Category Archives: Market Commentary

Would you Lend to Abu Dhabi Government…

….related entities at an effective yield of 9.5% for the next 18 months?

Aldar Convert maturing in November of 2011 is yielding just that. My views on the equity are well known, but with dubai setting a precedent I think this paper and return/risk profile are way too good to pass up.

The regional paper is getting interesting again.

Energy Bear Market???

Are we in an energy bear market and we just don’t know it yet?

The last time Exxon Mobil closed below 60 was on Jun 27th 2006. That’s 47 months ago.  If you look at the performance of most integrated oil companies over the last twelve months , you do have to wonder whether or not reflation has outright failed. Or is this just the first signs of a valuation bear market putting equities in their rightful place? The Saudi market just erased 7 months of  gains in two weeks. Read More »

The Imminent Collapse Of Industrial Society

I occasionally get feedback saying that I’m too pessimistic or that what I write or forward is too bearishly biased. I am not going to disagree with this view, but I think anyone that knows me well enough knows I go through serious bouts of optimism.(they just happen to be very well dispersed) I don’t think I’m a perma bear or glass half empty guy, but maybe I’m in denial. I also don’t use every panic opportunity to write about the end of civilization. The attached article was forwarded to me by a friend. At first I found it quite interesting, but midway through it started to look familiar. I guess my memory is not what it used to be, because I have read many articles by this guy in the past.  Anyway, if you want perma-bearish, read this. This guy is a ‘survivalist’ expert who spends most of his time writing about oil running out, famine, and pretty much total chaos and anarchy. I went through a phase weere I read a lot of this stuff. I guess it’s no conincidence that he has started to develop a wider following(I remember a time when only ‘crazy’ people forwarded articles from, kitco, antiwar, or the world gold council, now they are much more mainstream). This piece is pretty detailed if you want a playbook for how civilization comes to an end according to a peak oilist. It’s also long so I suggest you take a break from google pacman today and print it out before you read it. That is if you read it :)

The Imminent Collapse Of Industrial Society

By Peter Goodchild

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Market Commentary: “Bird’s Eye View of the 50 Bigesst Banks”

Here are some interesting statistics I collected on the largest(by market cap) 50 banks on the planet. Data source is bloomberg. Read More »

Market Commentary:”Ordos versus Dubai”

BofA has recently put out a very interesting note titled Trip to Ordos: “China’s Dubai”. It’s a very nice read. I give them props for actually going out there and investigating what most of us have only seen on Al Jazeera or in Time magazine. I suggest you get your hands on the whole note if you can. However, as someone living in Dubai, I thought I’d share my thoughts on two points made in this note that I strongly disagreed with.

High Rental Prices versus low rental assumption-

To quote the BofA note:

“People tend to assume rental prices must be extremely low in the empty new town. But that is not the case. For a 90 sq  meter apartment, monthly rent is around RMB 3500(7.5% annual return), much higher than in top-tier cities where rental yields are only 2-3%. Read More »

Market Commentary: “Commodities; From Hard to Softs”

If you have been following agriculture or soft commodities for the past several months, the recent revival of the deflation trade probably didn’t shock you. Most softs have performed miserably over the past four months. That is not to say that hasn’t been a good thing for markets, few people outside of the agricultural space could complain about subdued food prices. But at the same time it shows you that reflation trade is at the end of the day nothing more than a trade. But winds do change, and if you read the headlines last week it looks like the softs may have found some firm footing. The reason? There could be only one answer to that question in these markets; China(yes, in a Sino based universe china can explain everything)! According to this avalanche of headlines, the Chinese are buying soybeans, wheat, corn, and even white sugar like it’s going out of style.

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Market Commentary:”Regulatafragilisticexpialidocious!!”

Supercalifragilisticexpialidocious is defined as “something to say when you have nothing to say”

Then Regulatafragilisticexpialidocious would be “something to regulate when you have nothing to regulate”

If the regulatory frenzy keeps up we will be needing this word soon, even if the sound of it is something quite atrocious.

My thoughts on the Senate Bill Passing…

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Market Commentary: “BAN IT ALL”

“I KILLED THE BANK”- Andrew Jackson

I am being serious. Let’s just ban it all. Why bother with this nonsense anymore? As usual politicians try to ban the people who understand the problem instead of the one’s that created it.

There are two solutions to all these problems that nobody in power ever seems to contemplate.

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“The Unemployed Shareholder and the Four Bears”

A little market entertainment for you…..

The Unemployed Shareholder and the Four Bears

By Akram Annous

With his portfolio plummeting the ‘Unemployed Shareholder’ decided to leap into action. No, he’s not getting a Job!! Instead, he has decided to obtain a CFA so he can better manage the shares he intends to live off for the rest of his life.

On a study break, he has joined the Four Bears at their favorite watering hole ‘The End of the Earth’ for a drink and hopefully some precious market insight…..

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Market Commentary: “Aabar Thoughts”

I had no intention of commenting on this report, but seeing as I’ve been getting peppered with questions about it today here are some quick thoughts.

We continue to have accounting confusion in the press with respect to comprehensive income versus reported income. I guess it matters to those who just want to read headlines. I’d say I hope that most investors go further than that, but I am not going to go there right now. For me it’s amusing. Last summer it was what do you think about aabar’s huge loss? Uh, you mean their profit. Now it’s what do you think about their massive gain? Uh, you mean their loss.

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