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.

Update:  https://blog.pimco.com/en/2017/05/A%20Less%20Impulsive%20China%20Bracing%20for%20Lower%20Growth

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.

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.

http://www.bloomberg.com/news/videos/2016-06-15/chanos-easier-to-find-short-ideas-as-bull-market-goes-on

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:

https://www.iborrowdesk.com/

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

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.

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.

ft.com 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.

source: http://www.macrobusiness.com.au/2016/04/hugh-hendrys-long-dark-night-of-the-soul/

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

source: http://www.eia.gov/electricity/monthly/update/resource_use.cfm#tabs_con-3

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

disclosure: No positions, either long or short.

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.  

http://ogres-crypt.com/SMF/

http://ogres-crypt.com/SMF/Tips-and-FAQs/

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

Basic Quote		Fundamentals		Technicals		Estimates		Real-Time (ECN)
Code	Description	Code	Description	Code	Description	Code	Description	Code	Description
s	Symbol	j1	Market Capitalization	a2	Average Daily Volume	t8	1yr Target Price	k1	Last Trade (ECN with Time)
n	Name	f6	Float Shares	t7	Ticker Trend	e9	EPS Est. Next Quarter	b3	Bid (ECN)
p	Previous Close	r5	PEG Ratio	j	52-week Low	e7	EPS Est. Current Yr	b2	Ask (ECN)
o	Open	p5	Price/Sales	j5	Change From 52-week Low	e8	EPS Est. Next Year	c6	Change (ECN)
h	High	p6	Price/Book	j6	Pct Chg From 52-week Low	r6	Price/EPS Est. Current Yr	w4	Day's Value Change (ECN)
g	Low	b4	Book Value	k	52-week High	r7	Price/EPS Est. Next Yr	c8	After Hours Change (ECN)
x	Exchange	r	P/E Ratio	k4	Change From 52-week High			j3	Market Cap (ECN)
l1	Last Trade (Price Only)	e	Earnings/Share	k5	Pct Chg From 52-week High			r2	P/E (ECN)
l	Last Trade (With Time)	j4	EBITDA	m3	50-day Moving Avg			k2	Change & Percent (ECN)
d1	Date of Last Trade	s7	Short Ratio	m7	Change From 50-day Moving Avg			v7	Holdings Value (ECN)
t1	Time of Last Trade	d	Dividend/Share	m8	Pct Chg From 50-day Moving Avg			g5	Holdings Gain & Percent (ECN)
k3	Last Trade Size	y	Dividend Yield	m4	200-day Moving Avg			g6	Holdings Gain (ECN)
c1	Change	r1	Dividend Pay Date	m5	Change From 200-day Moving Avg			m2	Day's Range (ECN)
p2	Percent Change	q	Ex-Dividend Date	m6	Pct Chg From 200-day Moving Avg			i5	Order Book (ECN)
c	Change & Percent
v	Volume	Option Quote Additions
m	Day's Range	Code	Description
j	52-week Low	o1	Open interest?
k	52-week High	p3	Type of option
w	52-week Range	e3	Expiration date
b	Bid	s3	Strike price
b6	Bid Size	n	Name of option
a	Ask
a5	Ask 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:  http://ogres-crypt.com/SMF/Elements/ 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:

https://groups.yahoo.com/neo/groups/smf_addin/info

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.