money exits floating rate funds 05282014It’s Quiet…Just Quiet.

There’s a lot of “complacency in the market” (alt) talk going on these days, which might just be a reflection of journalists’ boredom.  That being said, apparently trading at big banks is pretty boring too: “large investors are retreating from the market, big trades are rare and price swings are shrinking…those factors have combined to reduce trading revenue, particularly in fixed-income, currencies and commodities trading, traditionally a profit engine for large banks…’People lack direction…there just isn’t a lot of movement.’”  Meanwhile, junk bond junkies are riding the risk gravy train to the top (alt): “among the 10 largest U.S. bond funds at the end of 2013, the four with the fastest growth in assets since 2008 held an average of 20% of their investments in bonds rated below investment grade…the chase for yield has pumped junk-bond prices up to near-record highs, leaving them susceptible to selloffs…One concern for regulators is that if hit with a wave of redemptions from investors. the funds could have trouble unwinding their bets in the smaller high-yield markets, where trading can dry up quickly when prices start to fall.”  Speaking of fixed-income, Wells Fargo would like bond investors to know that they’re screwed, no matter what: “if yields rise towards our 3.25 percent target, then Treasury bond returns will be low, if not negative.  But even if this target is not attained, yields are already too low for returns to be attractive, whether the market stays range bound or if the rally can be extended a little further.”  Also, floating-rate debt funds “saw their first outflow in 95 weeks in mid-April, after surging over the past several years as investors have anticipated rising interest rates.”  Meanwhile, Dennis Gartman, “publisher of an eponymous daily investment newsletter,” and “one of those folks calling for [a stock market] pullback,” is throwing in the towel: “It’s so silly for me to think I can call a correction…The market will correct when it corrects.  That’s what I’ve learned in my 40 years in the business.”  Maybe we should just let bulls be bulls?

Onshoring Is Really Real You Guys

“‘The U.S. is now Latin America’s natural supplier of LPG (liquefied petroleum gas).  Venezuela used to supply several Central American and Caribbean countries, but that’s not happening anymore.’…Total U.S. LPG exports rose 482 percent since 2007 to 332,000 bpd last year.  Analysts forecast some 450,000 bpd in exports this year and 800,000 bpd by 2018.”  Meanwhile, fracking in America has lowered the price of natural gas, but “what we haven’t seen yet is the industrialization that has come as a result of these low prices.”  The Wall Street Journal has offered to be your lookout and, hey!  Look at all the industrialization happening in Louisiana (alt): “it’s the tale of a company called Sasol, the former South African state oil company, which is embarking on what could be the single-largest foreign investment project in U.S. history.”  And boy has this remarkable tale got it all!  Exotic Nazi technology, South African apartheidists, Iraniam imams, man camps, bug-eyed economists…”We are building a Qatar on the Bayou.”  Bam.  Onshoring.  Meanwhile, “unfazed by a sharp decline in the yen’s value that makes foreign ventures more expensive, Japanese companies sharply expanded their investments in the world’s major markets, including Southeast Asia, the U.S. and the European Union.  One notable exception was China, where the amount of Japanese FDI shrank by 18%…US-bound FDI jumped 68%…the amount spent in the E.U. rose 32%.”

Drought, Disease And Food Prices

California is responsible for about half of the fruits and vegetables grown in the United States.  That includes 99 percent of all the nation’s almonds, 95 percent of its broccoli, 90 percent of its tomatoes, and 74 percent of its lettuce.”  “With every part of the state facing ‘severe,’ ‘extreme,’ or ‘exceptional’ drought,” many people are wondering when we will see massive food price spikes, especially in fruits and vegetables.  Meanwhile, meat prices continue to climb (alt): “pork prices have surged as a pig virus, which has decimated piglets in North America, has spread to Latin America and Asia.  Beef prices have also jumped as drought in key cattle rearing regions in the US, Australia and New Zealand has cut cattle herds in the face of growing demand.”

Millennials Are Annoyingly Liberal

A new survey suggests that “Millennials have such liberal and contrary views about social responsibility, personal wealth and financial institutions that they stand to reorder the priorities of corporate America and Wall Street…the great recession is likely to remain a formative event in the shaping of views toward Wall Street that will impact their approach as both workers and consumers.”  Meanwhile, you know how Millennials hate investing in stocks but they love being socially responsible?  Millennial bond investors can now sleep at night thanks to green bonds (alt): “fixed-income instruments to fund environmental projects…not only renewable energy projects such as wind farms and hydroelectric plants, but also in energy efficiency projects such as remote (smart) metering and the construction of integrated district heating networks powered by low-emission biomass plants.”  

GOOG: GoogleCar Has No Steering Wheel, No Brakes

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