To all the Twitter users who are angry at the British Geological Survey for posting an assessment of an earthquake and roiling markets, we would gently suggest that you consider the fact that earth science research is what they are supposed to be doing.
That is, it is their job to study geological events. It is supposed to be your job and the job of the robots “manning” the trading desks to decide what those events mean for markets.Â
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And so, having already grown faster in its initial stages than every other notable bubble on the list (and they probably should have included housing in Canada and Sweden), the only question now is whether it will continue to rise and ultimately surpass the 2+ year, exponential rally in BitCoin.Â
If it does, Seth Golden will be one of the richest people on the planet
We still maintain that it’s just a matter of time before one of these fixings comes in much, much weaker than expected. That’s not to say the medium-term trend won’t be a stronger yuan and it’s certainly not to suggest that the PBoC is eager to upset any apple carts ahead of the Party Congress next month. It’s just to say that if there’s anything the PBoC hates, it’s the idea that market participants think the currency is a one way trade. And this is becoming a one-way trade.
“Therefore, if you believe the North Korean situation will escalate from here, then, by all means, load up on treasuries. That’s the right trade. Yet, I just don’t see war breaking out, and I suspect North Korea will slip off the front page before you know it. There are no real military options, so the idea of Trump and the rest of the world doing anything more than increasing sanctions is a non-starter. Kim Junior will keep testing his missiles, Trump will keep warning him that he will face severe consequences, and nothing will change.”
Well, in case lawmakers needed a little extra incentive to get the legislative ball rolling
The bottom line is that between another powerful hurricane approaching the U.S. mainland, U.S. markets catching up with their global counterparts in terms of pricing in North Korea after the long weekend, the DACA decision which portends more bickering in Washington, and the looming debt ceiling debate (with the specter of a technical default showing up in today’s decidedly poor 4-week bill auction), it was death by a thousand cuts.
“But in April the reflation story began to lose steam (as Trump trades faltered). Such has been the reversal that last month, ‘deflation’ once again surpassed ‘reflation’ as the trending story.”
There’s a confluence of factors at play here including Hurricane Irma, Hurricane Brainard (dovish this morning), legislative gridlock that’s likely to be more acute after the DACA decision, and speculation that another provocation from North Korea could come at any time.Â
It’s safe to say that the market is pricing in some kind of political risk
But as we put it on Monday, Trump is a man who has made a habit out of doing his best Plaxico Burress impression.
Shell-shocked from the catastrophic damage inflicted by Harvey, traders are rushing to price in the expected impact from Hurricane Irma, which is now a Cat. 5 storm barreling towards Florida.Â
Whatever the case, the assumption here is that this will get done come hell or high water (with the latter having already arrived in Texas and the former well on its way between North Korea and Irma).
Well, now that Hurricane Irma has become a Category 5 storm and remains on track to make landfall in the U.S. later this week, folks are getting worried about the impact it could have on crops.
And nowhere is that more apparent than in frozen orange juice futures…
“Just to be clear, nothing moved enough to indicate any panic or identify where safety can really be found. And that isn’t all good. Asset prices pretend to be consumed with issues politic, but in fact trivialize everything.”
Last night, we asked if gold might be overbought amid all the fretting over whether North Korea will or won’t pick a nuclear fight with Donald Trump (which is a lot like arming yourself with a butter knife and jabbing it into the ribs of a coked-out chimpanzee waving an M4A1 carbine).
Ok, so following the latest news out of the Korean peninsula, where Kim is apparently using the cover of darkness to move an ICBM fitted to a wheelbarrow to a launch site in preparation for another provocation ahead of (or on) founding day, South Korean shares fell again.Â
“Sure, they’re unlikely to seek shelter in Bitcoin and other cryptocurrencies just yet, not even Millennials. But they may well prefer a haven basket that includes more”…
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“North Korea started moving an ICBM-class missile produced from Pyongyang research center on Monday after the nuclear test on Sunday,” Asia Business Daily reports, citing an unidentified official.
As we’ve said repeatedly, with Chinese equities riding a hot streak, with capital flight seemingly under control, and with a rapidly appreciating yuan bound to weigh on the economy eventually, don’t be surprised if the PBoC takes the opportunity to push back – at least a little bit.Â
But again, part of the story here is that gold could get some of the haven flows that would normally go to the yen. Because if this gets bad – and reports that Japan is preparing plans to evacuate 60,000 citizens living in or visiting South Korea suggest it might – then investors will likely shun the yen in favor of bullion and the franc (because as far as we know, Kim isn’t firing missiles at Switzerland).Â
Let’s just step back from the moral depravity for a second and think about this from a purely strategic perspective.
Yes, there’s a kinda, sorta deadline for this decision thanks to 10 states that have threatened to sue the government if it doesn’t stop protecting people brought into the country illegally as children. But obviously Trump isn’t obliged to heed that threat. He could take that risk in the interest of not igniting another racially-charged, political firestorm just weeks after he threw gasoline on the firestorm his bungled response to Charlottesville created by pardoning Joe Arpaio.Â
Ok, well this is interesting. Nikkei is out reporting that Japan is planning for a possible
“As we celebrate Labor Day, we are reminded of the inherent dignity of work and the American worker. In America, we honor grit. We honor determination. We honor craftsmanship. And we honor the men and women who turn dreams into reality with their own two hands.” “
I’m that first cat, getting tougher, more focused, maybe a bit immortal. “Miller,†I think, “where are you now? What are you doing? Are you using my litter box again?â€
These concerns have found expression in cautious notes from Goldman and lengthy missives penned by the likes of Howard Marks, who in July implicitly compared the current environment to the “perpetual motion machine” that was at work just prior to the dot-com bust.
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