Wednesday, April 6, 2016


Nothing, apparently.  The Fed released the minutes of its last meeting today and it is now clear that the doves are in charge.  With the clear signal that "normalization" is no where in the picture, up went everything today and with Sr Draghi speaking in Lisbon tomorrow we can probably look forward to another good day unless he does a 180 which no one expects.

It's all about the central banks; even more about them that in the near-past.  We now clearly have a "Fed Put," to go along with the "Draghi Put," to go along with the "Abe Put," to go along with...hell, there has to be another "Put" out there.  How 'bout "The Riksbank Put?"  Surely the Swedes qualify.  I think we have covered this before but it is really quite shocking to realize how much sovereign debt is held by these guys.  The Fed--19%; the BOJ--30%; the ECB--over 20% PLUS corporate debt on top of that.  Even in the U.K. the Bank of England owns 22% of all Gilts outstanding.  I guess the argument is that these guys own the printing presses so what can go wrong (Little Paulie Krugman's position) and the debt seems to sell so hey, let's party!  Except that, at least in Japan where there is perhaps the biggest party, nobody has showed up.  Hope springs eternal and as such, ever tiny positive sign is greeted with abounding enthusiasm.

The oil numbers released today show a larger than expected draw-down, so up go the futures.  That energy companies are going broke all over the place, that you can buy damn near all of Midland Tx. for a song, that the towns surrounding and in the Bakken a really hurting and that cap spending is zilch seems to have no effect on the optimism nor the fact that more and more, the traders are whipsawing this market just like in the good ol' days  The spread is just between $30-$40...not $125 to $160.  Except for the Permian Basin (in spots) and some place in Oklahoma know as "the Stack," my guys say you better have $60 a barrel coming in or else you are underwater with shale.  Problem is companies have to keep operating to help pay the bills, even at a loss, and hope...pray, really...that things tighten.  Of course when the Saudis say "screw it" as to reduction in production unless Iran stops ramping up...well, what do I know.  Let's just listen to the world's central banks.  Nothing but joy from them.  Makes ya feel good.

OK, I promise that I'm off this kick tomorrow and broading the scope of interest for the next few days.  Maybe I'll get into Puerto Rico which I think is getting less attention than it should.  Or back to Argentina whose Senate just approved the settlement which supposedly has to be accomplished by the 14th.--except that they don't have any money.  Or the Panamanian Papers...I have some experience with off-shore corporations in tax havens.  Come to think of it, there's a lot out there that might matter.  Huh.  Things are looking up.

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