Tuesday, July 07, 2009


So after China, a country with a considerable aluminum manufacturing capacity running well below max capacity, starts a fairly-clearly-impossible-to-maintain run of aluminum imports like this:
the CEO of Aloca (which, coincidentally or not, is issuing its earnings report tomorrow), is quoted as saying that aluminum demand in China is recovering and they are clearly out of the woods.

Naturally, this remarkable coincidence is being used as a rationale for buying stocks in certain quarters.

Remarkable, indeed.


wcw said...

Wait, is that who's buying WFC? Hm. Not dissimilar timing, not close enough really to call it. I think something else goosed certain sectors in general around quarter to one Eastern.

sharepend said...

i have been short AA since that poorly reasoned upgrade by Citi. China growth is great but so too are the aluminum subsidies there and in russia.

have taken half off into earnings and will find this interesting.

there is a trend among certain analysts to ignore industry fundamentals and rely on the high power of the firms macro call

Anonymous said...

Hugh Hendry on inflation/deflation


Anonymous said...

that CS piece mentioned in the earlier post today is unreal; 100% bearish USD and 100% inflationist. really, how compelling does the other side of the trade look now for all those of deflationary disposition.

the USD is a great technical setup now with that anecdoctal info, obviously IMHO. getting quite excited, I like the risk reward possibilities.

Macro Man said...

Anon, as I observed to my guy at CS: of the 10 conclusions reached by their equity custys, I disagreed all of them except the last one (on investment bank margins being too high.)

And as I've observed in the comments section here recently, I'm seeing a helluva lot more interesting opportunities than I have in quite a long time. I'm trying very hard to not do too much, too quickly. What I have observed, however, is that my £risk on" hedges traded very poorly even when it seems as if risk should be on...that tells me something about the underlying market dynamic.

And the great thing is, there is a superb technical set-up that very few players seem willing to allocate risk towards because it's "too obvious."

Macro Man said...

Oh, and sharpend: I find that a number of those firm-wide macro calls ignore fundamentals as well!

Anonymous said...

Thanks MM, a technical set-up probably should be fairly obvious. If you are squinting at the screen and looking at 50 different indficators to justify a trade it is probably not a valid set up. On Al, even the Chinese producers (e.g. Chalco) understand that the recent Al buying by China was not sustainable. The fundamentals are very, very poor...

Anonymous said...

More on GS watch:

At a court appearance July 4 in Manhattan, Assistant U.S. Attorney Joseph Facciponti told a federal judge [...]

“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said.


Anonymous said...

mm-quick update-
ive cut about 75% of my length.

ive turned my portfolio into the following
-long very low debt/ highly liquid equities concentrated in resources ie bhp xom types
-bought vix calls, and bought tza (3x bear smallcap ie low liquidity, higher leverage) against it
-left long gold
-light long crude (will be hit, but its a winner)
-light long tbt

im too yippie here, feel like we have a decent leg lower here for at least a week

just hope this isnt a chopfest


Anonymous said...

as an aside-
i dont get how equities and specifically euro is holding up this well w the crude slaughtering...

it doesnt add up... so i think its a lag. so i am moving out of the way of the bus