Mystery Economic Theater 2015

[ewmayer]

@Ross: Indeed, diamonds are likely a pretty good proxy for the "economic optimism" (or lack thereof) at the high end. And since all official stats out of China must at this point be considered unadulterated BS, such proxies are valuable.

(BTW, "Bruce Cleaver" - what a great name for someone in the diamond trade. "'E's got a wit ye could cut a diamond with, does our Bruce.")

=========================

The Seventh-Largest Economy in the World Spirals Down | Wolf Street

Just in time for next year's Summer of Sewage Olympics! It looks like hosting the Olympics may well do for (or better, to) Brazil what it did for (to) Greece. Much like any proverbial bagholder, it looks like Brazil picked the approximate peak - at least the 'first peak' in 2007-2008, just before the SHTF in form of the GFC - of its oil-price-and-credit-based bubble to have its coming-out party by way of submitting its bid to host the 2016 Olympics. And as usual, bubble-headed economists - that is, most of them - are left scratching their heads as to why all that doubleplusgood GDP stimulation by way of "infrastructure spending" isn't helping to keep the economy out of a worsening depression, much less "reduce economic inequality" by trickling down to the unwashed masses. But I'm sure they'll learn from their mistakes "next time".

[only_human]

No one is hurting over lost oil revenues as much as Venezuela. It's scary right now.

Elsewhere, Russia and Uncle Sam are getting into it too:
U.S. adds Russian oil field to sanctions list

[kladner]

It sure is 'interesting' that the US government is still beating the drum of Russian aggression in Ukraine, even though it seems aggressive tactics are practiced by all the parties.

On the other hand, they still have not released the satellite images nor any other decisive intel on the shoot-down of the Malaysian Triple 7. "What has it got in its pocketses, My Precious. We wonders, yes, we wonders."

[ewmayer]

Inside Amazon: Wrestling Big Ideas in a Bruising Workplace | NYT

NC's Lambert Strether comments:

Notice the lack of agency in the headline. Shockingly, Jeff Bezos has created a dystopian hellhole:

At Amazon, workers are encouraged to tear apart one another’s ideas in meetings, toil long and late (emails arrive past midnight, followed by text messages asking why they were not answered), and held to standards that the company boasts are “unreasonably high.” The internal phone directory instructs colleagues on how to send secret feedback to one another’s bosses. Employees say it is frequently used to sabotage others. (The tool offers sample texts, including this: “I felt concerned about his inflexibility and openly complaining about minor tasks.”)

Worse, the “winners” in this environment will then metastasize through the rest of the workforce.

And Clinton-era labor secretary Robert Reich weighs in on the same theme.

[Nick]

We don't do business with Amazon, favouring our local bookshops instead.

[kladner]

I have long favored our local independent book store, but I got a final push to avoid Amazon when I read about the conditions and treatment of workers in a Southern California fulfillment warehouse. These included high temperatures, and extreme pressure to "Pull, Pack, and Ship" merchandise, to the point that bathroom breaks were considered a luxury, not a necessity.

Now I try to steer away from Amazon when I order things on the job.

[ewmayer]

Trio of China-related pieces:

o The Man Who Got China Right | NYT

The problem with being right on the skeptical (= short) side is that because every aspect of markets is tilted toward the buy&hold and buy/sell/buy-more (= long) side of trades, shorting has huge opportunity costs, hence timing is crucial. The truism "the market can stay irrational longer than you an stay solvent" is true for all options trading, most especially so for going short, whether directly via options or indirectly via inverse ETFs.

o China Crash: You Can't Keep Accelerating Forever | Steve Keen's Debtwatch

[Actually, in relativistic physics you can in fact keep accelerating forever, but Keen is discussing economics on a finite planet.]

o China's market Leninism turns dangerous for the world | Ambriose Evans-Pritchard, Telegraph

Re. AEP's latest: I posted (by way of fwding to Yves Smith at NC, for inclusion in her next Daily Links collection) an even-more-bullish "China is in recovery mode!" piece by Pritchard last week, along with the comment "I think AEP is being wildly optimistic here, but time will tell." A week later, and AEP is still optimistic, but has now started to hedge. He laughably trots out the "self-perpetuating crisis of confidence" meme, but what is really happening is s self-perpetuating crisis of reality finally, belatedly, intruding on misguided, wildly amok-running confidence, confidence which has been stoked by governments, central banks and their paid shills in the economics profession and the MSM, who never met a speculative bubble they didn't like (while strenuously denying existence of same all the way up and much of the way down, each time).

And what does AEP think may yet rescue China from this dire, irrational loss of confidence? Why, the real estate sector, of course.

I'll go with Steve Keen (who correctly points out the crucial differences between previous Asian crises and China 2007 vs now) and the under on this one, thanks very much.

And on a lighter note:

Shoddy Chinese-Made Stock Market Collapses | The Onion

[science_man_88]

Originally Posted by ewmayer

Trio of China-related pieces:

o The Man Who Got China Right | NYT

The problem with being right on the skeptical (= short) side is that because every aspect of markets is tilted toward the buy&hold and buy/sell/buy-more (= long) side of trades, shorting has huge opportunity costs, hence timing is crucial. The truism "the market can stay irrational longer than you an stay solvent" is true for all options trading, most especially so for going short, whether directly via options or indirectly via inverse ETFs.

I think the problem with short selling ( don't get me wrong I short sell a lot in the simulator) is that in the real market it's frowned upon as it goes against normal market direction and if too many people do it for any one stock in theory all it takes is more people wanting to short it or someone wanting to buy into it to cause a short squeeze for example in the simulator I forgot to clear a stock by the end of the day and though I told it to sell at market open by the time the volume needed to trade out of the stock completely got around the price had changed enough ( it was a short selling I think) in the wrong direction for the trade that the 5700 or so in gains it said I had at the end of yesterday if I closed it went about the same in the opposite direction.

[ewmayer]

Originally Posted by science_man_88

I think the problem with short selling ( don't get me wrong I short sell a lot in the simulator)

No offense, but playing the stock market in simulated mode is like a surgeon trying to learn his craft by playing Operation. Making and losing real money - especially your own - brings a whole different aspect into things, the crucial 'investor emotion' one.

[LaurV]

Originally Posted by ewmayer

No offense, but playing the stock market in simulated mode is like a surgeon trying to learn his craft by playing Operation. Making and losing real money - especially your own - brings a whole different aspect into things, the crucial 'investor emotion' one.

True! (being Forex trader for years, with small money).
Also, except for the money market (where the broker is lending you to sell short, there is no "physical" sell-short), in other markets you can only sell short on an up-tick. In some markets you can sell (physical sell, shares in your hand) on an up-tick (to avoid panic sell).
Edit: investopedia is a very good source to learn the abc...

[xilman]

Originally Posted by ewmayer

[Actually, in relativistic physics you can in fact keep accelerating forever, but Keen is discussing economics on a finite planet.]

You can in Newtonian physics as well. You don't even need to add or remove energy to the system.

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