Posts

Money Market

Expect Higher Correlations And Volatility In This Fed Manipulated Market

We’re trading in some truly interesting times.

Check out the index below from Credit Suisse depicting contagion risk across global markets and asset classes. It’s now showing that global markets and assets are at their highest correlation since the index was created. Read more

Thanksgiving

Marxist Bubbles And Taleb’s Turkey: It’s Going To Be An Awkward Thanksgiving

Over a third and growing quickly. That’s the share of the market that’s now comprised of blind sheep passive indexers.

That much passive money is nothing to sneeze at. Call me old-fashioned, but I was originally led to believe that the function and role of markets in a capitalist society was to direct capital to its most productive end — you know, Smith’s “Invisible Hands” and the productivity/profit link and all that jazz.

So what happens when instead of being deployed by thinking profit-driven investors… a growing portion of a nation’s savings are invested with the same diligence generally utilized by a co-worker choosing donuts for his office mates: “Umm…yeah, I’ll take two dozen of whatever you got? Read more

Short Airline Industry

I Am Serious (About Shorting Aircraft Lessors)… And Don’t Call Me Shirley!

Short Aircraft Lessors

We can’t help but think of the classic 80’s comedy Airplane! when talking about aircraft lessors. The story here is just as funny. And it’s not a new story either. It’s the same thing we see over and over again. The repetitiveness is what makes us laugh.

What exactly are we talking about? We’re talking about excess. We’re also talking about piss poor planning. These often times seem to be the qualities embedded in every top level executive. Read more

Why Banks Are Being Taken To The Woodshed

U.S. financials have been taken to the woodshed over the last month.

Many bank stocks are either in a bear market, or very close to one. They look disastrous from a technical standpoint. As you can see in the charts below, various banks have formed long-term topping (bearish) patterns that indicate a likelihood of further downside.  Read more

MLPs: A Great Opportunity In The Near Future, Just Not Yet

MLPs: A Great Opportunity In The Near Future, Just Not Yet

  • Shares of various MLPs have been battered over the last year.
  • It’s a classic case of the baby being thrown out with the bathwater. Attractive MLPs with strong balance sheets have been sold indiscriminately along with over-leveraged operators.
  • Soon investors with dry powder will be able to pick up excellent MLP assets for pennies on the dollar.

Crude continues its relentless march downward, blowing through predicted bottoms and calls for reversals. Its fall has surprised many and devastated a few. For us, this has been completely expected. We’ve been calling for $20 oil since 2014. We know this downward trend won’t be over until there’s blood in the energy streets… total capitulation… which is why we have our target for oil at $16/bbl.

All is not doom and gloom though. For the investor who is patient, there will be some amazing opportunities available in the oil and gas space in the coming months. Read more