Andy Bebut

In the western world the consciousness of the catastrophic effect of any tragedy similar to Fukushima usually fades fast. A few months, half a year is usually all it takes. However this time is different– those famous 4 words. Or maybe not? The 1...
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Previously was discussed that Chinese economy depends mostly on real estate and infrastructure development for its 10% GDP growth, while the export cannot growth that fast. The real estate shows all signs of a major bubble, however more research is nee...
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In the previous part I discussed the balance sheet of the People Bank of China. Relative to GDP, PBC book is about 4x times bigger than Federal Reserve, with most of the assets in dollars and most of the liabilities in Yuan. In Spring 2010 one of the B...
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In the part 2 I was discussing the dollar peg. Today the topic is the dollar sterilization. How does sterilization work? In order to avoid excessive inflation Chinese dollar asset purchases must be sterilized. It is done by increasing bank reserve requ...
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In part 1 of this article I wrote that I believe in strong monetary cooperation between all three reserve currency stakeholders:  the USA, Europe and Japan. As Japan is suffering the most from deflation it got carte blanche from other two to engage in...
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Nobody knows what will happen. The discrepancies of economic predictions are at a record high. From deflation to hyperinflation, from the Euro getting destroyed to the dollar death cross, from idiotic “new normal” to idiotic Ken Fisher. But...
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The question being asked again and again to almost every guest on Bloomberg radio in the past few weeks is: should we turn toward fiscal prudence or should we stimulate the economy no matter how large the deficit will be? The answers split, though it...
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I don’t want to repeat Dylan Ratigan’s description of the financial sector as  a “con job”,  or something I wrote, as a  “financial ring“.  Instead, I want to describe the warfare that Obama is undertaking with t...
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Greece is virtually falling apart but nobody’s watching. Today I’ve spent 15 minutes listening the Jim Cramer show, (which was quite an accomplishment). He did not mention Greece in the first 15 minutes (he later answered to my tweet and c...
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Please don’t take this prediction too seriously but I think the “Phrase of the Year” will be something like–  “… is struggling to hedge its exposure” and hence the “Word of the Year” will be some...
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The World is partying like it is 2007 all over again. The reasons are two: the crazy money printed by Helicopter Ben and the moral hazard produced by the universal bailout of everything, everywhere. I still see the traces of sanity in the US consumer...
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The spectacular rebound in oil prices in 2009 could be attributed to two major factors: fears of currency debasement that lead to excess hoarding and speculation; and discipline of well-oiled Opec members to cut production. You already know from many p...
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Last year I was not making making predictions for 2009, mostly because my call for 2008 was ridiculously correct and I had nothing more to say.  But this year will be different and I’ll try to make some predictions. The most important point to...
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The big financial question that every econo-blogger must be aware of is: how come that the proportion in profits in the economy as the whole that the financial industry was taking was constantly increasing all the past few decades and yet this same fin...
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As almost all WSE authors posted their view on reverse REPO announcement, I think I have to post my take as well. Yes, in general I think it is a warning to some of the most leveraged carry-trade players. But my view is a small refinement in the same d...
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As the internet is full of comments on the default of Dubai World corporation and the S&P futures are down by 22 points, I assume that you all already know what happened, so I’ll jump directly to the conclusions. Calling this post “The ...
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The number of blogs commenting on dollar vs stocks inverse correlation is approaching infinitum. I won’t try to summarize what I found, I just want to place some accents. First let me post the short-term correlation chart (source): The correlati...
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We all hear from all possible stock market advisers and economists that the market discounts all news in advance, essentially validating the tradition to call news “newsnoise”. And I totally agree with that. However I also hear as many times that the market discounts  fundamentals well in advance. And here’s the problem. It turns out that...
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All you need to know about Program Trading but were always afraid to ask. There is a lot of confusion on the internet about program trading and I have the impression that many people who seriously discuss it in fact are not directly involved in it. So what is program trading? In the past, when you...
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Every time I hear about the Fed dual mandate I feel it’s part of some kind of “find hidden words” game. The real thing is not what they say The dual mandate says “maintain price stability” and “empower the maximum employment”. Immediately confusing, because I see nothing dualistic here. It never happened in history of...
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I’m very confused. Usually the press is a big contrarian indicator. For example the euphoria about economy makes me think that the stock market is a toast. But the abundance of bearish materials on oil (like this one) is very confusing. It would suggest that oil should keep going higher. But I don’t believe that....
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There are two stories that I’ve posted in my feed (the link at the navigation bar) – one is that China just made a bold statement about Ben printing money and another that monetary aggregates just turned into freefall mode (i.e. we are witnessing the start of the classic deflationary spiral). What to make of...
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As the market just (most likely) formed an important intermediate top it is the good time to celebrate the end of this recession. The bear market rally always ends on perfect news. The end of the recession seems good enough to me to mark the top. The article I’ve linked above is the perfect example...
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Just one simple chart to see how the triple-leveraged financial ETF from Direxion was perfoming during the rally from March lows: The performance is compared to simple, not leveraged financial ETF (XLF). As you can see the slippage is amazing. I’m curious to know what is your downside target for the correction (if the correction...
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The best interpretation of the Fed statement I saw here: Dear Banksters, We want our f*** money back before October. If not, we will monetize it and have FASB board bring back stricter accounting rules. Do you f*** understand? Now get a move on selling your $2 trillion in equities, you don’t have much time. Regards, Benny P.S. Jamie...
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I hope that the global fast-food franchises is the American invention. Just to be proud about something. And I’m inviting to check the health of our biggest and most important franchise – the dollar. Please keep in mind that United States is the only country in the world, which is not trying to push its...
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Jim Cramer is the wisdom of CNBC, I love to citate him again and again. First link: Pushing toy stuffed bears through a meat slicer, the screaming, peripatetic CNBC anchor Jim Cramer declared that he “had unbelievable guts to call a bottom,” and said: “I am indeed sticking my neck out right here, right now, declaring emphatically...
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This is the follow-up after my post on the role of the dollar as the international reserve currency. I was arguing that the logic of the world trade was pulling the dollar out of United States to facilitate all foreign transactions and that had an adverse effect of forcing the huge trade deficit. I...
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All the last two years I’m writing about Kondratieff wave on the regular basis, and as a former scientist I’m trying to abstract from any particular economy as if K-wave just happens every time and everywhere with equal force. But it simply doesn’t work that way and again, as a former scientist I want...
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Back in 2007 I was writing that during the Kondratieff Spring, Summer and Autumn Treasury bonds and stocks are trading generally in the same direction, with bonds leading. During the Winter they are trading in opposite direction. At this chart the black line is 10 year bond price and red line is S&P. You can...
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