Sberbank: The Hunt for Green November $SBRCY $SBER (MCX)

And now for a pariah I have been watching for months, just as I have crude oil and the chart to watch (see first post).

This is the largest retail financial intermediary ready to go from single digits to double digits in Putinstan. I recall Jim Rogers talking about parking his money in the biggest bank for it would be the last to go. Well, we’ve had sanctions, dropping oil and who knows what kind of palace intrigue going on and people still gotta go to the bank. We still need to deal with fiat (relax, I have the “yellow dog” tucked away in a bank vault just like those of you who have it buried in the backyard along with your cache of unlicensed armament but I still need paper money too.) And yes, I’ve noticed bitcoin (hello capital flight + liquidity seeks the inflating asset) but let me return to this idea.

From all accounts this has been “cheap” and for good reason. Price is finally saying, well hold on tovarisch this purge might be over.

That’s my boring 2 indicator and 2 arbitrary metrics format, the 10 and 50 week SMA and ADX and RSI. Could there be a selloff/consolidation/etc etc? Yes. But I also think there is potential for accumulation for those who were to terrified a few months ago when there was a Swan Lake Dive along with black gold 12 months ago.

That’s the disreputable stock market proxy for crude oil. ETFs and ETNs have flaws but we’ll use this to show the dance these two had.

An aside on crude, which you ALL know about already but it has to be brought up.

That’s another inadequate proxy, the USD Index. It’s NOT the trade weighted USD but it will have to do to demonstrate just how much of this dance has had a third partner.

That which has been in disrepute becomes forgotten and there are fewer and fewer sellers. Pariahs become paragons and vice-versa. Notice how many leaders and heroes have been whacked? Notice how many “legitimacy” questions hover over so many investments? Whether it’s about scrip pipelines. the likelihood of FDA approval and success, of justifying yet another round of funding or whether or not one’s products were compliant, there is nothing like the greater dance of hero and heel, paragon and pariah.

This bank is big, cheap and not going anywhere, just like the sad scraps of savings left within their digital vaults after so much damage. This one has been tossed aside like rotten fruit. The seeds buried under all that selling and disgust could provide strange, lucrative fruit.

(Note on painting: 1986 Ripening Pears and Kremlin)

I have been granted a junior commission by The Fly and iBC High Command has me seconded to the Peanut Gallery as another contributor. I thank Le Fly et Compagnie for the opportunity. I am grateful for the opportunity and hope I never let the site and crew down, lest I hear the faint transponder signal of a suborbital laser cannon approaching overhead.

AND NOW for my first chart and post. For me, from my weekly price bar, SFT trading (as in non-HFT, not water cooled servers in a datacenter) wheelhouse, the following notion has been among one of THE CHARTS to watch.

YEN $USDJPY $FXY $6J_F the UN-Renmenbi

I have been witness to and in disbelief of two monster ramps in this pair and I begin to wonder if finally the BOJ bullets are all gone or will Kuroda and crew relent and yet again push the button.

I read about the “Canary in the Coal Mine” South Korea stats from this morning’s noise/news and it made me wonder about China. Regarding the Middle Kingdom, post 5 year plenum, a giant economy, run by third generation billionaire cadres, making a turn from ghost city construction to a souped up baby-stroller, baby formula, soccer-camp, keeping-up-the-Wangs economy, with blue water naval capacity is a slow supertanker turn. It’s gonna happen but there will casualties. Caught in the wake of this turn is the former empire of the Rising Sun, with increasing senescence, xenophobia, aging shinjuku “dimes” looking to extend their adolescence and reproduction, and all of it eking out relevance with a bloated balance sheet, replete with JGBs courtesy of the dutiful masochistic salaryman/savers. Throw in the salutary effect of cheaper Euro on heavy industry and other products beating out Japanese exports and you have something to watch.

WTF do we care? Ok, you know about the carry trade. You know about the geopolitical order of interest rates. You know that every currency pair is also joined at the hip with rate policy. And that leads straight back to US, as in U.S.

Take a good look at this. It’s a weekly chart, just 2 averages and 2 indicators below. In two recent mega moves, where price moved far from the 50 week, the “trendiness/age” of the move, ADX, showed how price brushed aside RSI’s “overdone””too much””slow down” and kept going, courtesy of BOJ.

Here we are, prices are at the averages, ADX and RSI is tepid. We are wait and WATCH mode from a weekly perspective.

I am inclined to think things here in ‘Merica are somewhat more robust BUT I see the cracks already in VC land and an eager Private Equity sector ready to cash out (free at last, free at last, thank God almighty liquid at last shall be their refrain) which leads me to revisiting the stress we abandoned in September about Janet.

RE: Janet

Will she or won’t she? (The same question we asked ourselves in high school, or middle school, for some of you more criminal precocious types) but with interest rates. I am inclined to say no. “But it has been so long and we have waited for so long.”

If Mariner Eccles, a conservative, successful former businessman who helped build the Hoover Dam, who pissed of Keynes at Bretton Woods, and a fervent laissez faire guy, gave in as Fed Chair and got in touch with his inner Bernie Sanders to deal with the Great Depression, then I hold out no serious hope in today’s age that the Fed will hike. BUT could happen. BUT really it might not matter IF other Central Banks decide to keep on doing what they have been doing.

All you have to do is not run if everyone else is going backwards. You could almost stand still. And there it is.

I wait for signs for ramp-up or break down over the next few weeks in this pair. I wait for the BOJ or stand pat. As you see, this kind of thing can then play out for MONTHS.

More thoughts later on a variety of subjects.

I thank the honorable Fly and the iBC high command for being posted at the Peanut Gallery encampment. That is all.