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Monday, September 23, 2013

23 Sept Communication

now the market makers spread news that the true underlying message of the FOMC is that the growth is not good. It is all communications.

When Bernanke was named Fed Chair, the Vice Chair then was tasked with handling communication with the market. It moves away from the opaque, passive way of running a FED by Alan Greenspan. It calls for better communication with the market. i.e. it offers more guidance in its FOMC decision. Actually it means Deceit. Like what happened over last week. First the Chair sets up expectation of a taper months before, to contain the market rise, to contain the drop in USD. While the Banks, FED proxies can load up, and then the FOMC announces no taper. And a rally happens for the Banks to take profits. Hence this makes the Banks profitable, when they are struggling with their investment and loan business. Better profit prevents another Bank meltdown. This would actually absorb the Billions that the FED is releasing into the market.

Billions from taxpayers monies is now transformed into the Billions in Banks profit statement. QE1/2/3/4 and 100 are all mechanisms by the FED to sustain bigger debts, instead of people cheating on mortgage loans applications. The FED just cheat the people by taking monies from tax payers and giving it to the Banks. There are thousands of explanation given by Economist to justify this cheating. But the Fact is still the Fact, Banks are taking monies from the Tax payers, via the FED. Now it is a battle to sustain this deceit by nominating Yellen, a central architect of this master piece of deception, literally the "Communicator".

Hence the trading pattern would be Stocks going higher, with more violent gyration. But a a guide such dips only last for 1 to 2 days. you can actually buying into this dips when the drop exhaust within a 2 days time frame. A better trade would be to short Crude Oil, Commodities, Aussie, Metals, Metals stocks, Gold, Platinum, Copper, etc. As you can see, the American forces is now a reluctant force. Despite of its advanced weaponry, its will is weak to fight a war. Hence US would no longer have a intimidating effect on China for its dispute with Vietnam, Philippine and Japan.

In its place, Russia would take over, when Putin has shown great finesse in its handling of Syria. Russia now has a stonghold on Europe with its natural gas pipelines. And next year, Russia would commercialize its arctic routes, making Suez canal and Malacca Straits redundant. The next decade belongs to Russia. for once Russian Ruble is a strong buy.

The Silk Route traversing Central Asia would be the new emerging economy. And I yearn to goto Astana for a stint. Obamacare, the Budget ceiling are just noises, market is going to 1800. Gold to 1000. It is all Communication, no FA, no TA. In the end, one just wonder, why dun't the FED dispense a Blue Pill to everybody, and then everybody enters the matrix. It is faster than chopper down trees to make the pulp, and then get the printers, and then the transport. Just a Blue Pill would do to communicate the message.

Meanwhile, in Hong Kong, where the people psyche are governed by the Hang Seng index, the market was kind, and business willing to spend. And I am blessed with business opportunities. Even Snowden wants to come to Hong Kong, when some billionaires are willing to part with some monies.

On 1 Oct, the China floodgate would open when the first onshore Financial Free Trade Zone would operate in Shanghai. China Businesses and individuals would pile their monies into Shanghai and seek an exit. We would see an incessant flow of RMB overseas, converting into other currencies. Euro is the likely candidate.

Even the China brand name Ecommerce platform Alibaba is abandoning listing in China and seeking listing in the NYSE. We should witness a collapse of the China market soon after its annual policy makers meeting in November. US Banks had already sold their stake in the China Banks. China Banks are saddled with Bad Debt, when so called Businessman takes loans, and straight away funnel the monies into HK, and then wired overseas to Singapore, and from there onto US and Europe, in the name of business invoices, payments, etc.

Those Debts are never intended to be repaid. Now the China governments want the entrepreneurs to buy up these Debts from state run banks, thus offloading these bad debts from the state. So called Off Balance sheets arrangements. That is why JP Morgan, Goldman Sachs are running away from the China Banks.

Secondly, in the name of anti-corruption, Chairman Xi is arresting executives of major state entreprises, like their profitable Oil monopolies, Sinopec, CNOCC, etc. And those related companies equities take a tumble suddenly. Essentially, European and US companies who are late to exit from their investments which started decades ago, may literally see their investments going back to Dinnosaur's age.

Because of this need, China decided to setup the Shanghai Free Trade Zone suddenly. At least they can contain the exodus, instead of such trades flowing into other RMB centers like London and Singapore, when it is going to look ugly.

Those RMB Dim Sum bonds are going to take a tumble, hence deleveraging millions of HKers and Asian households of their favourite and sure win gamble. RMB would reverse courses, i.e. weakening. And the People Banks of China would be busy selling USD and buying back its RMB. Hence Hyperflation would arrive into China in 2014. And PBoC would get its USD from selling US Treasuries back to Yellen. And Yellen would be literally "Yelling" when a tsunamis of USD is arriving onto its shores, 50 years of incessant USD printing.

This is what happens when Economics become Communication. We may as well absorb Economics as a discipline into Communications. And Noble Prize of Economics become  the Noble Prize of Communications. And the American Society of Ecomomist become the American Society of Banks Communicator.

Trading ideas:

Euro is expected to revisit 1.6 (even 2.0) to a USD sometime next year. Hence for Euros, Ruble, go long. Buy into Europe and Russian equities, neutral on SPX, though 1800 is expected soon.

Short GBP and AUD, precious metals (for short, violent moves).

Friday, September 20, 2013

20 Sept Taper or no taper

Taper or no Taper, it does not matter. Market is still going up no matter what. SPX is now on its extended 5th wave, 1800 in view. While Commodities are in a tear downwards, because there is no demand. It is a divergent universe, stock market plunges are capped, while commodities are forced downwards. Hence buy Equities on dips and sell metals and commodities hard. Expecting Crude to return to sub-90, Gold towards 1000. This would carry into year end. The Federal Reserve proxy banks are capping Crude at 110, Gold at 1380. The Hedge Funds have decided to scramble after meeting infinite resistance. A difference in Crude of 20 dollars would make a merry Christmas bonus. There is a good demand for Euro, when Funds are buying up Europe Equities, stay away from Euro, sell GBP. Happy trading.