Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the World Wide Web.
Bloomberg reports that global investors have abruptly removed their bullish trades on the loonie. The oil price rally, at least temporarily stalled out below $60 (U.S.) per barrel is one factor along with hawkish noises out of U.S. Fed chairwoman Janet Yellen:
"Futures data for the most recent week, released Friday, showed that hedge funds and large speculators went from betting on Canadian dollar losses to favouring gains. That suggests that so-called short positions were squeezed from the market during the recent rally, meaning there's now space for the market to swing the other way, build out its bearish bets once more, and drive the currency lower again in the process."
"All the Loonie Bulls Disappeared in Just One Week – Here's Why" – Bloomberg
Telegraph U.K. market columnist Ambrose Evans-Pritchard has found the sweet spot in modern media, combining useful analysis with apocalyptic hyperbole. In his most recent work, Mr. Evans-Pritchard cites research from HSBC horror-writing economist Stephen King arguing that the current global economy resembles the Titanic, only with no lifeboats:
"[Mr. King] says the U.S. Federal Reserve has had to cut rates by over 500 basis points to right the ship in each of the recessions since the early 1970s. 'That kind of traditional stimulus is now completely ruled out. Meanwhile, budget deficits are still uncomfortably large,' he said.
The authorities are normally able to replenish their ammunition as recovery gathers steam. This time they are faced with a chronic low-growth malaise – partly due to a global 'savings glut,' and increasingly to a slow aging crisis across most of the Northern hemisphere."
Ok, then.
"HSBC fears world recession with no lifeboats left" – Evans-Pritchard, Telegraph
Report on Business writers Sean Silcoff and Jaqueline McNish have written Losing the Signal, an exhaustive account of Blackberry Inc.'s downfall and the excerpts are vastly entertaining. The ROB has published some great chapters but to avoid charges of homerism, I'll quote the Wall Street Journal version:
"Although the market rejected his initial touch-screen approach, Mr. [Mike] Lazaridis believed the four pillars of BlackBerry's success—good battery life, miserly use of carrier's spectrum, security and the ability to type — still ruled in the new smartphone world and gave his company its competitive advantage. Two years after Apple's launch, it still amazed Mr. Lazaridis that iPhone users had to cart around adapters to power up depleted batteries."
"The Inside Story of How the iPhone Crippled BlackBerry" – Wall Street Journal
See also: (highly recommended, on how difficult the decisions were for Blackberry as the iPhne ascended. It's only clear in hindsight) "Disruption and woulda, coulda, shoulda" – Learning by Shipping
I'm on record a few times as predicting that over the long term, Universal Basic Income is a near-inevitability. In essence, I think developed world economies will have to choose between technological development and high employment levels. The Economist presented a long column in opposition to Basic Income, arguing that it's far too costly. That's true, now, but won't always be the case in my opinion.
"Basically unaffordable" – The Economist
Josh "The Reformed Broker" Brown penned a terrifically entertaining harangue against the brokerage industry which, among other things, argues that Robo-advisers will never garner a big share of the market:
"The automated services will see that 'clients' are reacting to market volatility by logging back in and lowering their risk tolerance settings, thus throwing off long-term returns because they can't take the short-term any more. Inbound flows will dry up as unsophisticated savers tweak their settings. 'I'm not throwing any more good money after bad,' they'll say. 'Better wait 'til the coast is clear before investing any more.' Behavioural sabotage, impossible to control without a human voice and eye contact."
"When the flood comes" – Reformed Broker
Tweet of the day: J.C. Parets of All-Star Charts is a technically-minded trader with a dim view of gold miners: " @allstarcharts Hard to find a worse group out there than Gold Miners. What a terrible space that is and I think shorts can be very aggressive here $GDX" – Twitter
Diversion: I spent a couple of hours on this on the weekend – an archive of old photos of New York City mapped out on Google Maps,
"Here Are 40,000 Photos Of Old New York Plotted on a City Map" – OldNYC.org