Friday, May 27, 2011

Global inflation here we come

Super Inflation © fintag

News comments:
Japan is on the verge on inflation.

This headline is quite alarming because after years of printing money QE style, almost zero interest rates, all in an attempt to kick start an economy, they have achieved inflation (bloomberg)

Along with QE from the Fed and ECB, the money supply is looking too healthy and prices are starting to rise.

A day of cheer? That is for another blog post.

Today's shorts:
Royal Wedding Boost (reuters)

Today's longs:
Messi Bonus Day (bloomberg)

Gossip:
Greece to be put for sale on eBay.



Monday, May 23, 2011

The QE PIIGS

PIIGS © fintag

News comments:
What with Greece defaulting, Young Spaniards sleeping on the streets and Italy denying it has any problems, the Credit Rating Agencies are slowly but surely destroying them. Ireland has somehow been beaten to death but is in a coma. These other countries will soon be following the same fate.

This news drags on and on, as does the QE in the USA.

The knock effects of printing money has been a commodity bubble and oil being at stupid prices given the supply is absolutely fine.

Will the new IMF leader please decouple the US dollar from the price of commodities? The US are screwing it up for the rest of the world.

Today's shorts:
Bernanke to keep staring into the light (bloomberg)

Today's longs:
Italy prepares to nuke Germany (reuters)

Gossip:
IMF staff to be forced to become celibate.



Tuesday, May 17, 2011

King: A man who hasn't a clue

Mervyn King © fintag

News comments:
You know my views.

Mervyn King and the MPC should have retired years ago. One moment we hear inflation is under control and the next it is not. The next moment we hear interest rates will stay low and then they will have to go up very soon.

The markets of course love this but patience is running thin. As we keep arguing, inflation is a killer and interest rates have to go up. The UK must put CGT on real estate for bricks and mortar do not create wealth in the long run.

(Image viral created Sept 2007 ...nothing changes then does it?)

Today's shorts:
UK Inflation 4.5% (bloomberg)

Today's longs:
Mervyn King says rates to stay low on May 2, 2011 (mortgagestrategy)

Gossip:
Mervyn King to play Peter in Peter and the Wolf.



Monday, May 16, 2011

America runs out of money

American Jobs © fintag

News comments:
So the Greek people are no longer paying on the buses and trains and anarchy is setting in. Not that we get to hear much about it. In Germany they are still complaining about their unification tax and are talking about the new Greek tax. In return they are looking to turning Crete et al into a German holiday country and it looks like non Germans who visit Greece will have to pay an entry fee.

The Sofitel crisis is nothing compared to the US maxing out on its credit card.

Not good. Not good at all.

Today's shorts:
MBNA says no (telegraph)

Today's longs:
Hedge funds are a young persons game (efinancialnews)

Gossip:
Europe offers to bail out the USA.



Thursday, May 12, 2011

A bad day for IT

IT = This © fintag

News comments:
Inside Trading is a curse of the markets.

It is also very difficult to define and control and for laissez faire capitalists it is not a problem. The regulators and current opinion take a different view and have taken down a hedgie who through his actions has tarnished others.

The man in question has been a scapegoat. Let us hope the institutions who sold the inside information are prosecuted too. Unlikely of course.

Today's shorts:
Australia: the next big bubble to crash (bloomberg)

Today's longs:
Greece descends into anarchy (reuters)

Gossip:
Madoff to share cell with new inmate.



Wednesday, May 11, 2011

HSBC - Too big to regulate

HSBC

HSBC © fintag

News comments:
Rumours of mass firings at HSBC are being firmed up.

HSBC has been keen to leave the UK but it isn't that simple. The road map plan was to slim down the UK operation and expand overseas where regulation and tax were more friendly. Unfortunately, Hong Kong its old home has said it is too big for them to regulate and the FSA are saying we have to give you permission and we will not because HMRC and the Treasury are saying you will have to pay lots of capital gains tax and we will generally make life very difficult.

So we have banks that are too big to fail and too big to regulate.

What a mess!


Today's shorts:
Regulatoe complains about the work load (cityam)

Today's longs:
HSBC to save money (cityam)

Gossip:
HSBC to move to the Isle of Man and regulate itself.



Monday, May 9, 2011

Germany fights to save Euro

Euro

Euro © fintag

News comments:
Let's face it the Euro is only surviving because the Germans have no other choice.

The recent animosity in Germany against the southern countries who were seen to be free riding the Euro appears to be abating. Germany, and France, have realised it is better for their economies if the Euro is kept in place.

So we are seeing an ECB being asked to control the PIIGS by all means possible. If they default, they default. The price will be a sort of short term imperialism where assets are ceased as collateral and its people kept down by the threat of poverty if they demand to leave the Euro.

The Euro is here to stay.

Today's shorts:
An apple a day keeps the google at bay (reuters)

Today's longs:
Euro is number one (bloomberg)

Regulation is expensive (hedgeweek)

Gossip:
California to join the Euro.



Friday, May 6, 2011

Master China and Puppet USA

China

China © fintag

News comments:
It has been on the cards for a few years now.

China is a back door imperialist. It prefers to control countries through economic means, like a large supermarket controlling a dairy farmer's milk production. Many parts of Africa are now controlled by China and Australia is succumbing to a huge influx of Chinese capital. This is part of a long term plan of world domination.

Meanwhile China has its hand around the testicles of America. It owns huge amounts of US debt and is watching carefully at its holdings (bloomberg). It wants the yields, it wants the currency. It wants to keep its currency artificially low and own commodities. The US want it to revalue the currency and sort out its human rights.

China has the upper hand and is playing the long gain.

Today's shorts:
Human Rights (AP)

Today's longs:
Chinese sex to cause price inflation (reuters)

Gossip:
RBS to be renamed ITB (Irish Toxic Bank) (reuters)



Glencore blimey

Commodity

Commodity © fintag

News comments:
Glencore.

Not much more can be said except monopoly, power, long hard graft and an IPO at the top of a huge commodity bubble that they are responsible for. But that is unfair. The creation of a few billionaires is a fantastic achievement. (evening standard)

There is a lot of unused cash out there and much will be hoovering up Glencore stock and I hope you are one of them for it is the IPO of 2011 (GBP40bn is a lot, don't you think although of course compared to the up and coming Facebook its a piss in the park). It is a stag opportunity and given the commodity bubble is bursting it is probably one to get out of quite quickly. Knowing my luck it will be the next Google and just keep on growing but I doubt it.

The PPM says 44% of its profits come from "marketing activities" and not the trading of physical assets. Now tell me what this means exactly...

Today's shorts:
Commodities crash and burn (bloomberg)

Today's longs:
Electric car spells end of petrol cars (reuters)

Gossip:
Scientists to create commodities out of thin air.



Thursday, May 5, 2011

Helping to pay off the US debt

Daily bread

Daily bread © fintag

News comments:
It has been a tough week for the Americans.

Firstly we had the Bin Laden misinformation and now an obscure social networking site is worth more than Facebook. In January I argued Facebook was worth 300bn (fintag) and looking at the renren IPO, I may have underestimated the valuation.

Of course if Facebook was worth a few trillion, wouldn't it be nice if the stock holders used some of their capital gain to help pay the US debt off? It is quite easy to do.

Here is an extract from the US treasury website:

How do you make a contribution to reduce the debt?

There are two ways for you to make a contribution to reduce the debt:

You can make a contribution online either by credit card, checking or savings account at Pay.gov

You can write a check payable to the Bureau of the Public Debt, and in the memo section, notate that it's a Gift to reduce the Debt Held by the Public. Mail your check to:

Attn Dept G
Bureau of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188

(treasurydirect)

Today's shorts:
Gordan Ramsey (or maybe not) gags his employees with bread (telegraph)

Today's longs:
renren IPO (bloomberg)

Question:
How do I know if I send a check to Dept G that it will actually be used to pay of the US debt? Will I get a certificate?



Wednesday, May 4, 2011

Portugal: Deal or no deal

Portugal

Portugal © fintag

News comments:
First there is denial, then acceptance.

“There is no truth to these reports,” a government spokesman told the Financial Times. “There has been no pressure on Portugal to ask for assistance and we have no need to ask for a financial rescue.” (financial times Nov 26, 2010).

José Sócrates, Portugal's caretaker prime minister, said late on Tuesday he had reached agreement on a USD78bn (GBP69bn) bailout from the EU and the International Monetary Fund. (telegraph May 4, 2011)

Today's shorts:
Treasuries (bloomberg)

Today's longs:
Poor get richer (telegraph)

Gossip:
Spain to take lie detector test.



Tuesday, May 3, 2011

Poor Germans

DB

DB Wall Street © fintag

News comments:
Spanking the Europeans.

Of course us Europeans (and Canadians and Australians) feel uncomfortable at the Obama "it was us that did in Bin Laden" without admitting it was a team effort and that 10 years is a long time. And so with the sub prime crisis, the first bank to be sued by the US government is Deutsche Bank. (bloomberg)

Now we know that most of the US banks were up to their ears in subprime stuff and many were bailed out because their assets were toxic. So I am assuming we are going to see other banks being sued too and that they will be American.

Today's shorts:
Managers abandon equities (reuters)

Today's longs:
King the Clown (telegraph)

Gossip:
Obama to find a cure for the common cold.



Monday, May 2, 2011

RBS escape fate of the stupid

Jimmy Jimmy

RBS © fintag

News comments:
The death of Bin Laden is in the news and markets will be volatile. (picture of his house)

And a good time to hide news about the appalling news that the UK's lead regulator is unable to complete its report on RBS, a bank bailed out by tax payers. (telegraph)

The FSA is a regulator and has recently been fining small and helpless financial institutions like a traffic warden on speed. Pre Lehman the FSA was in the corner puffing on its spliffs as the big boys abused and exploited and burned. And now we realise the FSA was completely out of its depth. It hadn't a clue. But then anyone who knows RBS, also knows it is one of the most dysfunctional banks out there (second only to DB) and is run on spreadsheets and powerpoints so writing a report on its failures could take a lifetime.

Already the debacle is being hidden away and as the FSA is wound down, its epitaph will read "Created by a Scot, Gordon Brown, it died at the hands of a Scot (Fred Goodwin)"

Today's shorts:
Tourist killed in Pakistan (bloomberg)

Hedgies short Obama and Bernanke (telegraph)

Today's longs:
Facebook to pay off US debt (reuters)

Gossip:
FSA staff to be sent on "how to write reports" course.