Davos – The Collapse in TRUST
The most telling sign that we are headed into a real political-economic shit storm is the fact that “TRUST” is collapsing on all sides. Every chance Obama gets he wants to disarm Americans. Why? This is simply because government is in trouble and they no longer “trust” the people. Likewise, the “rich” are starting to withdraw their money from investment that would create jobs because they too are worried about the rising discontent among the majority of the population. Then we have the collapse in
trust” among the people of anyone who is a career politician. So welcome to the theme of Davos – the collapse in “trust”.
trust” among the people of anyone who is a career politician. So welcome to the theme of Davos – the collapse in “trust”.
Snow in Hong Kong? No Possible Way. Or Maybe?
Some people have asked why did I bother to follow weather? I became a partner in a firm called Strategic Weather to do long-term forecasting, which today isPlanalytics which is geared to forecasting weather for business. The database on weather was put together and formed one of the largest in the country. Weather has played a key role in migrations and the rise and fall of nations. I have warned that we are entering a period which is summed up best as – the Age of Whatever Can Go Wrong – Will Go Wrong.
From a weather perspective, our long-term models at PEI project that we are heading into a mini ice age – not global warming, and it has nothing to do with emissions. This is a natural cycle whereby the energy output of the sun collapses. This week, temperatures plummeted in Hong Kong. They were even talking about snow, which I am not sure anyone has ever seen in my lifetime. This is the Maunder Minimum & the Coming Mini Ice Age. It is blistering cold right now in New Jersey. We have to comprehend that this is like a crash of the stock market from a 1929 high. It will be rapid and by no means gradual. By the time we look back at this in a few years, we will be willing to pay taxes for global warming to heat things up again.
Market Talk January 19th, 2016
Overnight the Chinese data the whole market was waiting for actually missed on the estimate (forecast was 6.9 but actual came in at 6.8) but all was forgiven after the PBOC injected more liquidity combined with rumours of additional supporting measures! Shanghai Index loved the move and returned a 3% daily push. In Japan the Nikkei did not do so well as it continued to flirt with the psychological 17k mark. By the time the European markets opened all had been forgotten and futures were calling for 1%+ bounces on most exchanges. Even oil was reflecting the positive energy (aiding stocks) with Brent trading over $30.25 (+2%). All core Indices traded around unchanged all day but by close of business the nerves had returned and dealers turned defensive again. The US markets were no exception, despite seeing positive numbers earlier in the day, all exchanges backed-off at the end of the day (DOW +0.17%, S+P +0.05%, and NASDAQ -0.26%).
Concerns around the prospects of a global slowdown continues and oil remains the culprit everyone is willing to sell. We did see early positive signs but in late trading yet again dealers do not wish to run overnight inventory. Last prices seen were WTI $27.65 -2.85% and Brent $28.25 -1.8%. Even the gold is losing a little of its safe-haven status with todays bounce only just exceeding the $1090 price last seen.
That was not true of the US Treasury market however where once again we are seeing the 10yr again playing with the 2% level. The same could not be said about the European Bond markets where we are starting to see the US/German spread start to gain traction. The peripheral spreads are also worth keeping an eye on still as the move looks ever closer. 10yr Italy closed this evening at 1.54% (with German 10yr last seen at 0.55%).
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