Author: Contrarian Marketplace

Why buy a Rolls-Royce without a Rimowa??

764137F2-C48C-469D-9FB0-6A3F5848ABF6.jpeg

I guess even the some of well heeled are strapped for cash. Surely the pomp of being able to buy a Rolls-Royce is the theatrics of handing the dealer a Rimowa briefcase stuffed with crisp bank notes. The RR offer is a combination of a $10,000 special buyers support and 0.99% financing. Maybe RR realizes that its customers are probably punting bitcoin so need the extra leverage a 0.99% loan provides?

In the old days as an industrials analyst, I used to cover a stock called Ferretti which made ridiculously large motor yachts where the average price was $15 million +. When Asking the company how the tech-wreck internet bubble collapse would impact sales they responded “our customers do not experience recessions”. One wonders if RR are requiring discounted financing to shift product that costs as much as a house that perhaps their customers “do experience recessions

Time to “put” some eggs in this basket!

8247EFD3-B6AE-4CC5-B57C-954C532066AE.jpeg

In the everything bubble it is hard to find exposure to ‘relatively’ cheap things. Just a quick glance at the S&P500 index derivatives market one can see that ‘Put’ options (i.e. buying a put option gives the owner the right to sell at a particular strike price) prices are scraping the bottom of the barrel. While the above 2450 strike price (expires on 19 Jan 2018) seems a stretch for an S&P 500 Index showing 2662 (8.7% higher than the above put option) listening to outgoing Fed Chair Janet Yellen in the December FOMC press conference tells us that group think is alive and kicking. At least she admitted that,

The stock market has gone up a great deal this year…asset valuations are elevated….We see ratios in the high end of historical ranges…but Economists are not great at knowing what the right valuations are…we don’t have a terrific track record

Whatever the ultimate timing is of the impending pullback in asset bubbles, the downside will be extra ugly, especially now with so much market behaviour driven by robots with algorithms that have not been thoroughly tested in bear markets.  Time to own some longer dated put options me thinks. #MPGA (Make puts great again)

NFL – seat prices at the back of the discount rack

8D973892-43C7-4648-80CC-152DB9BEBB65.jpeg

NFL has been off the main headlines recently. Interesting to see that seats for certain games are selling for as little as $3 each. Of course better games starring more popular teams show firmer (albeit deeply discounted) pricing but one can’t help but think this is a continuation of the backlash against the kneeling saga. Regardless of the views of the players, their employers (aka the fans) are evaluating them by their wallets. Seems like the message hasn’t got through. If they wish to continue to kneel deep discounts which incorporate the social cost to the fan have to be provided until the ultimate financial impact to the players is reached.

Stepping out of the echo chamber

03F6C2A4-E2DF-415E-B0EB-6D67FC00D6C6.jpeg

The Huff Post shows what can happen when a journalist steps out of the echo chamber and reflects on the realities. CM has often said that the liberal mainstream media is its own worst enemy creating narratives when there isn’t one with regards to POTUS. He knows how important he is for their ratings yet they end up taking his bait every time. It is not a question of what one thinks of the president or his policies rather the best way to defeat him is to ignore him. Yet if more mainstream media stepped out of the echo chamber and rationally and deeply analyzed what is going on rather than point to proving he paid a lot of tax or having a meltdown on whether he called KJU  “Rocket man” then the people they wish to sway might actually start  listening.

Regardless of one’s view on the matter, the recognition of Jerusalem as the capital of Israel was attacked as the work of an unhinged madman when indeed history proved Bill Clinton, W Bush and Obama all said exactly the same thing. Trump is just actioning  it. Had the mainstream media reported the facts the other presidents showed the same point of view then maybe, just maybe the audience would grow on the merits of balanced journalism. By screaming at the sky and writing the same tired stories that don’t go into any detail is it any wonder even the Huff Post is compelled to write, ‘Sadly, Trump is winning’.

So let’s see whether Huff Post readers pillory Earl Ofari Hutchinson for writing such a piece that doesn’t pander to what they want to hear but challenge their thinking. One would logically think that there is more than enough content to show him up for what they believe him to be even when looked at objectively with context and perspective. CM wrote that his behaviour at the Navaho award ceremony was completely unnecessary. Indeed the Navaho marines present said he’ll be a great president. Regardless, Trump was stupid to attack Elizabeth Warren with a Pocahontas jibe. It lacked class and took away the real meaning of honouring men who not only risked their lives against the enemy but their own side. If these Navaho were at risk of being captured their own soldiers were ordered to kill them.

Which presents an interesting juxtaposition- do the liberals surrender ratings, potential personal remuneration in order to bring him down by starving the very media attention Trump craves or do the remain the very media whores seeking their own fame and glory?

This can’t wait

300D6EB1-EB32-4161-B61D-72044DD4885A

John Mauldin has written an informative piece entitled “this can’t wait” which sums up a lot of pieces I’ve written on the sickening state of public pension unfunded liabilities and the debt super cycle that is facing us. While Mauldin is trying to sell his investment services on the back of this, I wasn’t when I wrote mine. Public service announcement? Maybe but the stats of the black holes we face in pensions and central bank QE which has failed to boost money velocity will bite. Hard. There will be no “I told you so” glory because almost everyone will lose big.

Even if people want to criticize me for being a perma-bear there is no harm in being aware of what is likely coming.

Bitcoin Exchange looks to litigation to shut critics up

24356639-9178-4D8A-BDBB-042A2BF649AE.jpeg

As Bitcoin surged through $16,000 it’s largest exchange Bitfinex has declared it will take legal action against critics. Sounds like it is run by millennials to have to threaten those who disagree with them. In the following article Bitfinex attorneys said,

To date, every claim made by these bad actors has been patently false and made simply to agitate the cryptocurrency ecosystem. As a result, Bitfinex has decided to assert all of its legal rights and remedies against this agitator and his associates.

However it seems an independent audit over the USD reserve status of Tether, which Bitfinex is involved with has not been conducted as promised. Seems a pretty binary question. So threatening to sue a blogger before facts have been laid bare does seem rather strange. Indeed wouldn’t an audit put to bed fears of a rigged system?

Indeed if an exchange goes down and people wanted the cash equivalent for their coins then wouldn’t the Ponzi scheme be revealed?

As Bitcoin soared past $16,000 overnight it is hard not to feel bewildered but at least there is comfort in knowing dissenting voices will be sued.

Just as a side note. As a business if I accepted bitcoin from a client for $16,000 equivalent services bill yet all my $$12,000 of outgoings for staff, office space, utilities, mobile phone etc were in dollars what would happen if my bitcoin halved in value? All of a sudden my $4000 profit has turned into $4000 loss. Would businesses want to carry the risks of bitcoin in trade unless the landlord, staff,  utilities and cellphone companies all agreed to accept it as payment? Torn asunder the tax man only accepts dollars as far as I know.

Bitcoin now on prime time Japanese variety TV

492468E9-F50E-439B-8479-54B2117C3071.jpeg

The picture above is of Tetsuro Degawa, a Japanese comedian who does his best to show himself to have little intelligence. On prime time TV tonite he was talking about Bitcoin. The sign to the right partially says “can you understand Bitcoin in 5 minutes?” 

Japanese TV audiences generally gasp at new information so Bitcoin was a subject of great interest. Still one wonders if Degawa is presenting on the crypto currency that we’re one stage away from the taxi driver giving tips.

Today, Bitcoin is trading over $15,000 up another 13% today alone. Apparently Warren Buffett has disclosed Berkshire Hathaway has bought some too.

In 20 years in financial markets I cannot work out how something backed by nothing other than greed in a market that is not regulated and highly vulnerable to cyber terrorism continues to sucker more people in.

Tulip mania may be removed as the bubble yardstick before long. As one of my experienced private wealth managers likes to say, “I have difficulty fathoming the “no euphoria this time” view.”