Archive for the ‘Uncategorized’ Category

Tariffs getting serious

Posted: September 18, 2018 in Uncategorized

President Trump unleashed another round of tariffs hitting even American  people. China has been answering quite softly – kind of wait and see approach for the US Congress (if Democrats wins the House, President Trump would be blocked).

But I would imagine that China patience is wearing thin – especially as Trump keep on saying….their market is a disaster, while ours is near the top.

Also statistically the US market loses before US Congress elections and then more than recover after the election.

So – time to be alert.

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US election – Congress

Posted: September 10, 2018 in Uncategorized

The all -important US Congress election are at the door.

 

My most likely outcome scenarios are

  1. Senate stay Republican and House goes Democrat. At current standing this scenario has 50% chances of happening. It is a positive scenario for stocks.
  2. Both Senate and House goes Democratic – this will be temporarily negative for the S market/bond/dollar. Apart hating Trump the Dems are not united on anything….so the backlash should be temporary. This scenario stands at 35%
  3. Both House and Senate stays Republican. This is an unlikely scenario (15-20%) that would favor Republican sectors (banking, defence etc) vs Dem stocks (Auto, infrastructure, hospitals)

I am not pro President Trump – but I am neutral – trying to stand by the facts.

Notwithstanding the media and the consequences President Trump is correct in attacking China whatever the consequences.

An unofficial document has been leaked from China, known has the Green Book. The Green Book details the underlying goals of the Made in China 2025 plan (which does not have goals) . The goals, if achieved, would virtually annihilate any tech and new technology competition in China. The goals is to achieve 56% of the world market of integrated circuits (so all technology) by 2025 and 80% of the entire domestic market by 2030.

This would bring a destruction (wipe-out level) of industries and jobs like it happened in steel and solar. Chinese companies backed by government subsidies, cheap funding from State Owned Enterprise and sometime dodgy behavior would wipe out the Western economies and Western jobs.

Unfortunately, the President is more right than President Obama and all the other leaders. It is a fight to the death.

End of Australian Democracy

Posted: August 20, 2018 in Uncategorized

Democracy is when a leader of a nation is elected by the people. Australia does not have an elected Prime Minister serving its full term since…John Howard (2007).

All the following PMs were “disposed of” by their own party peers. A bit like in a kingdom, when there is regicide. Well, at least for now we are more civilized about it.

From the latest news stream it seems that Dutton, Homeland security minister, is going to challenge PM Turnbull in the next two weeks  and Rupert Murdoch, the kingmaker,  arrived in Sydney the 10th August.

So PMcide is going to be committed soon.

Dutton, Minister for Home Affairs, is unfortunately famous for being racist and using wrong statistics to strike fear and push for a back to White Australia policy.

I am by no mean a libertarian – yes there is an issue with African gang – but they constitute only 27% of crimes – very far away from being a crime wave of African origin.

There is a violence issue, but it is more related to socio-economic issue (the majority of crimes are committed -50% of the State prison population comes from 6% of the state postcode (and 25% from 2% of postcode).

We have an amazing police force that catches most of the criminal and an appalling court system that releases most of them.

But if Dutton becomes Prime Minister we will have to stop teasing Trump as he is even worse.

Or maybe he is the Australian we need to have to wake up as citizens and really push forward some politicians that really care about Australians (wildfires, drought stricken farmers, mortgage stress etc) .

 

Advance Australia fair.

Yesterday was a telling day. The violence of the move (in relation to the crisis and data) has been stunning.

Telstra +6%, Iluka Resources close to -8%, Walmart +9% etc etc.

We are in a low volume period (between 15 August and 3 September, US Labor Day) and the machines are reigning supreme.

All commodities and related shares were under full pressure. Algos trading was around 85% of all trading
Why do I accuse the machines? Apart some data I am receiving – there are large discrepancy in the US/UK ADRs behaviors that are a tell tale – as the machines are working more on the US/UK markets.
BHP US  Australia -2.55% BHP London -5.22% and BHP US -4.82% (the difference is just the Pound vs USD)
Even more telling and with a real source is TENCENT
Tencent USA -10.22%
Tencent HK -3%
The only difference is that, as the China (and HK) market are down almost 30% – the Bank of China last week increased the deposits for short position in China related positions to 20% – so any machine attack in China has become 20% more expensive.
The Reserve banks should foollow China and regulate more the algos – or they will become the culprits of the GFC 2.
And as you know from the movies they will take no prisoners.

Gold and China

Posted: August 7, 2018 in Uncategorized

Gold has crashed badly in these last months. And it is still full on shorted.

Very few people noted the correlation between Chinese Yuan and Gold.

 

This is because the Yuan is pegged to an SDR Basket that contains gold.

China let the Yuan devalue as part of the trade war – but now is reaching the hard limit imposed after the breach in reserves in January 2016.

This new pattern started today as China increased to 20% the obligatory reserves for Yuan denominated derivative trading. So the pattern could soon invert.Capture Yuan Gold

 

ScalaPrivateW_NEWSLETTER -July 2018

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