Tesla Investor's General Macroeconomic / Market Discussion

[Intl Professor]

Tid bits on N. Korean Hackers

This is a long article remarkable for the detailed evidence portrayed in buttressing the threat assessment. I've often wondered where the regime gets the money for such extravagant use of rockets. The answer would make Willie Sutton look proud; they rob our banks because that's where the money is.

The World Once Laughed at North Korean Cyberpower. No More.

Edit: Fixed Willie. Attribution of famous line was denied by Sutton, for you purists!

 

[ValueAnalyst]

U.S. Jobless Claims Fall to 44-Year Low After Hurricane Disruptions

Expect higher inflation in 2018.

 

[Starno]

U.S. Jobless Claims Fall to 44-Year Low After Hurricane Disruptions

Expect higher inflation in 2018.

So probably interest rate spike ...

 

[kenliles]

So probably interest rate spike ...

probably- but there are some cross currents going on;
Leading Economic indicator dropped .2% toady (expected was .1% increase); keeps up and will dampen interest rates;

Here are some conflicts:
Capital is cheap and easy right now:

CapX is scheduled for large expansions 2018 - a stimulator

Market volatility has nowhere to go but up from here

given the many cross conditions and the massive Tesla expansion juxtaposition - hang on to your 2018 hats;
hence- my cautionary concerns to generally lengthen the time constant of your investment portfolio scope and risk assessment

 

[kenliles]

For those tracking new Fed appointee candidates and potential effects on Fed policy

 

[Intl Professor]

I may be OT but I have pity for General Kelly who's really caught with his proverbials between the proverbial rock and a hard spot. On the one hand as Senator Corker says, he may be one of the three or four top officials keeping us from total chaos and he obviously has talent and character. To keep his job some half-assed (where there brains are and the expected consequences) political type, perhaps the President himself, says go out there and clean this up with target: the Congresswoman, Obama, etc., and work in your own son's death and your grievance.

I take Kelly at his word the President asked him for advice. He said, don't call. He was asked how to handle it, and he suggested ways to handle it that might be less offensive. Why did he say, don't call? Pretty obvious. Why should anyone take that call graciously in the middle of grieving? Likely, unless they think totally like Trump and into his clumsiness, they might be in the middle of anger at the army, the prez, and anyone having anything to do with government—especially a President who has such an abysmal record at bigotry? It will only get worse for Kelly. The prez is like an incontinent child, he spoils anyone he touches.

I took a look at the definition of psychotic the other day. If I remember correctly it describes someone cut off from normal human emotions. I couldn't find anything on mass psychotic behavior but I'm sure the pathology is contagious. I'm catching it, so are others on both sides of the spectrum.

 

[Lump]

Gold Star Widow Releases Trump’s Call After Husband Was Killed In Afghanistan

https://videos.posttv.com/washpost-...1e4b0dcb962093e0e_t_1508449058451_master.m3u8

 

[Lump]

We had some records set once again, you need binoculars to see the stock market data on CNN these days.

My wife is tired of restocking the bar for weekend market celebrations so she sent me to Costco yesterday...lucky me Johnnie Walker Platinum was on sale .

Even Bitcoin hit a new record of $6000.

 

[Intl Professor]

North Korea

Curt Renz has more cred on this but this amateur thinks journalism is getting much better. In decades past the Times Magazine seemed almost useless to me. It was superficial and addressed mundane subjects in an orthodox style. The Times has suffered because of the internet revolution but seems to have recovered. I am most impressed with the improvement of the print version which in content, and style, now rivals the New Yorker. (I used to follow the New York Review of Books but no longer do so. It’s style is probably the same—way too academic—even for this stodgy type.)

Here is an example.

North Korea Is No Longer the Hermit Kingdom — but How Long Will China Be Its Lifeline?

There is nothing smashingly new here, but it is an edible summary of what seems to be known. Plenty of gruel for those who want to tighten the rules of trade, but some evidence of economic rationality on the part of our least favorite tyrant in examples of respect for a mixed approach as in China, Vietnam, and even Cuba. Since I believe in the absolute power of money to corrupt, in my view we should just let N. Korea become more capitalistic and then collapse from within as the poison works its way downward.

The late Georgi Arbatov, head of the Institute for the Study of the USA and Canada, once said of Gorbachev's policies, "we are going to do something terrible to you, we are going to deprive you of an enemy." We should do the same for their dear leader, but ours seems incapable of giving up an enemy, whether Kim or Putin or the Ayatollahs.

The cyber threat is another matter and should be addressed but probably won’t since we have so much capability too and are hampered by a government and industry with hardening of the arteries.

 

[kenliles]

Generally a poor sign for macro future risk, unless you are of the opinion current US Presidential office has no role to play in such future risks

Trump’s latest big interview is both funny and terrifying — Vox

 

[generalenthu]

I know we have to survive until 2020, but here is a silver lining.

Jennifer Bendery on Twitter

@jbendery: The Center for Puerto Rican Studies at Hunter College/CUNY estimates 200,000 ppl will leave Puerto Rico & largely resettle in FL.

Hi 2020.

 

[ValueAnalyst]

Significant parallel jump in interest rates today.

@kenliles thoughts?

 

[kenliles]

Significant parallel jump in interest rates today.

@kenliles thoughts?

yeah- John Taylor stock moved up for Fed pick. He won the polling of Senate by Trump. He's hawkish with strict rules for interest rates (rules that would have today's rate around 3%). This process of Fed selection is creating volatility galore with the Bond market as it tries to ascertain direction (that's why it's across the board). Yield curve itself is still in place.
The Equity market consensus is it will be Powell (dove) - Yellen 2nd; But Senate apparently told Trump they prefer Taylor--
keep your macro vision goggles on boyz and girlz

 

[ValueAnalyst]

yeah- John Taylor stock moved up for Fed pick. He won the polling of Senate by Trump. He's hawkish with strict rules for interest rates (rules that would have today's rate around 3%). This process of Fed selection is creating volatility galore with the Bond market as it tries to ascertain direction (that's why it's across the board). Yield curve itself is still in place.
The Equity market consensus is it will be Powell (dove) - Yellen 2nd; But Senate apparently told Trump they prefer Taylor--
keep your macro vision goggles on boyz and girlz

3% ?!?! What's the rule?!?! Put the country in recession ASAP?!?!

 

[jbcarioca]

The Jones act prohibits a foreign flagged or crewed ship from picking up cargo in one US port and delivering it directly to another US port. Why would trading partners have any opinion about this that counts? Trading partners generally, like, trade... you know, them to us, us to them, not us to us...

Airline rules, worldwide, for example prevent country A's airline from providing service from country B to country C unless the flight is part of a route to/from Country A.

FWIW, cabotage rules such as the Jones Act and Sixth Freedom have been around since the Middle Ages and before. The only major exceptions to such rules ahem been the direct results of war, in which conquerors established rules to favor themselves. The notable examples was the Internal German Service following WWII, in which the victors gave themselves the power to operate what became known as the Internal German Service with Pan Am, British Airways, Air France and TWA having exclusive rights to fly between Berlin and other German cities. Following unification Lufthansa took these flights over, paying the operators handsomely.

The Jones Act and the counterparts around the world will not die easily. Every country loves those things.The airlines Fifth and Sixth freedoms evolved directly from ancient rules.
The fifth freedom operators were Pan Am with flights one and two, around the world. More recently Emirates has has considerable advantages from Fifth Freedoms they obtained when there was no domestic UAE airline to worry about.

I'm not really sure what this has to do with Tesla. I'll suggest, though, that in some ways the technical advantages of Tesla might be enablers of production and distribution rights that other builders may not be able to obtain. We'll see.

 

[kenliles]

3% ?!?! What's the rule?!?! Put the country in recession ASAP?!?!

pretty much- it's lauded as transparent - that's his appeal to Senators who have forever lamented the Fed opaqueness. His rule based formula actually would place it at 3.75% today.
Many have argued he would surely modify based on conditions; but he's a hawk;
(here is his paper that elaborates if interested - https://web.stanford.edu/~johntayl/Papers/Discretion.PDF)

given what's happened to US on other fronts- it has to be considered. We also have tax cut proposals from GOP that (preliminary) estimate adding $1.5 Trillion to deficit (they had it down under a Trillion, until Trump tweeted 401k stays in place- so back up). Most of it for the benefit of those that already have it- under the usual assumption, more capital begins more business and more jobs. Apparently - there's a shortage of capital investment around these days!

Anyway these are all estimates and conjectures - but the potential for economic damage is there (and market assessment of same)

 

[kenliles]

just to keep my TCM friends from indulging in X-sport cliff jumping-
strong economic adders out- big jump in both new home sales and non-defense cap spending
stay focused---

 

[kenliles]

this is too bi-partisan and makes way too much sense- so assured to fail/

Senate Obamacare fix would cut deficit, not reduce number with health insurance: CBO

edit: more importantly it robs Trumps attempts to crash the (Obama)Healthcare markets-
again, assuring it's failure;
However, I applaud those making the attempt - well done

 

[Intl Professor]

I'm not sure if this has been discussed recently but in addition to the threat of increasing interest rates due to a possible Taylor appointment, the news from Jeff Flake yesterday may also be having an effect on markets. The argument goes like this: Wall Street wants a tax break. Now it's not going to get it. Wall Street thinks a tax break is the greatest thing for the economy. I disagree. There are a lot of positive things going now, disruption in energy, AI applications, growing public awareness of the mindless market fixation in politics and elsewhere, etc. Mind you IMUHO, the tax break and budget the Reeps are talking about is a disaster for all but those at the top, individuals and corporations. (Obviously influenced by Paul Krugman.) Thus contrary to simple-minded Wall Street failure of tax cuts will eventually be seen as a good thing.

 

[kenliles]