Thursday, December 15, 2016


I  donno.  Stocks are up, bonds are down, the dollar is up, and it looks as those things are going to stay that way.  The remarkable sector is of course financials which six months ago were cold as ice, and now?  The 10 year closed at 2.60% today which means at some point there has to be a rotation in to capture this yield but everything is so bullish that I wonder when.  That might come if the Democrats can convince enough electors to elect Hilliary but unless that happens, The Donald seems to be the dominating force in all phases of this market.  As far as the markets are concerned the guy hasn't put a foot wrong...of course he has yet to do anything of consequence but visions of sugar plums are dancing in people's heads all over the Street.

The foul winds are all international.  While economic sentiment has grown increasingly positive in regard to the EU, the political issue grow more negative by the day.  The Italian banking system will face a terminal point by the first week in January and the afor-mentioned political/financial crisis in Greece will begin to take center stage by mid-January.  All these have the potential to become flash points for market disruption.  And then there is China.

Trading in the Chinese sovereign debt market was suspended today in Shanghai in the face of plummeting prices no doubt reflecting the actions in the U.S. and the strength of the dollar.  The market is almost entirely internal but obvious has consequences for the Yuan as well as risk indicators throughout China and the region.  What is going on?  No idea, but aside from my ignorance the scarier thing is I don't think anyone has any real idea either.  Now I do know that the Chinese have been talking to anyone they think might have a handle on the near term consequences of a Trump administration or for that matter the actions of a Trump administration.  Nor do I think they have gotten an outline with which they are satisfied.  Things move quickly in China.  The herd instinct is alive and well.  It is to be watched closely.

That's it for this year except for a few interludes on issues that might arise.  Check in from time to time for insightful insights.  God!  That's too much even for me!

Later, gang.

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