Economics Fanatic

Long/short equity, deep value, event-driven, macro
Economics Fanatic
Long/short equity, deep value, event-driven, macro
Contributor since: 2009
Company: Disruptive Investor
If there is more rate increase with a weak economy, expect a big market crash. But fed is concerned about the markets with trillions of pension fund assets in equities. Anyways, in my personal view, they have lost lot of credibility.
In one way, monetary policy remains expansionary with real interest rates still negative. However, the markets want more than that in my view.
I don't see big concerns in Europe, but China can trigger a bigger sell-off and a deep economic concern. There is more hidden about China than known. However, equity markets are speaking.
There are economic factors, currency factor and geo-political factors that will determine the outlook for oil. It's difficult to talk about targets, but at this point of time, there are more negative triggers than positive triggers.
The global economy is a big bother. Even if oil production growth declines to some extent, the decline in consumption growth will imply that inventory glut stays.
Thanks for your suggestions and that will be incorporated in future coverage. On the cheer leading part, let's wait for 2 quarters with a disclaimer that broad market conditions (I mean S&P index) remain stable.
I will only quote Management expectations if my expectation is in sync with their expectation.
TNK will continue to do well as long as oil remains low or sideways. Worth adding on declines. However, I expect upside from here as markets discount new vessel earnings.
Eco Modification is being done for all newly acquired tankers and eco modification will follow for all tankers during their period of dry docking. Thanks.
Dividend elimination is to have cash buffer, which is good idea in these times. Any debt maturity will be refinanced. If sufficient cash buffer exists, Transocean can chose to pay off debt.
$3.7 billion capex is indeed old data. With 3Q15 results, revised capex estimates have been released. Thanks.
Unlikely. It was down along with broad market decline.
Broadly, I agree with Russell and that's why it's advisable to stay in the sidelines.
I agree on your point, but I focused on the oil & gas division as it was touted to be the EBITDA growth driver for the company. However, that is unlikely in the coming quarters.
I still believe that debt servicing will not be an issue even if oil and copper were to sustain at current levels for the next few quarters.
I believe there will be no rate hike in 2015.
Thanks for pointing out the mistake. I pulled the wrong ETF from my database. It has to be the Vanguard Energy ETF. Have submitted for correction. Thanks Again.
I am just judging the mindset of policymakers. Let the market fall by 15% or 20%, policymakers will rush to bail out equities with easy money. That's how it has been and that's how it is likely to be.
I understand your point on business cycles, but in my view, the intervention of policymakers is a big factor when you are talking about 1949-1956 as compared to 2015. Leverage is also a big factor when you compare these two periods. The point I am trying to make here is that the overall assessment is not as simple as the 8 year business cycle. Never in the history of capitalism has the world been so leveraged. There are lot of things coming in the next decade and many not be very desirable.
A weak dollar will have a positive impact on net exports that has been declining in terms of impact on GDP. While less of consumption might not be bad, it is certainly not what policymakers want.
It is difficult to talk about the next three months, 2 years is a long-time. But I do believe that the US economy will need stimulus in some form or the other to sustain growth, even if it means sluggish growth as compared to current levels.
"The latest slump in consumer confidence is a clear indication that the economy still has headwinds. I would again emphasize that I am not expecting a renewed recession, but the data in the recent past are worrying."
It is dangerous to take a biased view. Near-term data is negative and that's a fact. However, it does not imply very bearish sentiments. Another article for publishing talks about the positives amidst the negatives. We have to take a balanced view if we intend to generate robust returns from different asset classes.
China will likely cut interest rates...
I am happy for your gains, but you just need to remain cautious. Volatile markets can give handsome gains as well as big losses. At times, its just a matter of luck...Given the fact that the markets are constantly bombarded with different news, short-term trade can be tricky.
I agree with your point. But I am of the view that the financial sector is and will be in further trouble in China. That's going to impact equities significantly on the downside. Further, the impact of stimulus on equity markets is like a dead cat bounce. I would also wish to see market returns in a strong currency than a currency that is being devalued through money printing. So its not just one aspect.
In the last 7 years, there have been instances where the private sector savings has increased and subsequently declined. The trend in the last 3-4 months doe not imply a continued direction.
Congratulations to the winners. Unfortunately could not participate this time. But looking forward to more such opportunities.
There are views that the RBI has cut interest rates due to government pressure instead of acting independently. While I don't subscribe to this view, I completely agree with the point that there are several uncertainties surrounding the inflation outlook.
In particular, crude oil prices have a key role to play as higher crude oil prices generally translate into higher food inflation as well in the country (due to increase in transportation and related cost).
Having said that, my view on crude oil is as follows - If there is no significant escalation in global geo-political tensions, crude oil is likely to remain around current levels or lower in 1H15 and gradually trend higher in 2H15. Maybe its too early to take a call on 2016.
I will also add here that India's new government has thus far outlined a robust growth plan. However, investors will now look for implementation than just plans on paper. Success on that front will help the rally sustain.
SSLT is promising for long-term and I believe that decline in oil prices and general depressed sentiments for industrial commodities is a good time to consider exposure to SSLT.
India is certainly a growth story worth watching out. In some of my recent articles I have opined that Indian equities will be the best performing globally in 2015 and I maintain that view.
The upcoming budget promises to be transformational and I also expect another 75 to 100 basis points interest rate cut. Mr. Modi has been entirely focused on the development agenda and I believe that the results will start showing over the next 2-3 years given the point that first the damage to the economy has to be repaired and then the big growth comes.
Given the point that you are well aware of the Chinese economy and the fundamentals, I can say with conviction that you would be aware of the risks in the banking and financial sector. What we see now in terms of bad loans is just the tip of the iceberg.
The US equities (at least for now) are being driven by strong economic fundamentals and liquidity always remains a factor.
Chinese equities are largely driven by liquidity at this point of time. The IMF growth estimate suggests that China's GDP growth will trend lower in 2015 and 2016. Clearly, reversal in economic activity is not on the horizon and I believe that the liquidity driven rally will stall (sooner than later).
The article begins with the fundamental factors that have taken the US markets higher...And let's not forget, liquidity is a fundamental factor...Of course, the rally has been backed by company specific fundamentals...However, take the liquidity out of the system, valuations will suddenly go down to levels that will make no sense from a company fundamental perspective...