OptionEye - Macro Outlook - Aug 12th

[ShelladyOptions]

Good morning. 

They did it again....

More moves to export deflation and import inflation. It is a race to the bottom. I think it is getting ever more increasingly clear that the Fed will have a difficult time raising rates. China off overnight, our stock futures follow suit. The S & P future is lower by over 16 points already this morning. And oh yea, we have the USDA today as well. Things are getting dicey. 

The 10 year yield signaling danger as it drops to 2.11% this morning. I think the next stop is 1.96%. 

Oil is up a tad after yesterday's big sell off. This morning it trades at $43.57 up .49 cents. Gold is higher as well to $1117.52 up $8.57. 

The dollar is weaker this morning to 96.40 down .88. 

We get MBA Mortgage Applications, JOLTS Job Openings and the Monthly Budget Statement. 

[BA Deere]

We really need to get our head in the game, with a global economy and China manipulating the Renminbi.  The irrational fear that many economists have had of a little inflation is outdated when trading partners aren`t bashfull in their manipulation.  This Keynesism system isn`t ideal, but it`s presently all that we have to work with.  This unfortunately, I think might lead to rumblings of a `global currency` to ensure stability in trade, but with that security we will give up sovereignty.

One presidential candidate appears to understand this. 

http://www.cnbc.com/2015/08/11/presidential-candidate-trump-china-devaluation-will-devastate-us.html 

[timetippingpt]

How will it devastate us? We import billions of goods from the Chinese, the price of those imports just went down 5%. Big devastation there!

We export virtually nothing to them except food which a 5% price change is meaningless. They have all the gold. They will buy as much food as they need. So, our exports are price inelastic and are imports are cheaper.

I love Trumps honesty. He honestly proves is he clueless at times. It is refreshing.

[BA Deere]

Well Time, I think Taconite prices are at a 6 yr low, ore mine layoffs, scrap iron prices half of what they were a couple years ago.  All those "Chinese ghost towns" doesn`t appear to need more raw materials. China was our #1 buyer of beans, we had a "Chinese put" now that`s gone.  China will attempt to grow their way out by exporting more and only buying more from us at much lower prices..

.IDK I think 400 layed off workers at one Iron Range mine feel "devastated".

[elcheapo]

mr. option.......hope your spots didnt fall off today.