'll see declines even more severe. Here's BTU (Peabody Energy)

Low natural gas prices are encouraging a switch from coal to natural gas electricity generation

It is not a good time to be in the coal business

disclosure: No positions, either long or short.

Friday, March 4, 2016

Free delayed quotes and a plethora of other financial data

If you are looking to import quotes into an excel spreadsheet, I haven't found anything else as convenient or extensive.  It can take you a while to get up to speed on the data available but it is worth it.   The range of data available, for free, is mind boggling.  

Here's just a sample of the data available from the Yahoo feed:

Basic QuoteFundamentalsTechnicalsEstimatesReal-Time (ECN)
sSymbolj1Market Capitalizationa2Average Daily Volumet81yr Target Pricek1Last Trade (ECN with Time)
nNamef6Float Sharest7Ticker Trende9EPS Est. Next Quarterb3Bid (ECN)
pPrevious Closer5PEG Ratioj52-week Lowe7EPS Est. Current Yrb2Ask (ECN)
oOpenp5Price/Salesj5Change From 52-week Lowe8EPS Est. Next Yearc6Change (ECN)
hHighp6Price/Bookj6Pct Chg From 52-week Lowr6Price/EPS Est. Current Yrw4Day's Value Change (ECN)
gLowb4Book Valuek52-week Highr7Price/EPS Est. Next Yrc8After Hours Change (ECN)
xExchangerP/E Ratiok4Change From 52-week Highj3Market Cap (ECN)
l1Last Trade (Price Only)eEarnings/Sharek5Pct Chg From 52-week Highr2P/E (ECN)
lLast Trade (With Time)j4EBITDAm350-day Moving Avgk2Change & Percent (ECN)
d1Date of Last Trades7Short Ratiom7Change From 50-day Moving Avgv7Holdings Value (ECN)
t1Time of Last TradedDividend/Sharem8Pct Chg From 50-day Moving Avgg5Holdings Gain & Percent (ECN)
k3Last Trade SizeyDividend Yieldm4200-day Moving Avgg6Holdings Gain (ECN)
c1Changer1Dividend Pay Datem5Change From 200-day Moving Avgm2Day's Range (ECN)
p2Percent ChangeqEx-Dividend Datem6Pct Chg From 200-day Moving Avgi5Order Book (ECN)
cChange & Percent
vVolumeOption Quote Additions
mDay's RangeCodeDescription
j52-week Lowo1Open interest?
k52-week Highp3Type of option
w52-week Rangee3Expiration date
bBids3Strike price
b6Bid SizenName of option
a5Ask Size
note, the last trade quote is l1 (lowercase 'L' then the number '1')  (that drove me nuts for a while)
here's how it looks in my spreadsheet  =RCHGetYahooQuotes(+Z2,"l1")

This is only one small segment of the data,  The full excel list of all the data points available can be found here: and it is a truly phenominal amount of data.  Yes, some of it is repetitive but if you are looking for data on a security, start here.  

There's also an active message board if you have any questions on implementation:

Of course you can get one cell to refer to another, so one can populate quite a bit of data in a spreadsheet by just entering the symbol.  Best part is it's all free.  

I use the plug-in almost daily and would honestly be lost without it.  I suggest you give it a try as well.