tag:blogger.com,1999:blog-34323687.post2872301760468735022..comments2024-03-29T09:24:42.731+00:00Comments on Macro Man: Snap back to realityMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger42125tag:blogger.com,1999:blog-34323687.post-43547538266986734632014-10-02T11:05:27.267+01:002014-10-02T11:05:27.267+01:00Yes it is funny how, seemingly the US is using the...Yes it is funny how, seemingly the US is using the EU as an economic battering ram for the sanctions. There is a national hierarchy in the EU and because it is so bonded together, it is easy to control from the outside. "CoC" USA > Germany-France > Rest of Europe.<br /><br />The US is far away and couldn't care less what shocks the EZ economy takes. But still a bit strange how humbly all the nations comply.<br /><br />My own personal opinion is that the Ukraine has a loooooong history with the Sov... Russian federation and it really ain't a part of Europe. It is in the best interest of EU to draw a strict line, which would result in a serious mobilization. Ukraine isn't part of that line and not worth it. <br /><br />Baltics/Finland/Poland on the other hand is. The point just is that aimlessly screwing around with some vague "sanctions" is giving Mr. P nothing but just some laughs with his general staff. Either be serious or shut up.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-48754148412536824502014-10-01T18:12:33.214+01:002014-10-01T18:12:33.214+01:00Disclaimer: a Russian wife is by no mean represent...Disclaimer: a Russian wife is by no mean representative of investment performance, past or presentNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-39317661391448081162014-10-01T17:44:52.005+01:002014-10-01T17:44:52.005+01:00The only Cold War this winter will be between the ...The only Cold War this winter will be between the Ukrainian people and their rinky-dink unelected government in Kiev - when there isn't enough fuel to keep lights on, homes heated and factories running. Those old enough to recall Britain's 3-day week in the 70s will remember the consequences of tangling with one's energy providers (a coal miners strike). <br /><br />Ukraine will probably have another coup before the end of 2015, and end up dumping the US puppet rulers, paying Gazprom and their shareholders all the money they owe and kissing Putin's arse at the partition talks, before resuming life and returning to the international debt markets as a smaller and wiser country.<br /><br />Nico obviously won't have any trouble staying warm this winter... :-)Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-54598399349990747552014-10-01T17:20:20.874+01:002014-10-01T17:20:20.874+01:00Russian wife huh.. lucky bastardRussian wife huh.. lucky bastardAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-84216729229014103032014-10-01T16:59:05.719+01:002014-10-01T16:59:05.719+01:00Schatz still negative and Bunds at a new low yield...Schatz still negative and Bunds at a new low yield today. <br /><br />Yes, of course the West is going to back down..<br /><br />Obama: "Fellow Americans. I have just come from the golf course to share some important news with you. We just found out that the State Department had the facts wrong, because they were holding the intelligence reports upside down, like I did with ISIS, when I told folks they were a JV team (chuckles...). So it turns out that we just got a call from Frau Merkel and her folks, along with Missyoor 'Olond, letting us know that there were actually "bad guys" in Kiev and "good guys" in Donetsk, so I have opened bilateral talks with Mr Putin. Now, if you'll excuse me, I have to make a 4 footer for par").<br /><br />They better do this soon or there is only going to be Dr Aghi and his conjuring tricks standing between Europe and a 1930s-style Depression. Poor Obama, by the way, he wanted to be FDR but Congress wouldn't play ball, and he ended up being Richard I, leading Crusades in lands far away.....Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-90437303745959490722014-10-01T16:56:11.315+01:002014-10-01T16:56:11.315+01:00LB, I think you are spot on about the foreign poli...LB, I think you are spot on about the foreign policy situation. To bring that back to markets its why I continue to believe the whole vertical of US-exporting-LNG is going to be a great long term secular play.<br /><br />So with USD strength at some point hurting US multinationals, is that bullish or bearish for the stocks? If we are looking at the top and bottom lines, its gotta be bearish. If companies are going to just up their buybacks to still hit the EPS targets, is it positive?<br /><br />Mr. Tnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-14572108483510830952014-10-01T16:47:03.956+01:002014-10-01T16:47:03.956+01:00the cold war is over, you say. I loved Merkel'...the cold war is over, you say. I loved Merkel's last diatribe:<br /><br />"“We needed 40 years to overcome East Germany. Sometimes in history one has to be prepared for the long haul, and not ask after four months if it still makes sense to keep up our demands.”"<br /><br />http://www.bloomberg.com/news/2014-09-29/merkel-says-eu-u-s-may-be-facing-long-ukraine-crisis.html<br /><br />as much as it is fancy to believe in a new Russia-Germany-France triumvirat those days, there are too many historical ties between the US and Germany for Merkel to turn away<br /><br />she is walking a tight diplomatic rope and you do not realize how much trust in Putin has been broken so i will repeat: until he goes, noone should invest in Russia<br /><br />as you have already seen Putin can 'bankrupt' any company he wants if he sees fit. If Gazprom was ever threatening it would go to zero and its assets transferred to a new crony<br /><br />As a shareholder, you would feel plenty sorry. i am European, my wife is Russian we are certainly very far from US observers<br /><br />MM speaks French so have him watch that excellent documentary from Arte TV<br /><br />https://www.youtube.com/watch?v=Oxd_cws5tX4<br /><br />and sum it up for you later onNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-6763084114123965842014-10-01T16:40:09.440+01:002014-10-01T16:40:09.440+01:00So the investment in Russia is actually based on a...So the investment in Russia is actually based on a Western backdown? Good I'll go with that. I we will spot the backdown first through western media reports of Ukrainian nastiness ( rebalance the public opinion). We see that works as it only took 12mths for them to change sides in Syria. <br /><br />Tescos - Fkd. caught in the middle ( yes I am one of those happy bimodal shoppers who uses Lidl and Waitrose ( try Lidl's Chocolate and hazelnut gingerbreads they have in at the moment and you can kiss Fortnum and Mason good-bye ). I can't think of anything I'd go to Tesco specifically for. <br /><br />What is more oaf a concern to me is the way they and now Balfour Beatty have produced shockers with respect to accountancy expectations. I am worried that what we are seeing are the first crack in balance sheet ( and now P+L a/c in the case of Tesco) manipulation that has stretched the envelope of teasing max results from accounts to the point that the first slow down and they burst. <br /><br />How many more stretched accounting practices are going to pop when real economy slackens?<br /><br />Balance sheets are the the cause of most financial woes., normally due to the blx rules that others make up to apply to them. Polemichttps://www.blogger.com/profile/05985506596290073453noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-49591666618930256202014-10-01T16:30:25.855+01:002014-10-01T16:30:25.855+01:00Polemic, I think what is going to happen is that a...Polemic, I think what is going to happen is that at some point Germany and other central/northern European countries will eventually tell the US to stick its sanctions and NATO adventures in Ukraine up its arse, because they are f*cking with the economy of a large part of Europe. The extent of economic activity between Germany, Poland, Hungary, Austria, Czech Republic and Slovakia, Finland, Greece, even Italy with Russia has been under-appreciated. The Cold War is over. Really.<br /><br />The recent outbreak of sabre rattling and neocon US interventionism is not only stupid politics, it is very bad economic policy as well, and we are already seeing the results. If the fuel supply gets cut off in Mitteleuropa this winter b/c someone in Washington wants to play Napoleon, then the Mangler is not going to be a happy camper.<br /><br />I have said this before, but it bears repeating. The Russians are different. They are extremely patient and not averse to a bit of discomfort in the short term in order to outwit and defeat an enemy. Napoleon and Hitler inflicted all kinds of damage on the Russian army, only to be defeated in the end. Taking on Russia (even economically) during the winter is sheer folly, and the Europeans know this all too well. This too shall pass.<br /><br />Now on a more mundane level, what's the story with Tesco? Will this iconic British brand survive?Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-5420859173628476962014-10-01T16:02:17.384+01:002014-10-01T16:02:17.384+01:00sorry for typos .. new computer and its spellcheck...sorry for typos .. new computer and its spellcheck is more creative than a Jackson pollock ( had to override it saying bullock there) Polemichttps://www.blogger.com/profile/05985506596290073453noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-13695494724462069142014-10-01T16:00:29.555+01:002014-10-01T16:00:29.555+01:00Russia has a growing binary function to it which s...Russia has a growing binary function to it which supersedes all analysis of cash flows, assets, returns etcetc. <br /><br />Will you be able to get your money out to once you are in. Creeping Western shut down and Russian stubbornness in the face of 'imperialist' sanctions just sees Russia growing its bonds with China, as FDI figures are showing that EUR/US money is being replaced from the east, leaving the west with the choice of backing down or squeezing the screw tighter ( sen if t doesn't work). So ADR spreads will move against locally quoted and restrictions to dealing onshore will get tighter and tighter. <br /><br />Nothing in the Russian game plan points to backing down and Mr P uses sanctions as a nationalistic rallying call. I mean how do you think US would react to Russian sanctions? Would they back down? It would just be more guns and guys called Hank cursing the damn ruskie.<br /><br />As for E-Bola if their was a DEFCON for ebola we would be a EBOLACON3 Polemichttps://www.blogger.com/profile/05985506596290073453noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-89896434058894333382014-10-01T15:55:12.413+01:002014-10-01T15:55:12.413+01:00Nothing like a hemorrhagic virus to screw up the w...Nothing like a hemorrhagic virus to screw up the week's trading plan.... might be a few days before the noise abates. The first Ebola patient is no cause for panic, but the second one will be, if that ever happens.<br /><br />Thanks for all the input on Russia, and sure, these are all reasonable arguments - but there's no new or unknown negatives there that haven't been apparent for some time. The present sentiment extremes on Russia are the foundation of market bottoms. In addition, many of the energy companies have transcended their national origins to some degree, and are on their way to becoming as multinational as BP and Total. If you know a bit about Central and Eastern Europe, you are aware of the inextricable linkage between these companies and many smaller land-locked nations (Slovakia, Austria etc), as well as large resource-poor industrial giants (Germany). <br /><br />As I have stated here before, there are very few genuine free market democracies now (certainly not the US, which is in Full On Crony Capitalism), so all we are doing these days is to choose which oligarchy to invest in. I'm well aware that I am expressing a non-consensus view of events in Ukraine/Russia here, but my perspective on this issue is a little different from most US observers. <br /><br />If you think we are heading into a second Cold War period, then risk is extremely high, but I don't happen to share that point of view. The idea that everyone in Europe is now a Russian-hating free market capitalist who loves McDonalds and wears Stars and Stripes underwear is a bit off the mark. It's much more complicated than the media likes to paint it for the US audience. The average European privately thinks that the US is clumsy, clueless and arrogant, but obviously they have to live with it, just as they do with Russia.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-38360847116492168062014-10-01T14:15:33.750+01:002014-10-01T14:15:33.750+01:00A few thoughts on Russia. The RUB seems in a free ...A few thoughts on Russia. The RUB seems in a free fall and it does worry me. But it will find support somewhere. The gov't has very little debt, large reserves and oil wont go much below $80-90 IMO<br /><br />Investing in oils in Russia is a gamble, as the confiscation of Bashneft from Sistema has shown, thats why sometimes it might be better to go with a SOE, like Gazprom or Sberbank. Foreign capital does want in to develop oil fields, but only with the right conditions / politics, which arent in place. But make no mistake, Total, Exxon etc will invest there at some point. <br /><br />Russian (and Brazilian) corps have been one of the largest EM fixed income issuers over the past few years when those markets were hot. So far the EM HY market is holding in there. If that starts to go, thats the one to watch. Russia OFZ a good proxy.<br /><br />For those more adventurous there is Yandex and Magnit, both quality companies listed internationally.<br /><br />MM, you EuroDollar butterfly spread is positive. What gives?<br />abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-58536310633067454062014-10-01T13:48:02.665+01:002014-10-01T13:48:02.665+01:00Not really at all convinced by LB's Russian va...Not really at all convinced by LB's Russian valuation rationale or recitation of Foreign Affairs articles suggesting the west is to blame for Russia's actions in Crimea/Ukraine.<br /><br />The fact is buying Russia is taking Putin risk. If you want to trumpet the merits of Gazprom et al you need to account for how you avoid the next Sistema. Politics is not the obscuring factor, Putin is. If you are comfortable with that then fill your boots. Otherwise there are other bombed out energy and resource names in more predictable jurisdictions on sale.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-21455684956179566642014-10-01T11:07:44.768+01:002014-10-01T11:07:44.768+01:00http://www.bruegel.org/nc/blog/detail/article/1443...http://www.bruegel.org/nc/blog/detail/article/1443-russian-roulette-reloaded/Nicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-14080234950376437842014-10-01T10:34:43.811+01:002014-10-01T10:34:43.811+01:00in terms of inflow/outflow there is clearly more p...in terms of inflow/outflow there is clearly more people getting out of Russian investments/RUB - with the majority of wealthy Russians increasingly moving out - than foreign investors jumping inNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-38179605950764534732014-10-01T09:52:14.621+01:002014-10-01T09:52:14.621+01:00well, on the RUB,
just discounting the RUB using ...well, on the RUB,<br /><br />just discounting the RUB using CPI data of the last 5 years in Russia against CPI in the US gives you a fair value of USDRUB at 41.70, Currently 39.68<br />(Average Russia 5y CPI YoY 7.70%, US 1.60%) <br />Against EUR, you would get a 55.50 EURRUB level...Currently 50.05.<br />(Average Russia CPI YoY 7.70%, EU 1.70%) <br /><br /><br />If you add to this the relative productivity gain/loss of both regions .... A target of USDRUB 41.70 is not schocking at all. <br />Also the Russia Real Effective Exchange Rate Broad from the Bank for International Settlement on BBG BISBRUR Index gives you a RUB that isn't screamingly cheap.<br /><br />TravisAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-13265163363081062462014-10-01T07:40:52.505+01:002014-10-01T07:40:52.505+01:00great input as always FB, we understand you are tr...great input as always FB, we understand you are trying to support your book here, like we all do<br /><br />part of my family has done massive business in Russia, for your financial safety i have to tell you to refrain from comparing Russia to any other modern state<br /><br />Putin is as different from Rousseff or Obama as vodka is to water and until the guy goes away, he is the only boss there read: unpredictable, and his last move in Ukraine has sent us 20 years back<br /><br />if EURUSD could go from 0.83 to 1.6 in about 8 years, where exactly can you put a floor on RUB - the only way to catch a Russian knife is after Putin's cronies have caught it for you<br /><br />it is not even about having big pockets here, and forget book values, do you know there is actually no accounting in Russia? <br /><br />you either waterski behind the big boys in that country, or do not touch Russian assets not even with Bubka's poleNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-28249649281758018202014-10-01T04:39:22.172+01:002014-10-01T04:39:22.172+01:00USDJPY kissed 110 overnight. Draghi Time again on ...USDJPY kissed 110 overnight. Draghi Time again on Thursday. Time to Buy The News in EURUSD?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-6778548765161747742014-09-30T21:11:02.827+01:002014-09-30T21:11:02.827+01:00POMO on Thursday this week, for those punters stil...POMO on Thursday this week, for those punters still interested in front running the Fed. I reckon we are good for a two day rally here.<br /><br />No POMOs between October 7 and 14. No POMOs at all after October 27th? Shurely shome mishtake? You have been warned. Margin hikes would be an added amusement. Happy Halloween, punters.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-4083798431239698672014-09-30T19:31:39.678+01:002014-09-30T19:31:39.678+01:00C Says
I'll se your qtr 4 money and raise you ...C Says<br />I'll se your qtr 4 money and raise you an elevated marginAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-9337761357779977782014-09-30T19:31:29.750+01:002014-09-30T19:31:29.750+01:00C Says
I'll se your qtr 4 money and raise you ...C Says<br />I'll se your qtr 4 money and raise you an elevated marginAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-26222937166789932222014-09-30T19:04:10.781+01:002014-09-30T19:04:10.781+01:00As always, discipline and patience pay off, and on...As always, discipline and patience pay off, and one has to be nimble with the Kevlar gloves, have tried to pick up Gazprom ADRs under $7 each time RSX has been puked. USDRUB 40 seems like such an important Big Figure, it's hard to resist the Russians this time. Agree on SBR but the oils have surely now been hated as much as is possible.<br /><br />End of quarter is such a good time to be out shopping.... think of Q4 '13, when munis and REIT preferreds were being thrown out with the bathwater. Imagine people just basically giving you a 7-8% yield... such generosity. <br /><br />We sold our puts today, hard not to expect one more mindless rally this week, especially with Q4 money incoming. Bears need to rest a few days.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-24633240007733196042014-09-30T18:54:51.573+01:002014-09-30T18:54:51.573+01:00http://imgur.com/X32CkwT HYG looks to be diverging...http://imgur.com/X32CkwT HYG looks to be diverging from HYG shares outstanding. A positive sign<br /><br />LB, as for Russia (and brazil) I'm sticking with the best, Sberbank and Itau. Yes the oils might be cheaper but those banks are best in class and mgmt has regard for s/h unlike PBR and Gazpromabee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-15555868594756379962014-09-30T18:46:42.205+01:002014-09-30T18:46:42.205+01:00LB, although I agree with you on FX Russian and th...LB, although I agree with you on FX Russian and their stocks, cataching falling knife there had been a rough stragety so far, hadn't it? On the other hand, Brazil seemed to be a much better knife here...Anonymousnoreply@blogger.com