14 Dec 2021

For some strange reason I am ok with this years Time Person of Year award going to Elon Musk. Like him or hate him he is doing stuff and he has an incredible ability to make the seemingly impossible possible.

At the time of writing this (10am) the crypto markets are getting a royal shellacking with BTC down 6.6% on the day. Personally I think there is more pain to come not sure this is a buy the dip moment. I cannot wait to read the Twitter scene after I hit the send button.

When I look at the SP500 futures I have to say as much as I hate to say it we look technically setup for more all time highs. For the moment I am enjoying the fruits (tiny) of my short but I feel I am in no mans land. I am desperate to say that I have caught the top so probably will stay in with stops at the most recent all time high. I am such a showoff.

What to make of another new low of the Turkish Lira. Is there more to this story? My gut tells me yes. Could it be one of those early warning signs to emerging markets. My knee jerk reaction is to short the South African Rand. With Omicron and the poor state of the South African economy I shorted the Rand. Its been actually a very difficult currency to trade for me the last few months I have been in and out maybe 15 times. I am not exactly sure where to put my stop I have it at 15.55 I entered at 15.74.

As we all know headline inflation in the US was announced on Friday last week at 6.81% annualised. It is worth looking under the hood at its composition. The real action is all in the goods and energy space.

I am taking note of the recent increases in Natural Gas and Lumbar prices as herein lies some of the clues for inflation in the future. By the way for those who missed it, Bonds rallied on the high inflation numbers on Friday once again demonstrating how every bit of news is being discounted and the bond market was satisfied Friday with the print that there were no surprises. What we call in the business a “relief rally”.

I have been writing regularly about the precarious solvency state of many of the Chinese Property Developers. Just when you thought we had got most of the bad stuff out of the way, another shoe drops. Shimao is the 13th largest developer in China and is one of the biggest debt issuers with $10.1 billion in outstanding local and offshore bonds. Which reminds me of Dennis Gartman’s Cockroach Theory – In finance there is never one cockroach.

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