A couple thoughts
First on report day.
I think we are all trying to understand how the elimination of open outcry trading is affecting us. My first read thru of the report didn't make me really shudder. I saw a higher than expected total yield but I thought the balance sheet over the year didn't really make huge swings.
But then the trading was nuts.
I wonder if the computer algos just looked at yield estimates first and carryouts were secondary? I just didn't see the historical signifigance for this kind of race to the downside. Especially when after an hour we came back like we did. The reality of it is that those clearinghouses, brokerage firms made a lot of money off those moves. Do we need to maybe wait till the day after the reports to really look at the long term effect of what USDA has said and let the computers instant reactions be just for traders?
I never made it to chicago to see the board of trade in it's hayday. That is something I truly regret. Now I can go to best buy and see the floors kissin cousin.
On to chinese warfare.
I don't really think it is.
Not at least in the sense of a race to devalue currency to be able to ruin our currency.
In 2013 our interest pmts. were 416 billion dollars. Total USDA pmts that year were 156 billion (that includes all food programs which is the majority of the money)
China reicieved a big portion of that.! That is with historically low interest.
Remeber china isn't buying our dollar like it used to. In fact japan has again regained the top spot in treasury purchases this year. The vaccuum that has been created by the chinese backing out of the debt auctions means at some point Uncle Sam will need to entice new buyers. The only way to do that is to increse the reward by increaseing the interest paid. That really helps out those who hold the debt and kills those of us that must pay the debt. When I was born we had about 400 billion in debt. Now we have 18 trillion.
And each of us is to blame.
So now with CHina trying to compete with its neighbors more than us it needs to have a currency that is no longer tied to the USD which is near as I can tell tied to the currency basket. It used to be tied to gold, than oil now its tied to the promises of other politicians which have tied themselves to our politicians. China still needs that interest money tho.
So I still take a different look at things than Hardnox on this one I think we see an interest rate hike this fall. I also think the dollar moves higher along with it. Earlier I thought the dollar had peaked. Now I am not so sure.
Of course on Mon. a computer somewhere in a brokerage house may interpret the information completly differently and we will be once again ruined by machines!
Re: A couple thoughts
Ahh, details. A number of years ago, I attended a presentation of how NASS and USDA come up with their numbers. What I remember from that meeting, which means that I might have heard or remembered it wrong, was that both collect their information from the bottom up, but then determine what gets reported from the top down. In other words, information is gathered at the most detailed levels, grouped as it moves up the chain from actual source reporting entities for various reports, to county, to state, to national, then the national numbers are determined in the closed room, and the process is reversed. In reversing the process, the "determined" national number is the starting point, from which all other "determined" numbers must be derived, moving back down the chain. Thus, an individual state might actually report their anticipated production or yield as one number, but it could be higher or lower in the final "determination" from USDA, depending on how they allocate national production back to that state so that the end result adds back up to the USDA "determined" number. I remember that when I heard about this process, that I thought it all sounded a little bogus, especially since there is probably some statistical accuracy level in the original reporting process, whereas, the actual top-down process that ends up getting reported probably loses some of that statistical significance, (especially since the final numbers have then been subject to the influence of individuals with their own biases in the closed room). Yet again, maybe that was just a bad dream.
Re: A couple thoughts
I don't know why, but that part about the top down is the only part that kind of stuck with me
That part reminded me about that saying
Figures can lie and liers can figure
Re: A couple thoughts
Yep Time I caught that. Biggest thing here is the disconnect between oil dominated products and oil. The two just aren't following each other. That my firend is inflation. But in a way it is good if the normal spreads were in play there wouldn't be an Ethonal market. Every corn producer better hope we don't have gas drop under 2/gal.
Interesting deal on the dollar today. haven't had time to investigate fully.