January 20, 2015 6:36 PM
Modern central bankers are from the school of thought where there is always an eloquent academic model to approach each crisis with. Naturally, volatility is their enemy—in a highly leveraged world, volatility usually leads to dislocation and crisis. Central bankers obviously know that the halving of oil’s price in a few short months adds unnecessary volatility to their carefully orchestrated worlds. What they want to do is corner the price of oil within a narrow range, suppress volatility a... more
January 5, 2015 10:20 AM
At some point during the great housing bubble of the last decade, financial alchemists met over beers to solve an intractable problem. Decades earlier, they had perfected the art of taking mortgages, pooling them into mortgage backed securities and selling them to pension funds, insurance companies and other mindless institutional investors. These funds would always buy the senior tranches that were almost bulletproof, but what do to with the lower tranches? These were the tranches that woul... more
December 26, 2014 12:12 PM
Let me be clear: I am no expert on shale wells. I’m not even an “almost” expert in the shale sector. If you called me an idiot when it comes to shale drilling, I wouldn’t argue with you. With that caveat out of the way, I’m going to generalize about the shale sector (anyway).
In oil and gas, most of the money is spent up front in acquiring the drilling rights and putting the well into production. You then have revenue and hopefully some profit in the period afterwards, as the well produces ... more
December 10, 2014 11:22 AM
Last week, I had the great fortune to finish reading The Frackers by Gregory Zuckerman, which I highly recommend to anyone with even a cursory interest in the history of fracking in America. Essentially, it is the story of a handful of outcast wildcatters who were convinced that there was a way to extract oil and gas from shale that had previously been written off as unrecoverable by the mainstream oil industry. After many years of marginal returns, they finally cracked the code of horizonta... more
November 25, 2014 2:27 PM
So, I’m chatting with my good friend “Man in Black” and he lets me in on a bit of a chart secret; the Chinese Renminbi (CNY) is starting to look awfully similar to the Japanese Yen (JPY) right before it put in a massive move. Long time readers will recall that after stalking it for a few months, I captured the inflection point in the JPY and rode it to very sizable gains. Is it time to start hunting for an inflection in CNY?
Current Renminbi Chart
JPY Before The Big Move
White Verti... more