Monday, November 7, 2011

China lending stats update -- The decline continues.

It has been over a year since I last highlighted the slow decline in official lending statistics out of China. Since then not much has happened regarding the direction of Chinese lending growth; a slow decline continues.

I point you to Steve Keen's debtwatch for why the rate of growth in lending is important.

The rate of lending growth peaked in October 2009 and has been declining ever since.  Compare this to the Chinese equity markets and you'll see how Chinese stocks haven't gone anywhere since October '09 either.


Unofficial lending is naturally harder to track but there are anecdotal signs of stress in this sector as well.    http://historysquared.com/ and http://www.alsosprachanalyst.com/ are two good sites to follow the 'underground' lending market.

Thursday, November 3, 2011

Hugh Hendry watch -- 5 part YouTube series from earlier this year

I find this episode of Hendry publicity a little different as he discusses his trading style and aspriations of what he wishes he could be as an investor. If you cannot watch the entire series I suggest you at least watch episodes 4 and 5. Realizing you don't know the future and how having too much knowledge can be detrimental really struck home with me.  If you study a company too much you can fall in love with the security, even as it goes down, down, down, and .... down.  Someday I may gather up enough courage to relate my failures in this category.












Thanks to Zerohedge

Tuesday, November 1, 2011

Mr. Bond (Market) is not impressed

Do I look impressed?
Even before the Greek referendum drama of the last 24 hours the bond market was not impressed with the latest Euro crisis 'solution'.

With Portugal, Ireland and Greece all tipping over the edge the next domino to watch is Italy.

Last week's news of a 50% 'voluntary' haircut for some Greek debt vaulted world equity and currency markets higher in a massive relief and short covering rally.  Mr. Bond market was not so impressed.

While both the absolute and relative yield of Italy's 10 year bond did fall a bit late last week on the news of the news of a new solution to the Greek debt situation announced Thursday morning by Friday afternoon Italian yields were creeping upwards again.
The German/Italian 10 year spread has blown out to new highs


Very close to breaking recent highs

The news of a Greek referendum on the latest round of negotiations shocked the markets and drove almost every risk asset downward with only the dollar and US Treasuries rallying. Italian yields are not looking good from a technical perspective and if they break 7% it could be the final domino to fall before the real euro crisis starts.  I'll be watching these metrics closely.


Linkage roundup

Some reading material for you from my twitter stream:


RT @edwardnh: Why the latest eurozone bail-out is destined to fail within weeks - Telegraph http://t.co/sgj8HQcn
RT @credittrader: GReader: The Global Moral Hazard Dawns: Merkel Says "It Must Be Prevented That Others Come Seeking A Haircut" As... http://t.co/Tjd22kbQ
RT @theanalyst_hk: $$ Jim Chanos: Not Impressed By The Europeans, And Still Shorting #China http://t.co/OvdXeWIr #economy #europe
RT @JackHBarnes: Chart of the Day: North Dakota Annual Oil Production: http://t.co/lUWOqWst -- need to do more research myself on shale oil
Transfer payments over time in US http://t.co/sxiw6sF8
RT @zerohedge: And Now, For Some Semblance Of Sanity, Here Is One Hour Of Hugh Hendry http://t.co/5A5Jwgxu -- separate post on this soon(tm)
CITI: Failure To Trigger Greek CDS Could Cause The Whole Euro Bailout To Fall Apart http://t.co/TLDjUF7L -- be careful what you wish for
Meanwhile in China a swan finally takes flight... http://t.co/Z8w40PKd -- Condo prices are falling hard.
RT @AlephBlog: Fannie Squeezing Banks Makes 4% Mortgage a Mirage, Hinders Housing Rebound http://t.co/BKikceRX Higher lending standards fight lower rates
RT @AlephBlog: Money managers and commodities, the case against http://t.co/ynsn1qT3 Graph shows $$ managers drove commodity prices http://t.co/eNKE3nFA
RT @andrewyorks: *EU LEADERS CALL FOR BANKS TO HAVE 9% CORE CAPITAL LEVEL ok move that dial on the upper left to 9 http://t.co/WHLMk6Dm -- should be interesting when taking haircuts on Greek debt.
Skyscraper taller than any in London or Tokyo opens in Chinese village of 2000. http://t.co/IvHoRw4j #thiswillnotendwell
Underground bank lending in China - NPR - http://t.co/677IPKYK
RT @historysquared: $$ The cash commodity trading firms that account for 1 trillion in annual revenue 50% of all transactions http://t.co/TqTvhHM1
RT @ftasia: Iron ore plummets to 15-month low: As Chinese steel mills cut production, the price of iron ore dropped 7.2 per ... http://t.co/RVfC48zy
Blackberry outage made roads safer. http://t.co/agSNxNGX

Wednesday, October 26, 2011

Linkage roundup

Some reading material for you from my twitter stream:


RT @zerohedge: "It was grim. The worst mood I have ever seen, a complete mess," said one eurozone finance minister. http://t.co/NnHreVRK


RT @TBPInvictus: My fave homemade chart on labor market slack and why inflation's a long way off: http://t.co/BKBGjFeO #FRED


RT @FactSet: What do yield curves tell us about the outlook for the world #economy? We take a look: http://t.co/r4ucgUfl -- Inverted Yield Curves are bad....


RT @simonsinek: Blow Up Your Business Before Someone Else Does http://t.co/rqdZ8GEW 


TED spread going the wrong way -- http://t.co/6vmUhc60


RT @EpicureanDeal: This Switchblade drone is scary as hell: http://t.co/buFmf6BF Long-distance, remote-controlled , tightly targeted antipersonnel munitions.


Good commentary by GaveKal on the current european situation. http://t.co/9zYX6Wgj


RT @BreakingNews: Biographer says Steve Jobs refused early and potentially life-saving surgery on his pancreatic cancer - @CBSNews http://t.co/YFX7AJOo


RT @NicTrades: FT: French banks curbing credit lines for commodities trading http://t.co/62sZhIkB -- What do you think will happen to all the base metals when Greece goes POP!  ??


#copper getting crushed today. Will it completely break down or bounce off the bottom again? http://t.co/2h0LKT31 -- looks like it bounced.


Italian bond yields going wrong direction. http://t.co/6TP2ixgp


RT @lessig: Ben Smith is brilliant: An Occupy Wall Street/Tea Party Venn diagram http://t.co/AWNNhlBg #rootstrikers #tpp

Tuesday, October 25, 2011

Ray Dalio on the challenges in front of us

Ray Dalio of Bridgewater Associates has recently appeared on the Charlie Rose show as well as written a piece for the Financial Times. I think he does a good job of describing how we got here (continually borrowing money to improve our standard of living) and the tenuous situation we find ourselves in (Greece, falling home prices, etc.)

From FT.com

We are in the midst of a deleveraging, we are nearly out of ammunition and we are at each other’s throats. Being in a deleveraging and nearly out of ammunition is a very difficult position to be in. But, being at each other’s throats is our biggest problem.
Our character and our political and social systems are now being tested in ways that have typically been tested in past deleveragings. In deleveragings bad economic conditions typically lead to emotional reactions, social and political fragmentation, poor decision-making and increased conflict. When this occurs in democracies, the checks and balance system, which is intended to yield the best decisions for the whole, can stand in the way of thoughtful leadership and lead to ineffective “mob” rule. This dynamic can lead to a self-reinforcing downward spiral.
The video goes into a little more detail of his philosophy of knowing what you don't know and being willing to have your ideas and conclusions challenged throughout the corporate structure.  I suggest you read both the article and watch the interview.

Thanks to The Intrigued Trader and Also Sprach Analyst

Thursday, October 20, 2011

Linkage roundup

Some reading material for you from my twitter stream:

RT @pdacosta: World's first malaria vaccine works in major trial http://t.co/XLq02ns1

Custody of your assets is ALWAYS important, no matter what... http://t.co/ynICJv56

RT @planetmoney: New podcast: The price of default. Argentina's default in 2001 offers a cautionary tale for Greece. | http://t.co/levA26eW

RT @niubi: China reveals size of copper inventory - http://t.co/qUyGrZgW http://t.co/LdEoxqtr huge news $$


RT @NicTrades: Japan 'offers 10,000 free trips to foreigners' in an attempt to boost tourism - Telegraph http://t.co/9nJb9dxo


Paging radioactive swan, paging radioactive swan... http://t.co/jRDpJ4Ug


From @ProfSteveKeen We are still screwed and the Doctors have no clue what's wrong http://t.co/G55dEaCJ HT @stacyherbert


Worried about radiation? There's an app for that. http://t.co/3zSl9mut


Prehistoric kids left marks in caves. http://t.co/0uyyp620