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Jimbo

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Jimbo last won the day on August 12 2023

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Doctor of Stock Proctology

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  1. DEAR DEERE DEAR Looked at Deere's financials Stock over valued at $370 Deere is rapidly increasing debt (now at $63 billion) to buy back shares and keep the stock overvalued..... For how long can Deere keep on doing this???? When the music stops the stock will be much lower. It reminds me of GE buying its overvalued shares..... We know how that turned out.
  2. THE MEME PUMP For want of a better word..... Just felt "Cartoonish" Not so much liquidity around now days as there was in 2021. The difference between QE then and QT now. And what there is has gone into pumping crypto!!! Or is in ST Treasuries. Or is already in stocks and bonds. The broader stock market seems to be running out of puff.
  3. THE MEME SQIB Yes, the attempt to pump the meme stocks again has been a failure. Just not enough remaining background liquidity to use. This is not 2021. Treasury taking it all to feed the defecit beast. In the mean time China dumps treasuries and buys gold. (Which explains a lot of the price spike). Having learned the Russian lesson of what happens .....to foreign reserves....when war breaks out.
  4. VARIOUS THOUGHTS ET AL The bitcoin ETF boom is pushing bitcoin up!!!! Has'nt exhausted itself yet.....but will one day.... Still think a great speculation but a terrible long term "investment". I like gold.....its now become a real play on monetary debasement and the probability of extra money printing. Its an insurance policy on inflation and the premium is going up like California fire insurance..... Like Uranium as well..... Currently looking at copper..... Interesting times.
  5. LEVERAGE FOR NOTHING AND STOCKS ON A SPREE Since 2008 when it was founded SPXL the Direxion 3 times daily leveraged S&P 500 index ETF has returned 25% per annum. When I think of the Medallion fund the "primus inter pares" and how it has made its great returns....... I think that most of it is probably due to...... "the same strategy as SPXL but with twice as much daily leverage". But it required a crazy bull market and free NIRP/ZIRP debt to do it!!!!!! This is of course is just a guess.
  6. THE THIN GREEN LINE Yes...the FED is following its rather sad game plan. As the treasury yeild curve drifts up towards the the 5-6 per cent zone. The danger zone...the corporate debt pain zone...... Now its onto tapering the QT. The line in the bond sand (the thin green line) must be held!!! The current FED goal is to keep the yield curve in the 4-5 per cent range.
  7. FOOLED BY THE DOT PLOT (Alternative title: How to play the players 101) So the much anticipated slam dunk sure thing long bond rally fades into the monetary distance as print boy jay layers on the synthetic QT. It was always a mirage with a 2 trillion defecit. And once again the FED has played the players. Reminds me so much of the sure thing slam dunk treasury short play of mid 23...riding the treasuries issue flood...until they realised.....the rrp was their doom. Notice how the Eccles Ecclesiarch layers on the synthetic QE (the dot plot) and QT (we must fight inflation first) in alternating layers. Using it to play the players.
  8. WHEN WILL FINANCIAL MARKETS Realize that the primary task of the FED is to save the US Government from the consequences of its fiscal profligacy and the danger of hard default by printing money. Price stability is a secondary task. If the two tasks conflict....as they currently do..... Then task one wins at the expense to task two. And the wealth of lenders gets transferred to the borrowers.
  9. THE GREAT BOND ESCAPE From 2009-2019 the FED had created the perfect gulag system for free debt. It made all the borrowers...........home buyers, private equity, commercial real estate buyers very very rich. Where bond holders worked away for .....nothing in return. The perfect wealth transfer machine. Until the virus print created all that inflation. Until the great bond gulag escape of March 2022. Now the FED is in full "Band Aid" mode. Its desperately keeping the ten year around 4.25%. Still subsidizing the borrowers.
  10. THE BACKGROUND LIQUIDITY OF THE BIG PRINT...2.0 The big print of 20/21 created a lot of liquidty. It has coalesced into super cluster galaxies of over valuation. It will disperse into background liquidity eventually.
  11. A LITTLE PROBLEM WITH NUMBERS The US budget defecit is 6% of GDP. To stop the government debt spiralling futher in real terms requires inflation around this level. I call it the "budget balancing level of inflation".
  12. INTERESTING STOCK OF THE DAY BP Market cap $106 billion. Cash on balance sheet $33 billion. So really the business is valued at $73 billion. Free cash flow in 23 was $17 billion. 4.3 times FCF. Why don't companies like this just can their dividend and do buybacks??? They could buy the company back in 4 years!!!!!! If they use the cash on the balance sheet and four years of FCF!!!!! 25% return on capital.
  13. A BANK OF GREY RHINOS Banks face a small herd of grey rhinos 1/ The treasury and MBS bond losses....currently stabilised by the FED moderated yeild curve. 2/ The CRE losses ....not moderated by anyone and gradually getting worse. 3/ The deposit flight to fund the defecit.....FHLB is currently sort of looking after this.....sort of. What do you call a herd of grey rhino's..... My suggestion is a "bank of grey rhinos".
  14. IN THE GOLDILOCKS ZONE The treasury yeild curve is just where the FED wants it. In the 4-5 zone. Not too hot not too cold.....just right. Any attempted move by the curve below of above this zone will be countered with the application of the appropriate amount of synthetic QT or QE.
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