Archive for May, 2016

Well another Conspiracy Theory came out of the closet! How Saudi owns the US. Until now.

Bloomberg – The Untold Story Behind Saudi Arabia’s 41-Year U.S. Debt Secret

Well when all seem good Turkey and West are quickly falling afar

Europe various parliaments are literally balking at the idea of a free VISA for Turkish people.

Turkey does not want to change the terror law to suit Europe and Europe is not giving up.

The issue is much deeper than that. With 75 million Muslim population the agreement could literally change the face of Europe in the next 10 year…from Christian to Muslim.

Iraq; Turkey went literally mad to see US Special forces embedded with the Kurdish forces (labelled terrorist by Turkey) and wearing Kurdish badges.

Syria: again there is an issue as the US support the YPD (Kurds again) while Turkey supports salafist groups like Al Nusra (Al Qaeda in Syria…but it is trying to separate itself from the Al Qaeda franchise). Turkey is much more preoccupied in stopping the Kurds advance than dealing with IS.

Meanwhile Russia is planning for revenge (against Al -Nusra apparently) in retaliation of the terror attacks in Tartus.

The unholy alliance US(West) Turkey seems stillborn.


This morning I got quite upset when I heard the President Obama speech in Hiroshima about “never again nuclear war”.

Such a lie.

During President Obama there has been an extreme push to update and upgrade the nuclear arsenal, even with supposedly clean (so usable) nuclear bombs. Over USD 1 trillion has been spent on it since 2014 – the biggest sum after the end of the Cold War

The US is maintaining circa 1,900 nuclear warheads.

  • Upgrading and refurbishing the ICBM Minuteman (all of them)- land and marine version
  • Creation of a “mini” nuclear smart bomb delivered by fighter jets (B61 Model 12). This bomb has been deployed in 2015 to the Buchel Airbase in Germany (first time a new nuclear warhead has been deployed in Europe after the fall of the USSR)
  • A B61 nuclear bomb with a “dial a yield” function (it can decrease the yield down to 2% and up to 100% – depending on target)
  • Development of a nuclear capable advanced cruise missile
  • President Obama is pushing for the developments of the hyper-sonic first strike missile (Prompt Global Strike)

The much criticized President W Bush reduced the nuclear weapons from 10,000 to 5,000 – President Obama from 4,950 to 4,700(Source Federation of American Scientist) – but much more modern…compact and “usable”.

And Hillary Clinton will follow his lead.

The Russian and Chinese are doing the same – but at least they do not tell lies.


Well – the markets keep surprising all of us – by going higher.

It did surprise also me – as I m quite busy in setting up some models and systems…even if I wrote  few month ago the solution of the conundrum.

I wrote that Crowded Trades (where everyone thinks and does the same in the last two years does not work in this period).

Since start of April, everyone and his dog has been very bearish on the market and bullish on gold. Once every one thinks like that, the market goes in reverse.

Until when? Until, like now, people are starting doubting their bearishness or their idea of being long gold – which could last well into all June.

Remember what happened in December…everyone was scared of the Fed hike….the Fed hiked…all went well for the next 10 days and then January started the killing fields.

The market could well behave like this until the days after the 23 June Brexit – and then go for a kill.

Or if you want to be less sanguine – SP500 2,040 to 2,130 NOTHING HAPPENS (or ASX200 5,000/5,400 or Gold USD1,200/USD1,300) – it is a simple consolidation pattern (weakening as, between others,  there had been no breach of the top, till now, and an intraday breach, of the bottom support).

So hold on to your beliefs and don’t chase swinging modes, we are in uncharted territories after all. As in the old maps “Here be Dragons” (or more correctly ‘Hic Sunt Dracones’ from Latin)

Capture Bull Bear.PNG

The blatant start of the end of the European democratic experiment rightfully started in Greece – where the government did not abide to the referendum.

It continued with Portugal and now Austria.

The votes have been decided by postal vote which shows a massive swing to the ‘correct’ candidate (in the general vote the Right Wing candidate was on average on 58% while in the postal vote was about 38%).

Sick of conspiracy theory?
In the city of Waidhofen van der Ydbs the Green candidate won by circa 700 votes. 146.9% of voters casted ballot (yes registered voters 9026 -processed votes 13262).

Still do not believe it? Here the Austrian government website that google can kindly translate for you. And I just found this just searching the net. Imagine what else.

Let’s see it if it needs to happen also in the UK where the fear campaign is having great success.

In various occasion I wrote this same post…and in various occasion after a little while the market tanked.

The bond market is entirely made by professionals – so there is not “sentiment” or running for yield. It is a pure logic play.

The US yield curve is flattening (the short term US note is approx 0.8% and the 10 years is 1.8%)…a difference of 0.9% – lowest since December 2007.

When the curve inverted (2 year note with a yield higher then the 10 years ) the USA   ALWAYS went into recession (well apart 1998, but it inverted for a very short time – a false signal)

Now with this low yield environment is really hard for the yield curve to invert – so we could get a recession just with a flattening yield.

Not to be too pessimistic, a flat curve yield could be just a signal from the market to the FED that hiking interest rates  in June is a policy mistake as the economy is not strong enough and the real scenario is muddle through and not economic growth, as the politicians would love us to believe.

Anyway…another data point to add to the watchlist

Federal Reserve emergency?

Posted: May 21, 2016 in Uncategorized

In April the Federal Reserve a unscheduled meeting and then requested a ‘secret’ meeting with the US President and the Vice President (picked up only as someone went through the US Presidential schedule).

Nobody knows what it is and what they discussed. But definitely is out of pattern.

Then in May the FED starts to jawboning the market into thinking there is a rate hike and that it does not exclude negative rates.

I do not know, but it could simply be that the Fed is running out of ammo for real or it has to do something that hurts the market to save the economy.

Weird anyway.

Share Market Supports

Posted: May 20, 2016 in Uncategorized

The Fed speak hawkish and the market already start to panic…the usual.

There is two connotation to this

  • Market is addicted to support, but the FED needs to look at the economy and it needs to create ammunition in case there is a US recession.
  • China stabilized only because the USD got weaker – a rate hike will strengthen the USD (the Yuan is pegged) and wreak havoc again in China which will have to devaluate – already, just after the Fed speech, the USDCNY spiked to 6.55) re igniting the August 2015 issue.

So what are the supports now?

SP 2040/1,990. After that there is 1,940 and then the infamous 1,830

oil (brent) is USD$42 and USD$32

Gold is $1250. But if it consolidate above USD1,200 a flag to 1,280 indicates a bullish movement ($1,300-1,500)

ASX 200 respected 5,400 – the support is at 5,200 and 5,000 – baseline is at 4,600


The car revolutions

Posted: May 18, 2016 in Uncategorized

This article should be read with my previous posts.

First Volkswagen has a pollution scandal, then Mitsubishi and now Suzuki have different scandal (fuel consumption levels).

Fiat, Opel (GM Group)Peugeot are under investigation. BMW and Mercedes launched their own internal investigation.

All the car world seems under investigation.

This fact with the rise of Tesla (which, by launching the Model 3, attacks the most lucrative German brand market) and the future incoming of Google and Apple….will change the world as we know it.

Think about the various potential consequences

  • Car production shifting from Europe (Germany) to US and probably China
  • Oil becoming obsolete
  • States needing to change the car taxation as they lose the massive amount of tax from fuel (most likely from fuel consumption to pay per use/kilometer model)
  • Arabic states loosing the oil pricing power (probably becoming more and more like Africa…where millions dies, but nobody cares as there is no oil)
  • Millions more unemployed in Germany

so many consequences the above just scratches the surface. And all this scandals are accelerating the transformation so fast you will not recognize the industry in 5 year

The US Senate voted YES in a bill that will let 9/11 victims sue Saudi Arabia for its alleged involvement in the terror attack.

This is a major slap in the face to President Obama that is even threatening to veto the bill to ..well I have to say…to protect Saudi Arabia.

I do not know if the veto will be used, simply because it could seriously damage the fellow Democrat Hillary Clinton. Definitely it will not damage Trump as probably he will be the first to sue Saudi Arabia, just because he can!

Saudis have issued all sort of economic threat (a classic rhetorical question -why so worried, if you are innocent?), some of them tantamount to mutual assured economic destruction (Saudi and US).

Now the bill moves to the House.