Victims of the Boom-Bust Cycle

The world is drowning in steel – there is huge overcapacity in steel production worldwide. This is a direct result of the massive global credit expansion that has taken place over the past 15 years. Much of this capacity is located in China, but while the times were good, iron ore and steel production (and associated lines of production) was expanded everywhere else in the world as well.

 

steel-1Steel factory

Photo credit: Laurentiu Iordache

 

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The Dollar Increases in Value

The dollar moved up, though most people would say gold fell about $40, and silver 32 cents. In the mainstream view, the value of the dollar is 1/N (N is the quantity). So how could the dollar go up? Certainly, the quantity keeps on increasing.

 

1 buckThe buck.

 

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Rolling Back 200 Years of Growth

BALTIMORE, Maryland – The press reported mixed financial news on Thursday. House sales, oil, unemployment figures… up, down… the news left investors puzzled.

 

trump-sanders-300x162Two of many symptoms of the much-bewailed “populist backlash”…

Image via economyincrisis.org

 

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Tesla Goes Fishing

Tesla Motors is up to something remarkable.  But what it is, exactly, is unclear.  According to the Tesla Motors website, the company’s mission is: to accelerate the world’s transition to sustainable transport.

 

tesla-model-3Tesla Model 3: the company’s first “mass market” entry so to speak, which is supposed to help the world to reach the nirvana of  “sustainable” transport. On the side, it is helping a number of Wall Street firms to increase their commission income.

Image credit: Tesla Motors

 

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Geniuses in Charge

BALTIMORE, Maryland – Is there any smarter group of homo sapiens on the planet? Or in all of history? We’re talking about Fed economists, of course.

 

danger_-_genius_at_work_0-pngNot only did they avoid another Great Depression by bold absurdity…giving the economy more of the one thing of which it clearly had too much – debt. They also carefully monitored the economy’s progress so as to avoid any backsliding into normalcy.

 

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Yellen Looms

We’ve got a bit of a double whammy going on today in that it’s the last session before the long weekend plus Yellen is scheduled to speak late in the day. So it’s probably fair to say that few of us are going to be doing much on the trading front and I wouldn’t be surprised if most of you are already on the way out.

 

hitting_the_roadOff we go…

 

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Capo for Life!

The people of Tajikistan love their president Emomali Rahmon deeply. And as we now know, nearly all of them do. The last time a leader of similarly exalted stature enjoyed such unconditional and unshakable support from the entire citizenry was when comrade Joseph Vissiaronovich Stalin was in charge in Moscow. They’re feeling the Rahmon in Dushanbe!

 

Da BouncerLook at him! How can one not love him! Below the modestly sized image of dear leader Emomali Rahmon, the citizens of Dushanbe are partying to express their joy at the outcome of the recent referendum.

Photo credit: AFP

 

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Not Just Wrong, but Monumentally Wrong

Massive flaws at SUNE (Sun Edison) + VRX (Valeant) were somehow missed by both of these high profile/ well resourced hedge funds.

 

einhorn-ackman-660x330David Einhorn (Greenlight Capital) and Bill Ackman (Pershing Square) – both fund managers had a terrible year 2015 (down about 20% each), but while Mr. Einhorn has changed his way and righted his ship so far in 2016, Mr. Ackman stubbornly stuck (and at one point even doubled down) on his biggest losing bet. As of early March, the performance spread between the two managers in 2016 had widened to 2,400 basis points in favor of Mr. Einhorn.

Photo credit: Brendan McDermid, Eduardo Munoz / Reuters

 

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Cold Spells

My favorite quarter of the year is slowly drawing to a close, with Memorial Day in the U.S. marking the beginning of the long awaited vacation season. It’s been a long winter and we haven’t really seen much of a spring over here in the Mediterranean to be honest.

 

spring_landscape-1000x600The spring, as it is supposed to be…

Photo credit: Achim Thomae

 

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Who Cares What Voters Want?

BALTIMORE, Maryland –  There were two newsworthy developments last week, neither of them really important – the first because it won’t happen, the second because it won’t matter. First, the Fed let it be known that it has “normalcy” once again in its sights.

 

Moral compass and career path concept with a human head and a compass as a brain on a grunge old parchment textureIt’s all in your head…and that’s where it shall remain!

Illustration via thesurvivalchannel.com

 

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A Science Goes Astray

Human beings have a strong tendency to look for patterns. The natural sciences have shown that the universe is governed by laws, the effects of which are observable and measurable in an objective manner. Mostly, anyway — there is, after all, the interesting fact that observers are influencing measurements at the quantum level by the act of observation. (For our lives in the “macro” world, however, this is not relevant. An engineer does not need to take relativity or quantum physics into account to construct a machine that works.)

 

machineIs the Economy a Machine?

 

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Gassy Hacks and Big Quacks

Today, we recall the “commencement” at the end of four years at the University of Vermont. The university itself is imposing and a little intimidating. The rest of the world works in warehouses or common office spaces. Academia labors in hallowed “halls” and prestigious “centers.”

 

vermontThe path to the hallowed halls of the University of Vermont

Photo via hercampus.com

 

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