Just Minted A Trillion - AMA

💡 The Lightbulb
Spend, Spend Spend!

Remember when China was about to back their currency with gold?

All the BRICS members were going to become commodity-backed currencies and replace the dollar. I read it on Twitter so it must be true.

It was never gonna happen

Why would any country willingly give up fiat power?

If your currency is backed by gold, you can’t just print a trillion units to fix things!

Improving urban infrastructure sounds a lot like tell your bank you’re 
re-mortgaging your house to do ‘reform’ work, when you actually want a new car and a holiday.

David explains what it all means:

@fink.tok

#debttogdp in China just hit 300% after the chinese government issued bonds to stimulate a slowing #chineseeconomy. #chineseproperty is a ... See more

This is just the latest step from Chinese authorities desperately trying to overhaul the economy. The puzzler is whether to take them at face value or not.

Nomura’s China economist Ting Lu said "Fiscal multiplier effects from spending on water conservancy projects is likely to be rather limited."

Which is IMPECCABLE logic.

The question is if those funds will actually be spent on water conservation or if they find their way into other funnels…

🧠 The Big Brain
Earnings Season = A Murky Picture

Microsoft was amazing. Google was pathetic.

That seems to be the market’s judgement. Bit harsh but it is what it is.

Do their earnings really tell us anything about the wider economy though?

Megacap tech co’s are so mega and living in the future that they’re largely disconnected from the drudgery of the ‘real economy’ that others have to concern themselves with.

Fortunately, there’s absolutely tonnes of value hiding within company earnings releases and calls.

Companies of all sizes will literally tell you what’s happened, why, and how they’re planning for the future.

There’s an entire world of information beyond the economic data…

Pro Premium Members: click here to read.

Subscribe to Fink Pro to read the FULL Big Brain piece, every single day (currently 20% off annual subscriptions).

⚡ The Spark
Will ‘THIS’ Ever End?

Whenever a market trend is strong and enduring, it’s common for the media to take note, and then shout loudly about it.

Right around the time that the trend ends.

Now, we’ve written before about the ‘proper’ magazine cover indicator that Brent Donnelly continues running to this day.

He’s tested a load of stuff & found that anything making it onto the front cover of The Economist is a good contrarian indicator over a one year period.

The premise is simple.

If it’s established enough to put on the front cover of a magazine,the trend’s probably running out of steam. Everyone who wanted to buy or sell has already done so.

Sometimes, you don’t need magazines…

You DO need to be good at figuring out the context though.

Back in July, we highlighted the WSJ accidentally calling the top of the US homebuilder boom (by calling it a boom)…

Ever since, the sector’s been feeling the heat:

The FT nailed a top of their own back in April, asking if “the extraordinary boom in luxury goods would ever end”

Right as it ended…

This is not coincidence.

It’s just how the media works. By the time you can honestly call something an extraordinary boom, (or similar) that story is OVER as far as market impact is concerned.

Likewise, by the time anyone feels comfortable enough to point out that top call, or laugh at luxury goods stocks getting annihilated over the past few months, it’s probably a good time to add those stocks to the watchlist…