Knowledge is the True Freedom

Posted by Capital Trading Group on Jul 3, 2018 1:44:41 PM

Happy 4th of July everyone and what we have seemingly been accustomed to by now, is the fact that holiday’s that come mid week, seem to wipe out the whole week in terms of productivity. Anyway for the United States, July 4th is the iconic symbol of national independence as it commemorates the signing of the Declaration of Independence in 1776. Despite being voted and signed on 2 days prior, we celebrate it on the 4th, maybe because that’s when the documents actual wording was approved. Anyway, speaking of wording, it seems as if the Preamble has been thrusted to the forefront with the election of one Donald John Trump. We highlight this part of the Preamble as being most relevant in describing the new administration from those prior,

“That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

 

For those that haven’t heard of “Q” or Qanon, we highly suggest you research it. This movement that has been ongoing behind the scenes is formidable and has gained a huge following not just here, but globally. Many main stream publications have come out denouncing, discrediting and mounting a clear disdain for any such conspiracies, but we know better. We know that there is always truth to something, especially something this large. We only mention this because it does effect business, it does effect markets and in life, knowledge is the true freedom. So let’s just say, we want you to know so you aren’t surprised. If you want to know more about it, @Prayingmedic on twitter is a good place to start. We will leave it at that.

 

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Why The Markets Are Not Correcting

Posted by Capital Trading Group on Jan 14, 2018 9:35:57 AM

          So let’s get to it, what did we learn over the past week?  We were informed by Intel that its computer chips were affected by a bug that makes them vulnerable to hacking.  All computers with Intel chips from the past 10 years are affected.  Considering that computer chips are basically the backbone and brain behind everything electronic including the entirety of the internet itself, this should be very alarming news.  We can’t say that we are surprised, we have said in many past writings that the internet itself will have to adapt to these internal threats.  Not to mention the internet security threats that future quantum computing presents.  To say that this news out of Intel is alarming, is quite an understatement and it’s why the future of technology will need to be completely and openly discussed by all major stakeholders.  This will take a collaborative effort, one by which profits will need to be set aside for the greater good.  Whether or not this can be achieved is another thing, but the viability of the internet, the Internet of Things and Artificial Intelligence comes completely into question now.  Intel’s stock price barely fell 5% and why should it, if these things need to be replaced, that means more sales and of course no rebates.

          Also out this week the AP reported that the FED projects $80.2 billion in remittance back to the Treasury Dept.  Here is a chart of the last decade in remittance.  As you can see the FED has paid back billions to its enabler, is it safe to say this is like a drug kingpin and his pushers…maybe that’s too harsh…Anyway the charts show 3 years in a row of declining remittance and one thinks we can just continue to raise rates, can you imagine this levered behemoth and its Dv01 crushing leverage if equities turn and interest rates rise?

 

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Bubbles no more. Fundamentals no more!

Posted by Capital Trading Group on Oct 17, 2017 9:58:55 AM

          In the chaotic world in which we live, we feel that investors tend to over hype the wrong things and under prioritize the right things.  For a decade now many investors have finally succumbed to the central bank narrative and the continued and never old mantra of “buying the dip.”  The truth has become so self-fulfilling, that there isn’t even a “dip” to buy.  Many pundits have attacked these global markets, have doubted the global markets and even more so have doubted the wherewithal of this rally.  See here is the thing about the human psyche, we humans tends to be risk averse, and we tend to question everything, up until the very end.  The funny thing about time, though, as it moves forward, it seems to leave in its wake, many investors dismayed, many in disbelief.  Many will say, I know I should have been long, I knew this market was going up, I didn’t know exactly why it was going up, but it just keeps going.  We have a feeling that many doubters, those patient risk averse, 60/40 allocating types have tossed in the doubting towel, especially over the last 2 years.

          Let’s just say the enticement has become too much, despite the fundamentals, despite all that is wrong with every value metric out there, who cares, just buy it!  Talk to your friends, talk to Joe Blow on the street, nobody and I mean nobody thinks the markets can fall anymore.  They say that it seems expensive, that it should fall, but it doesn’t, can you blame them?  We don’t! It’s typical of the human psyche to succumb to unwavering pressures.  In fact nobody we speak with calls the equity markets a bubble anymore, which means it’s just being accepted for what it has become, that is the defacto money market for the top 10%.  We get it, but one thing we don’t is why everyone we talk to calls Bitcoin a bubble, are they joking, a mere $100bln market cap and that’s a bubble?  It pales in comparison to the kind of rehypothecated capital that exists out there.  So don’t fall for it, let’s just end the bubble talk any further, for any market in fact, Bitcoin, SP500, Real Estate, forget it,
Bubbles no moreFundamentals no more!

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The Trends Roll On

Posted by Capital Trading Group on Aug 2, 2017 1:27:43 PM

As we count down the remaining weeks of summer, we hope you enjoyed a bit of a reprieve from these markets.  We hope you found some time to break away and enjoy the weather, enjoy an outdoor activity and found that there is life outside of our digital screens and everyday ups and downs of our markets.  We have the luxury of beautiful Lake Michigan here in Chicago and for those looking for some nice day trips, SW Michigan offers many an amenity as does Wisconsin to our north.  We like to take a break during summer and head up to Lake Geneva and enjoy one of the hidden, well not so hidden anymore gems of the Midwest.  This weekend was the annual Driehaus customer appreciation party which always offers some of the best fireworks of the season, sorry Richard, I let the cat out of the bag, but you do put on a nice display.  Richard is founder and manager of Driehaus Capital Mgmt here in Chicago for those wondering.  Hats off to his annual fireworks display as we enjoyed some never before seen pyrotechnics, great work.  It's always tough driving back to the concrete jungle but as our favorite fictional character Gordon Gekko (Wall Street 1987) always said, "Money never sleeps, pal!"   So despite the FOMC week, which presented nothing out of the ordinary, the markets seem to be stuck in an ever decreasing VIX and ever increasing deterioration of the global economic indicators.  As we have said time and time again, this market is centrally bank driven and thus, truly nothing else matters.  The only things that seem to matter are charts like this:

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Summer Doldrums

Posted by Capital Trading Group on Jul 26, 2017 10:15:10 AM

As we labor along these summer trading days, awash in great anticipation of the next FED policy move, we can't help but bring to light some of the driving facets behind the equity, bond and currency moves.  We believe that our readers must understand the simple fact that central banks are the biggest driver, not only as to the daily direction of bets placed, but as to the overall trends in general.  We heard for years how the plunge protection team didn't exist.  We heard for years that dope Steve Liesman, that FED butt kissing media spinning journalist tell us that the central banks don't directly affect the markets.  Now after 9 long years of ZIRP and $15 Trillion dollar major central banks balance sheets (not including PBOC), the markets are as frothy as ever.  We hear bubble talk after bubble talk, bonds are in a bubble, equities are in a bubble, Bitcoin is in a bubble. 

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