TLDR: ChatGPT summary:
JR = Julian Rimmer (Resident Boomer and former EM markets pro turned writer.)
DGG = Dario Garcia Giner (Resident Zoomer and former corporate investigations pro turned meme stock watcher and in-house drone expert.)
Welcome to the latest installment of the Boomer and the Zoomer
Good moaning, Dario
76 yrs ago today the UN approved the establishment of the Jewish state.
The literary among us celebrate the birthdays of Jonathan Swift and Samuel Clement / Mark Twain.
It was the birthday of Churchill.
And speaking of statesmen, the sun finally set on Henry Kissinger at the grand old age of 100.
10:33 JR: I can riposte that with a Gore Vidal quote
Although I’m sure it’s apocryphal
Nunc tempus loquendi
Atlassian ($TEAM) insiders have sold over $600m in shares this year – with a few million’s worth being sold every few days
But let’s move onto cooler market developments
What do you make of 3-d printing julian?
Have you ever seen one?
But there’s bigger news this week
Apparently Rapid Liquid Printing, some very very smart guys form top universities in the US, have started coming out with their new RLP printer
HUGE milestone
RLP is a breakthrough technique to print 3d objects inside gel
This is critical for 2 reasons
Conventional 3-d printing is hampered by 2 obstacles – printing on a surface and post-processing time
If you’re printing on a surface, the structure needs to support itself while being built, leading to material wastage for these struts that need to be carefully cleaned (read: broken) off
Not so with RLP
RLP prints in a gel – meaning it’s essentially printing in a zero-G environment, meaning no post-processing or material wastage
10:38 JR: It doesn’t remind me of Westworld. I’ve never heard of it.
10:39 JR: Before we move on to EVs
Is there a way to play the rapid gel 3d printing?
But I’d caution people to stay far away.
One thing is developing the tech – the guys will prolly get rich.
But getting the tech to a place where it’s profitable and competitive with conventional manufacturing is still a long way to go
Just look at how poorly 3-d printer companies stock has been performing since the hype around them in 2020
10:41 JR: It wouldn’t need Russian gas, though so it’s a laudable enterprise at this stage.
I’ve always wondered what kind of supply restrictions the insane capabilities of 3-d printers will lead to
I’m bullish on the tech, bearish on the sector
(precisely because of how bullish I am on the tech)
I mean, look at this sexy beast
10:42 JR: It will be enshrined within the 2nd amendment for sure, the right to print firearms.
So – EVs
UK announced a 2bn investment across the automotive industry
Precisely geared to facilitate certain developments in EV technology
I always get a little annoyed at EV news – I prefer dead dinosaurs and internal combustion – but that’s my bias
“This funding will also be used for developing lightweight electric vehicle powertrains for heavy goods vehicles and hydrogen fuel cells for buses. Also, it will be used for the development of motorsport technology built into highly efficient motors for cars and vans.”
Unfortunately timed, as EV dealerships in the United States are rebelling against Biden’s EV adoption plan between now and 2032
“EVs are selling three times as slow as [internal combustion engine] cars. And so dealers that were forced to make investments on the electrification space, forced to have floorplan financing against these cars, are suddenly running against 90–93 days of inventory turn vis-a-vis 31–32 days for the internal combustion cars. And that obviously is a real issue for them,” said Jantoon Reigersman, COO at TrueCar.”
10:44 JR: Isn’t it just a function of cost, though? At some point there will be a generation of drivers who will have no recollection of petrol cars
10:47 DGG: Yes lol.
Linda, ashen-faced in the front row tweeted later…TodayElon Musk gave a wide ranging and candid interview at
@dealbook2023. He also offered an apology, an explanation and an explicit point of view about our position. X is enabling an information independence that’s uncomfortable for some people. We’re a platform that allows people to make their own decisions.’
I wonder, Dario, what ads show up in your Twitter feed and what that says about you?
Mine shows a great preponderance of storage solutions
Onto markets
The best month for global equities in 3 yrs comes to an end
Interesting chart from BAML showing how a buy-the-dip mentality has been enshrined in financial mkts by the Greenspan/ Bernanke/ Yellen/ Powell Put / repeated willingness of central banks – read governments – to do whatever it takes to support financial assets, sustain liquidity and prevent economic collapse.
The Covid-19 rubric should, of course, read ‘waver’ not ‘waiver’ (the pedant adds)
Again, one can see how a whole generation of retail traders, the HODL bunch, have grown up knowing the govt/ the central banks will ultimately bail them out
Another fascinating story I came across…
Goethe University study on ETF demonstrated that the proliferation of ETFs has exacerbated mkt volatility.
I suppose this study simply puts numbers and stats on something equity strategists have instinctively sensed for many years.
Shorter-term investors have a greater propensity for ETFs and for trading on non-fundamental information/ charts/ online trading fora/ sentiment/ Twitter/ Reddit and so on
Do you, I address you as a spokesman for the Zoomer generation, use ETFs in preference to single stocks, Dario?
But I’ve heard it’s not unwise
Chart posted by ZH last evening
(I pause for a moment to remind readers I despise Zerohedge)
According to bberg, “taken at face value, that’s two-thirds of districts citing conditions that are ostensibly consistent with a mild recession.”
And, as a consequence, mkts are now pricing in 125bp of easing in 2024
(Difficult to reconcile this with the latest revision to Q3 GDP from 4.9% to 5.2%)
- Retail sales, including autos, remained mixed; sales of discretionary items and durable goods, like furniture and appliances, declined, on average, as consumers showed more price sensitivity.
- Travel and tourism activity was generally healthy. Demand for transportation services was sluggish.
- Manufacturing activity was mixed, and manufacturers’ outlooks weakened.
- Julian Rimmer struggled to sell much high-end wine (or any at all, really)
- Demand for business loans decreased slightly, particularly real estate loans.
- Consumer credit remained fairly healthy, but some banks noted a slight uptick in consumer delinquencies.
- Agriculture conditions were steady to slightly up as farmers reported higher selling prices; yields were mixed.
- Commercial real estate activity continued to slow; the office segment remained weak and multifamily activity softened.
- Several Districts noted a slight decrease in residential sales and higher inventories of available homes.
Prizes for anyone who spots the odd one out.
“Stimulus money handed out during Covid shutdowns and quantitative easing by the Federal Reserve had injected “drugs directly into our system” and caused an economic “sugar high,” said Dimon. But that’s fading. “I think quantitative easing and tightening and these geopolitical issues can bite,” he said.
In previous interviews, Dimon has said that the Fed may be far from finished with its aggressive regimen of interest rate hikes in the fight against elevated inflation, and that it’s possible the central bank will continue hiking rates by another 1.5 percentage points, to 7%.”
11:01 JR: Now make sense of this:
11:02 DGG: John – I think the 2% target’s been dead for a while no?
11:02 JR: (a challenge with which I should preface everything I write or say)
As US recession seems to be featuring more prominently in forecasts, investors are chucking money at the most highly-leveraged sector in the mkt.
Look at this
11:03 DGG: Why is that?
11:03 JR: Because high-yield bonds, by their very definition, are those belonging to companies who are indebted, have weaker balance sheets and are mor vulnerable to economic slowdowns
And then the beige book seems to diverge from what Wall St analysts are forecasting…
@johnk – i don’t think the central banks ever get back to 2% and settle for a higher number
These S&P forecasts for 2024 don’t make much sense if you believe in the recessionary scenario. According to Multipolar Mkt JPM is the most bearish of the major houses with an 8% decline predicted for next year, despite eps growth.
The clause will force banks to monitor all bank accounts – as well as those receiving benefits from the government
Silkie Carlo from Big Brother Watch wrote an excellent thread on the matter on Twitter
“It would be dangerous for everyone if the government reverses this presumption of innocence.
Information processing in the welfare system is notoriously bad – the state rifling through millions of people’s bank statements is highly likely to result in serious mistakes…”
UK banks… delightful segue onto BoE governor, Andrew Bailey
Or as he is better know
The beleaguered BOE governor Andrew Bailey
His grim vision of the economy.
“If you look at what I call the potential growth rates of the economy, there’s no doubt it’s lower than it has been in much of my working life,” he said.
It be true but I dont know we’d state this so brazenly
The excellent Simon French of Panmure Gordon on the BoE governor’s comments
‘I think the Governor is factually correct in this, and many of his recent statements. But I think it also shows a misunderstanding of the (unofficial) communications responsibility of a Governor in framing economic decisions. Growth, productivity & profit requires optimism – and CB leaders have an outsized role in setting that mood.’
As if to undermine him, yesterday data released
The UK unemployment rate fell to 3.5 per cent in the spring, according to early findings from a new survey from the Office for National Statistics that suggests the jobs market is stronger than previously thought. The figures — which match a low seen only once since the 1970s — were quietly released in an ONS spreadsheet last month and contrast with the official estimate of 4.2 per cent for the second and third quarters.
DXY weakness which we have discussed ad nauseam in this parish
Has been a boon to EMFX but not all EMFX
Izzy will be chuffed at the strength of the zloty but rand, lira, peso and rupee all failed to chalk up a gain in Nov for well-rehearsed reasons.
Guyana is heating up!
Guyana has conducted several flag raising ceremonies over their Essequibo lands, and outlined intentions to construct their military bases in the region to dissuade additional attempts by venezuela to muscle in on their newly found oil wealth
And Venezuela’s is one of the region’s strongest – at least on paper
And now Venezuela is announcing the construction of their own military bases near the contact line with Guyana
Yesteday, news reports attested to the Brazilian army being placed on high alert near the Guyanese border due to Venezuelan military buildup
Published Brazilian military intelligence suggests Venezuelan military plans an imminent move against the Guyanese republic
This?
11:16 DGG: We can’t see Russians around every corner Julian.
11:16 JR: I see Russians everywhere.
11:16 DGG: lmao
All of this happened as Guyana’s third offshore project by ExxonMobil – first and largest in Guyana – began flowing oil – the Prosperity FPSO
(Well, a week and a half ago to be precise)
We remind our viewers that over 20 oil majors and minors, including Saudi Aramco, BP, and Shell are competing for Guyanese oil contracts
And that this oil rush has made Guyana the second fastest growing nation in the world
11:18 JR: A wild stab in the dark here but is the govt of Guyana a reputable and reliable partner?
11:18 DGG: I’m gonna take a spitball guess by looking at the region and suggest no.
11:18 JR: So disappointing.
US defence officials have also visited Guyana on Tuesday
With the caveat that i’m an amateur
Seems unlikely Maduro’s regime would risk international isolation so soon after regaining it due to America’s oil supply woes
On the other hand, nobody can let such a potentially profitable historical claim go to waste
By IMF
Beyond the medium and long term national concerns are naturally short termist electoral attempts by Maduro to place himself as sovereign defender
Something he defintiely has to do this time as conditional to its reentry into international finance, Maduro’s government has to allow for free and fair elections with the opposition
Do you know why it’s called Venezuela?
11:22 DGG: No?
So little Venice effectively
In less cute news
The US has just issued a warning about a Serbian military buildup along the Kosovo border
11:24 JR: Do you think the Russians are behind this?
11:24 DGG: We can’t see Russians around every corner Julian.
11:24 JR: (stopped clock).
But people should watch for the December 1 deadline for 10,000 serbian motorists in Kosovo to register their cards with Kosovan license plates
This is the date that violence is most likely to break out
11:25 JR: Why did the Kosovans try to impose this? Because it seems inflammatory and no real benefit derived?
The significance of Kosovo to European markets often goes underrated.
But Kosovo is an intrinsic part of the Silk Road – the so-called Balkan Route – for drug and human trafficking into EU
Kosovan route particularly important for east-west heroin transfers, which come through turkey and into the Albanian border from Kosovo
Around 40% of European heroin traffic
If a conflict would re-route drug supplies from this Balkan region it’s essentially an inflationary push
11:27 JR: Do you recall what Bismarck said on the Balkans?
11:27 DGG: No.
11:28 JR: They are not worth the healthy bones of a single Pomeranian grenadier.
11:28 DGG: I miss Tito is all I can say.
Nunc tempus taciendi
And goodbye all
And reminder – no show tomorrow
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