The Pinball Wizards Romp!

Just to understand what high expectations we have for the Golden State Warriors in the Bay Area,  I am a little deflated because the Dubs didn’t go 16-0 in the playoffs.   Tough to live up to those expectations, no?  But, hey, I will take 16-1!

I can now definitively say,  “Kevin Durant (aka KD) is the best athlete in the world.”   Have you ever seen a 7-footer move the way he does?

Ever since I was a young boy,
I’ve followed basketball.
From ‘Frisco down to Oakland
The ‘Dubs can whip them all
But I ain’t seen nothing like them
In any roundball hall…

That Steph, KD, Dray and Klay kid
Sure play a mean b-ball!

They’re the Pinball Wizards
There has got to be a twist
The Pinball Wizards,
Love the sound of that three point swish!

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US Sector ETF Performance – June 9

ETF_DayETF_WeekETF_MonthETF_QETF_YTD

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Global Risk Monitor – June 9

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RiskMon_1RiskMon_2RiskMon_3

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Volatility Returns (to the NASDAQ)

At around 2 pm (New York) Friday, we see the Nasty (NASDAQ 100 futures) trading down over 3 percent and the Dow and S&P500 relatively flat.  The FANG stocks, including Apple, were getting shellacked

I recall a few weeks ago a prominent strategist saying on CNBC that Apple was the closest thing to risk-free in the market.  The FANG trade is more crowded than Oakland’s Oracle Arena will be on Monday night, Game 5 of the NBA Finals.

Dipping Our Toes In
Nevertheless,  we thought we’d give it the old college try,  venturing out of commodites (that is where the volatility has been), which has been a disaster for us this year, to trade the Nasty into the close,  both long and short.

Not every trade was profitable and it was one helluva a ride, but, in the end, we made some cheese.  The index ended the last hour and a half gapping around 30-60 points at a time in just few minute intervals.   It’s been hard making money this year in commodities and it was nice winning a few rounds from the Algos, for once.

Overall Volatility Still Low
The NASDAQ ended down around 1.8 percent on the day, the Dow and Russell were up 0.4 percent and the S&P500 was flat to down a bit.   The VIX closed  up at 10.7.

A consensus seems to be buiding the Trump trade — industrials,  materials, banks, and energy stocks — is back on.    Is the the growth scare over?   Watch this space.

Trump Trade Returns
We believe, and so seems the market, the James Comey testimoney on Thursday was Trump positive (or not that negative — i.e., no schmoking gun) and that Republicans are kicking into the “two-minute” drill.    That is they are now in hurry up mode to pass legistlation as they realize the political guillotine looms in Novemeber 2018 and could potentially cost them both houses of Congress.

Crash Coming?
There is just too much global liquidity for asset markets  to correct on a general basis, in our opinion.

Relative price and sector shifts?   Absolutely!

A sustained market crash?  NFW!

Not until central banks start draining the swamp.  Furthermore,  Mario Draghi sounded more dovish than Saint Francis of Assisi at Thursday’s ECB meeting.   And, remember,  “John Bull will still be able to stand many things but won’t stand for 1 percent.  Or was it 2 percent?

The global flood of money has to go somewhere  until its starts being removed from the financial system through central bank balance sheet reduction.   And we believe the tipping point on policy interest rates for the markets is 3 percentish, but the Fed will be reluctant to take it there as it will have a deletrious effect on the U.S. budget deficit. Higher interest rates equate to higher interest payments on the national debt and crowding out of other discretionary spending programs.

Don’t want to enter that ugly positive feedback loop, which will be the beginning of the end for the debt supercycle and could result in enornous political stress.

Fall Correction
However, beware the ides of October.

The Fed may start draining the swamp in the fall , i.e., reducing their balance sheet and, thus,  the monetary base;   and China’s  Communist Party Congress wil conclude, which may clear the way for a policy or an economic surprise.

Those wanting to get long should have a nice opportunity to do so when the leaves turn brown and gold in the autumn.

Conclusion
Finally,  remember comrades, just like everyone else, we can’t predict the future and may be completely wrong.   Flexible conviction is all the rage.

And all of the above are just our opinions,  and you know what they say about opinons.   They are like arses, everyone has one.   Some are developed more riguously than others, and some may look  better than others.

Stay tuned.

Nasty_1Nasty_2

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Headline of the Day: Bookies Swallow the Doughnut Again

Bookies declare the U.K. election is all over but the shouting

Bookies now give Theresa May, Tories an 85% chance to win an outright majority.   –  Market Watch, June 8, 2017

 

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The Pinball Wizards


Ever since I was a young boy,

I’ve followed basketball.
From ‘Frisco down to Oakland
The ‘Dubs can whip them all
But I ain’t seen nothing like them
In any roundball hall…

That Steph,KD, Dray and Klay kid
Sure play a mean b-ball!

They’re the Pinball Wizards
There has got to be a twist
The Pinball Wizards,
Love that three point swish!

.

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Thank you,  Grace!

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Chart and Quote of the Day: Death and Uncle Joe

One death is a tragedy; one million is a statistic.  — Joseph Stalin

Man, our spending priorities are out of whack.   Connect the dots.
Leading Causes of Death_June 5
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Strange Currencies and Barter 101

Once upon a time, currencies had intrinsic value.  But now the dollar slouches towards Bethlehem  Wampum.

Ever wonder where the term “buck” comes from?

As in “Ray Nichols, you owe me 100 bucks for our bet the Golden State Warriors would sweep the Cleveland Caviliers in the 2017 NBA Finals?”  And “the buck stops here?”

Animal Skins

Animal skins have a surprisingly important history as currency in different parts of the world.

In Russia and Finland, squirrel pelts were a key medium of exchange during medieval times. Even today, the Finnish word “raha”, which now refers to money, originally meant the “fur of squirrel”.

In North America, the European settlers and First Nations tribes found skins to be one commodity they both agreed had value.

In 1748, Beaver pelts became the “standard of trade” in the north. One pelt could buy two pounds of sugar.

Lastly, the use of buck skins in trade gave rise to “buck” as a slang word for currency, which we still use to describe dollars today.  – Visual Capitalist

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Buck_June4

Or how about the etymology of the term “salary” or the phrase Lebron is “not worth his salt?”

Salt

The importance of salt to ancient civilizations cannot be understated. The first written record on salt appears in 2700 BCE in China.

Salt was highly valued for food preservation, but its production was very limited. As a result, in many places of the world, salt was used as currency.

  • As early as the 6th century, Moorish merchants in sub-Saharan Africa routinely traded salt and gold at the same value per ounce.
  • In what is now modern-day Ethiopia, slabs of rock salt were used as coins. Each coin was 10 inches long and two inches thick.
  • Salt was also used as pay soldiers in Ancient Rome. This became known as “solarium argentum”, from which we now derive the word “salary”
  • A soldier’s salary was cut if he was “not worth his salt”, a phrase that still exists today. – Visual Capitalist

Salt_June4

Interesting stuff, no?

Go Dubs!    I will trade you one Steph Curry and one Kevin Durant basketball card for ten Lebron James cards.  How is that for an exchange rate?

PPP, over or undervalued?

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US Sector ETF Performance – June 2

ETF_DayETF_WeekETF_QETF_YTD

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Global Risk Monitor – June 2

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RiskMon_1RiskMon_2RiskMon_3

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