What If???
At KCM, I look for themes which will have legs. It always starts with a pile of thoughts starting with the words “What if?”
Here are the “What ifs?” I’m seeing right now.
What if Abe votes proxies?
It started as a cute Keynesian move of central bank desperation. Now BOJ has absorbed debt, is a notable shareholder in Nikkei 225 companies through ETF’s and they are still going. US 401k masses think BOJ’s hostile takeover is great. Forgive my shody history, but preceding WWII didn’t Japan go on a grab of other people’s assets too?
If Abe stops his global hostile takeover of industry, do valuations suddenly matter again,….. in like… 3 HFT ticks downward? What if he keeps acquiring equities through ETFs?
What if God calls George Soros to his judgement day?
Globalization and cross culturalization are here. Ask any kid with text, Skype, Instagram, Facetime, Vine, Snapchat and any grandma with facebook. Without Soros, would we peons just be allowed melt into each other at an enjoyable pace?
Through tech closeness our kids no longer know geographic boundaries. They meet someone and that person goes into a text group; soul to soul – no prejudice, no racism. If you are nice, we are friends forever regardless of where our individual travels lead.
Soros’ pushiness gets people shooting at each other instead of enjoying each other.
I would council the puppet master to shift the focus to
celebration of differences. People will
melt together if encouraged to be respectfully curious of each other’s
heritage.
George, my phone is open to you. 517 204
9140 if you’d like to discuss.
What if FINRA and the SEC rediscover the importance of the V-bottom?
I have little hope of this. The guys who run machine firms simply own human order flow. Humans push in. Machines fight to fill the buy orders. Humans finish making their positions, machines mark their short positions lower through the vacancy within the bid stack.
Humans quit trying. And everyone wonders where the investors went.
To rectify this, they have to remove collars on best bid best offer enticing market makers to lift their offers against overindulgent short sellers. They also have to reinstate the uptick rule.
VIRT’s last 10q had topline and bottom line contracting. Maybe HFT cannibalism brings exchange masters to rediscover the necessity of humans bringing in golfing buddies.
What if our Fed is behind price suppression in oil futures trading?
Honestly. Pay a closely related machine firm to run a price suppression algo campaign through futures. Cash follows futures. The masses get free money at the gas pump, just like a rate cut. It started on Thanksgiving Day 2014. Stuff like this doesn’t happen by coincidence.
So we sit through a period where producers have to accelerate production to make cash flow. No new drilling happens because prices are suppressed. The masses are still happy, they have $2 gas. Consumers have cash in their pockets. It’s all good – for now.
Production has begun coming in. China says they are down roughly 9% and are embracing cheap imports. US is down to roughly 8.5 mm barrels a day. If 2000 rigs got us to 10mm US barrels a day, do 400 rigs get us to 2mm barrels per day? No one is talking about the 22mm barrels of deep water depleting at 15% per year.
On the back end, what if new air and water testing regulations come through which are prohibitive to new drilling because the compliance burden is too high? Does US production ever recover? Obama killed coal through regs.
What if the Obama Admin shut in Coal, Healthcare, US Oil, and the Financial Industry?
Medicare worked. If they wanted something that worked, all they had to do was print more cards.
Coal was severely crushed by regulation. It’s not dead yet. But….
After crafting an environment where the V-bottom has been expunged, and machines prey on human order flow, DOL will further neuter the humans who bring in new clients.
Now, I’m hearing from oil guys that the new regs are prohibitive.
What if China pulls the fuses?
China just added another grid asset in Brazil to its collection of global grid assets. What if State Grid buys 80% of the world’s grid assets? Will central banks be able to print virtual money at 2am and 4am to reprice inconvenient values if State Grid pulls the fuse? China has been hoarding Gold, buying global grid assets. Somehow we are supposed to believe they are going to collapse into a debt spiral vortex of doom.
What if the capital flight is alleged capital flight? What if the PRC is quietly endorsing a land grab of real assets for confetti? What if hospitals and water resources are next? Anyone try buying back the Panama Canal?
What If Erdogan is going rogue?
What if Erdogan ran a false flag coup for the purpose of expelling American Forces and taking control of the 60 or so nuclear war heads at Incirlik? I don’t think Obama has the cajones to go get the warheads. He’ll surrender and play fight. There ya go, reverse engineer these…
What if the smart people in the south west look to relocate to areas with water?
Lake Mead is somewhere under 1075 feet. Rationing is on its way. As for water in the southwest and California, Mid-Michigan has the water, and the natural gas, and the food and the infrastructure, and the low cost basis, and the educational system. When you are ready to relocate your company and people, Mike Charlow is the straight shooter realtor in the region who has years of knowledge and the ability to get things done.
Hope you are enjoying your summer,
Todd Krajniak