Robert Young's Blog – April 2015 Archive (6)

New Gold, Part The Third

For those watching Reporting Season of Mr. Market, you should have noted so many Masters of The World crying in their champagne (through their sock puppet anal-ists) that The Strong Dollar has wreaked havoc with their well deserved profits.

Boo hoo, y'all!!!! Since the Almighty Buck is really (don't argue with me) New Gold, and the global economy does continue to expand, if only haltingly, then specie must needs keep up. Without more New Gold, the existing stock gets bid up by…

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Added by Robert Young on April 27, 2015 at 10:47am — 1 Comment

Robo Rat

I'll admit it. The notion that one can run an economy with increasing automation and olde style wage setting is just silly. While we now, by all accounts, take it for granted that machines should replace humans in assembly line type work, some of us have taken this notion to its logical conclusion. Which conclusion is that, without a rebuilding of wage earning, the capitalist utopia is about to end. Even Foxconn has tired of workers, cheap as they are in China, for robots.

The…

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Added by Robert Young on April 19, 2015 at 7:01pm — 16 Comments

Hoe Lee She It

Regular Reader has certainly surmised that the issue of micro, macro, and quant with regard to flation and interest has been a bugbear for the last little while. To reiterate: The Great Recession resulted from trillions of dollars chasing high yield, yet risk free, instruments, preferably without the ugly detail of real investment. Those trillions have only grown since then, not least due to the QE bucks tossed the way of corps., hedge funds and .1%ers. Dullards all.

Anyway, the punch…

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Added by Robert Young on April 14, 2015 at 7:28pm — 10 Comments

Those Bermuda Bastards

I think it was Dr. Hemond who said, "If you need a little money, you go to a bank. If you need serious money, you go to an insurance company." Mostly, of course, life companies; the payout risk is somewhat more quantifiably predictable. Causes of death don't change all that much from year to year. Hurricanes, tornados, and faulty autos; not so much. Or very much, depending on how one chooses to parse the English.

Earlier in the week, the NYT ran…

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Added by Robert Young on April 12, 2015 at 6:30pm — 2 Comments

The Truth Will Out

From the beginning of the QE exercise, I've been slapping the "inflation is coming!! inflation is coming!!" crowd with the reality: the Fed (nor the other central banks, which the Fed really isn't you know) hasn't been dropping Benjamins from 747s over Anytown, USA all this time. No, it's been giving it to corps. and .1%ers. The result is local inflation, the stock market in particular, and corp. balance sheets' cash position.

There are three drivers of inflation:

1) wage push…

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Added by Robert Young on April 9, 2015 at 6:10am — 4 Comments

Of Some Interest

For a long while now, I've been needling the micro- and quant crowd with respect to understanding and predicting interest rates. The real rate is set by the productivity of physical capital used by business. When business can't figure out what to do with their moolah (demand), as has been the case since at least 2000 (all that moolah went into housing, rather than productive physical capital, for a reason), good old supply and demand drives down price (interest). When business considers yet…

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Added by Robert Young on April 1, 2015 at 6:11am — 1 Comment

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Cutting Edge Not Vertical

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