Careful When Locking Horns

Posted on March 14, 2019 by macromon

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QOTD: Just The Facts Ma’am

Posted on March 14, 2019 by macromon

QOTD:  Quote of the Day

Judge Jackson

 

Court is one of those places where facts still matter – Judge Amy Berman Jackson,  March 13, 2019

Why do we believe Judge Jackson’s quote will be carved in stone, though the words may live in infamy?   Thank goodness, at least in her court, words and facts still have meaning.

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On This Day In History – March 14

Posted on March 14, 2019 by macromon

Birthdays

  • 1879 Albert Einstein, German-born theoretical physicist and Nobel laureate (theory of relativity), born in Ulm, German Empire (d. 1955)

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  • 1958 Danny Meyer, American restaurateur (Shake Shack, Union Square Cafe), born in St. Louis, Missouri
  • 1988 Stephen Curry, American basketball guard (NBA MVP 2015-16 Golden State Warriors), born in Akron, Ohio

Events

  • 1592 “Ultimate Pi day”: on this day at 6.53am is the largest correspondence between calendar dates and significant digits of pi, since the introduction of the Julian calendar (3.141592653)

TIH_Mar14_Pi Day

  • 1644 England grants patent for Providence Plantations (now Rhode Island)
  • 1794 Eli Whitney patents the cotton gin machine revolutionizing the cotton industry in the southern US states
  • 1801 Henry Addington becomes Prime Minister of the United Kingdom after his friend William Pitt the Younger resigns after being unable to persuade King George III of the need for Catholic Emancipation
  • 1889 German Ferdinand von Zeppelin patents his “Navigable Balloon”

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  • 1900 US currency goes on gold standard after Congress passes the Currency Act
  • 1904 In a landmark case, Northern Securities Company v United States, the US Supreme Court finds the company has violated the Sherman Anti-Trust Act; first case in T. Roosevelt’s ‘trust-busting’ campaign
  • 1907 By Presidential order, Japanese laborers are excluded from entering the USA
  • 1913 John D. Rockefeller gives $100 million [$2.533 billion in 2019 dollars] to Rockefeller Foundation

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  • 1923 US President Warren G. Harding becomes 1st president to pay taxes
  • 1958 South Africa’s government prohibits the African National Congress
  • 1964 Dallas, Texas; Jack Ruby sentenced to death for Lee Harvey Oswald’s murder
  • 1971 The Rolling Stones leave England for France to escape taxes
  • 1973 Future US senator John McCain is released after spending over five years in a North Vietnamese prisoner of war camp

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  • 1983 OPEC cut oil prices for 1st time in 23 years
  • 1990 Mikhail Gorbachev becomes president of the Soviet Congress
  • 2013 Xi Jinping is named as the new President of the People’s Republic of China

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  • 2017 World’s oldest golf club Muirfield in Scotland, votes to admit women as members for 1st time in 273 years
  • 2018 NASA twin study finds that Scott Kelly is no longer identical to his twin brother after one year in space, 7% of his genes altered
  • 2018 Angela Merkel sworn in for fourth term as German Chancellor, head of a coalition government, 171 days after the general election
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More On Brexit…

Posted on March 14, 2019 by macromon

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Question of the Day: British Parliament

Posted on March 13, 2019 by macromon

I am listening to the live debate in the House of Commons about the vote, which just took place voting down a “no-deal Brexit,”  321-278, close enough to make us a little nervous.  Some MPs are up in arms that the vote is “indicative” and not policy.

Does the will of the House trump the will of the people? – MP of British House of Commons

We ask you again, are you surprised that in our post-Truth world we live that all things are indicative, nothing matters, nothing is binding, alternative facts, fake news, and now fake athletes?

You can now redefine your child, for a $400K bribe, as a football placekicker, and get him into Stanford.  Man, I smell pitchforks on this one!  AOC will be on the warpath.

Article 50 Extension Vote Tomorrow

The House of Commons votes tomorrow on extending the Article 50 March 29th deadline to leave the EU.

You know where we stand.

Big buyers of cable (pound/dollar) all year,  as we believe the MPs will eventually have to take this debate to the people, which the remainers should win overwhelmingly.    Cable up almost 2 percent today and closing in on its 6-month high.   The pound is trading like an EM currency, now up almost 5 percent for the year, which is causing the export-heavy FSTE to significantly lag DM stock markets year-to-date.

Pound

Coming “Summer Political Discontent?”

There will be some political instability into a second referendum vote as the Brexiteers take to the street.  Depending on how things shape up with President Trump’s legal troubles,  we may be moving into a transatlantic  “summer of discontent,” where the U.K. and U.S. experience a bout of political and social instability.

Hey, we are always nervous and on the lookout for off-the-radar tail events.

Buy the French British dip in cable, and keep the above on your radar.

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Thank You, Mr. Gundlach

Posted on March 13, 2019 by macromon

In our Monday post, we stated,

Absolutely stunning to see such large budget deficits as far as the eye can see with the actual and projected unemployment rate under 5 percent. What kind of budget deficit beast will we run if we have a recession?  Will demand for Treasury securities be there to finance, say, a $2 trillion deficit? – GMM

Jeff Gundlach illustrates our concern in a chart from his presentation today, Highway To Hell 

 

Gundlach

What Does Ray Dalio Think?

Wow,  more than $2.5 trillion-plus in new Treasury issuance hitting the market during the next recession.  No wonder Fed Chair Jay Powell looked a little pale during his 60 Minutes on Sunday night.

Given the structural changes taking place in the Treasury market, we are not so sure the markets can absorb such a large supply shock, which would overwhelm even the massive increase in haven inflows into Treasuries during a recession.  The Fed would be forced to finance a yuuge portion just as they did indirectly during the first few rounds of QE.

The question is how will a new round of the effective monetization of potentially $2.5-3.0 trillion annual deficits impact confidence in/and the demand for the dollar? Especially after it is evident the Fed can’t normalize its balance sheet without a major market disruption even with a 3.8 percent unemployment rate.  Beijing and Tokyo, we have a problem.

This is how emerging markets get into trouble, folks.  Money demand collapses when  the citizenry and its foreign creditors lose confidence in their currency and central bank.  And ”confidence is a very fragile thing.”

Hedge fund great Ray Dalio also has some thoughts on the topic,

Billionaire hedge fund manager Ray Dalio predicted the U.S. economy is about two years from a downturn, which will see the dollar plunge as the government prints money to fund a swelling deficit…

“We have to sell a lot of Treasury bonds, and we as Americans will not be able to buy all those treasury bonds,” he said. “The Federal Reserve will have to print more money to make up for the deficit, will have to monetize more, and that’ll cause a depreciation in the value of the dollar.” 

…The currency may “easily” weaken by as much as 30 percent, creating a “dollar crisis,” he said, though the economic contraction won’t be as sharp or severe as it was after the 2008 financial crisis.  – Ray Dalio, Bloomberg, Sept 2018

That is just about Game Over, folks.   No one cares, anymore.

That is why we all should worry even more.

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On This Day In History – March 13

Posted on March 13, 2019 by macromon

Birthdays

  • 1913 William J. Casey, American head of the CIA during the Iran-contra scandal (1981-87), born in NYC, New York (d. 1987)
  • 1946 Yonatan Netanyahu, Israeli soldier who died leading rescue operation Entebbe in Uganda, born in NYC, New York (d. 1976

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  • 1950 Charles Krauthammer, American conservative political commentator and psychiatrist (The Washington Post), born in NYC, New York (d. 2018)
  • 1956 Jamie Dimon, American business executive and CEO of JPMorgan Chase, born in NYC, New York

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  • 1960 Adam Clayton, English-Irish musician and rock bassist (U2-I Will Follow), born in Chinnor, England

Events

  • 1639 Cambridge College, Massachusetts, renamed Harvard for clergyman John Harvard

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  • 1677 Massachusetts gains title to Maine for $6,000
  • 1852 Uncle Sam cartoon figure made its debut in the New York Lantern weekly

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  • 1868 Senate begins US President Andrew Johnson‘s impeachment trial
  • 1881 Alexander II of Russia is assassinated by members of far-left terror group ‘People’s Will’ who throw a bomb at him in the city of St. Petersburg
  • 1900 In France the length of the working day for women and children is limited by law to 11 hours.
  • 1918 Trotsky gains control of the Red Army
  • 1925 Tennessee makes it unlawful to teach evolution
  • 1933 Joseph Goebbels becomes Nazi Germany’s Minister of Information and Propaganda
  • 1943 Failed assassin attempt on Adolf Hitler during Smolensk-Rastenburg flight
  • 1954 Braves’ Bobby Thomson breaks his ankle, he is replaced by Hank Aaron

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  • 1957 Bloody battles after anti-Batista demonstration in Havana Cuba
  • 1986 Microsoft has its Initial public offering.

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  • 2005 Bob Iger is named CEO of Walt Disney International, succeeding Michael Eisner
  • 2008 Gold prices on the New York Mercantile Exchange hit $1,000.00 an ounce for the first time
  • 2013 North Korea shreds the Korean Armistice agreement
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Life In The “New Farm” Belt

Posted on March 12, 2019 by macromon

We know the farm belt is in crisis,

President Donald Trump’s trade war is magnifying some of the toughest farm conditions since the crisis that bankrupted thousands of farmers in the 1980s — and threatening a constituency crucial to his reelection hopes. – Politico

Here’s a look at some of the new farms rising up over the past few years.

 

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Corbyn calls for no deal to be taken off the table

Posted on March 12, 2019 by macromon

Parliament not there yet on a second refi but the path is becoming clearer.  The House of Commons votes down a “no deal Brexit” tomorrow (highly likely) and then votes to extend Article 50 on Thursday (highly likely).   Then what?

TINA – There is no alternative.   The MPs will have to take it to the people.

A buyer of cable on dips.

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On This Day In History – March 12

Posted on March 12, 2019 by macromon

Birthdays

  • 1685 George Berkeley, Irish philosopher/bishop of Cloyne

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  • 1922 Jack Kerouac, American Beat writer (On the Road, Mexico Blues), born in Lowell, Massachusetts (d. 1969)

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  • 1932 Andrew Young, US ambassador to UN (1977-79)/(Mayor-D-Atlanta)
  • 1947 Mitt Romney, 70th Republican Governor of Massachusetts and presidential candidate, born in Detroit, Michigan
  • 1948 James Taylor, vocalist/guitarist (Up on the Roof), born in Boston, Massachusetts

Events

  • 1455 First record of Johannes Gutenberg‘s Bible, letter dated this day by Enea Silvio Piccolomini refers to the bible printed a year before

TIH_Mar12_Gutenberg

  • 1642 Abel Tasman is the 1st European to sight New Zealand, viewing the north-west coast of the South Island
  • 1664 New Jersey becomes an English colony
  • 1848 2nd Republic established in France
  • 1913 Foundation stone of the Australian capital in Canberra laid
  • 1917 A German submarine sinks an unarmed US merchant ship, the ‘Algonquin’ on the same day that US President Woodrow Wilson gives executive order to arm US merchant ships
  • 1930 Mohandas Gandhi begins 200m (300km) march protesting British salt tax
  • 1933 FDR conducts his 1st “fireside chat”

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  • 1938 Nazi Germany invades Austria (Anschluss)
  • 1947 US President Harry Truman introduces Truman-doctrine to fight communism
  • 1951 Communist troops driven out of Seoul
  • 1956 Dow Jones closes above 500 for 1st time (500.24)

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  • 1999 Former Warsaw Pact members the Czech Republic, Hungary and Poland join NATO
  • 2012 China records its highest trade deficit in over a decade

TIH_Mar12_China

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