The dollar rose by 9%, oil declined by 45%, and king coal dropped by a staggering 55%. The only commodity that bucked the preverbal trend was cocoa, rising by 9%–as African tribal leaders shoot each other for control of the cherished crops.
Make no mistake, a drop of this magnitude is bullish for the U.S. consumer, who benefits from the dramatic decrease in input costs.
The CRB Index, new lows attained on a daily basis
I see the CRB index, and then I look at the retail numbers coming out of the shopping mall cadre of dysfunctional retailers and ponder to myself: “where the hell is the money going?” Clearly, it isn’t going into casual dining, as those stocks have been less than inspiring, down 10% for the year. Retail stocks are off by 30% and Amazon is up 100%+.
Bingo!
All of the savings is going directly into Amazon, as Americans transform into a cavernous hermit class of people, couch bound, watching Netflix all day, ordering random items from the luxury of their Amazon apps.
Of course there’s also the specter of $500 billion of oil and gas debt becoming distressed, rippling its way into the general economy, ravaging stocks, reducing the world to a dystopian society reminiscent of the dust bowl days of 1932.
I remain confident in the yield curves ability to invert.
So, if I’m right about possible recession (give recession a chance, lads), the yield curve will invert, making TLT a winner for 2016. Aside from that, I will let Exodus be my illuminating mining helmet, as I explore the treacherous catacombs and underbelly of this insidious market.
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Fly, I remember a few years ago you tried a similar OB/OS technique using the PPT. My recollection is that it wasn’t very successful. Is that right? You must be confident that the algorithms in Exodus are much better. Any comment?
I don’t know where you get your heroin to smoke, because that never happened.
I once traded the OS/OB using options in 2012, for my personal account, and turned 100k into a million, live on the site.
Consumer energy savings IMO is going into healthcare and rent. By the way, the “savings” is not uniformly spread across the country. In far northern CA (and probably other less accessible markets) gasoline prices increased double digits despite a 20% decline in crude prices. Tanker operators able to keep the price sticky.