Lullabye for Wall Street $VIX, $QQQ, $SPY, $GLD, $DJX

Sleep softly Wall Street.  Child like naïveté abounds. There is only one direction.  That is up. NASA will be the first to tell you that rockets need fuel. When you exhaust fuel gravity takes over. But in the meantime sleep and slumber. Many investors will die in their sleep.  PE ratios at all times high. Can earnings really keep increasing. Oh and don’t forget margin debt which is at or near record highs. Margin debt is a gift from the devil.

Have a nice day.

George Gutowski writes from a caveat emptor perspective. 

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Amazon HQ2 Political Fallout $AMZN $WMT

Amazon ($AMZN) is considering a second headquarters which needs to be in North America.  Right there you have to wonder if they get globalization and the roles of Asia and Europe.

But here is the real problem.  The place will have 50k jobs. Donald (Make America Great Again) Trump will not tolerate a non US decision.  If not USA than the decision must be Canadian  The NAFTA negotiations are not going well. Trump will attempt to blow it up. Amazon will get caught up in the crossfire and become very distracted.  Given an absurdly high PE ratio this may just be the reality check Amazon investors have long feared.

George Gutowski writes from a caveat emptor perspective.

 

Amazon May Pick Montreal for HQ2 $AMZN, $SOCL, $CAD, 

Amazon ($AMZN) received hundreds of proposals for the backup /headquarters project. Who will win?  Take a look at Montreal Canada. It has the east coast time zone advantage. Close to populated parts of the USA. The secret sauce is very very cheap hydro electric power rates.  Cheap electricity has been attracting FANG and other companies. Amazon sucks a lot of juice. Real Estate is relatively cheap. Wage rates are relatively cheap.  Easy access between Seattle and Montreal.  More flights can be easily added. Francophone separatist tendencies seem to have died out. Montreal will definitely be short listed. Toronto and Kathleen Wynne take note. 

George Gutowski writes from a caveat emptor perspective. 

Barrick Gold Flash and Fury $ABX, $GLD, $GG, $NEM, $AUY 

Barrick is announcing but not promoting a resort facility on an old mine property two hours away from Vancouver British Columbia. That’s in Western Canada not far from the Pacific Ocean for the geographically challenged. Sounds interesting, ski resort, 12 month operations, gondolas in the parking lot, locally grown vegetables.  What the hell does this have to do with being a Gold miner.  If I want food lots of food companies around.  

Bulls make money. Bears make money. Pigs get slaughtered.  Sell this asset and maintain focus before you become someone’s dinner.

George Gutowski writes from a caveat emptor perspective.

After Tax Reform Does Trump Have Value. $QQQ, $VIX, $GLD, $SPY, $DJX

Assume America’s Political process lurches to some form of tax reform.  What else do we want/need from Trump.  Distasteful as he is; he will he be a spent force.  He has appointed a conservative to Supreme Court. He will appoint a new Fed Reserve Chairman very soon. Maybe even this week. War with North Korea. Maybe but once the dogs of war are unleashed the Pentagon will run the show.  Healthcare well lets just say the politicians can’t help themselves for now.  Trump wants it to crash and burn.

Other than more arguing what can he deliver even in a negative sense.

Economically if tax reform doesn’t kick start the economy Trump Brand will crash and burn just like that witch in the Wizard of Oz.

So if you’re looking for Black Swans this might be one of them.

George Gutowski writes from a caveat emptor perspective 

Canadian Finance Minister Morneau Embarasses Himself $CAD, #XLF, $XFN, #CEW

Bill Morneau the very rich Canadian Finance Minister embarrassed himself and the Canadian Liberal party.  He forgot to put his assets into a blind trust and appears to be in a position of conflict.  The guy is so rich that he forgot to declare a French Chateau as an asset. After much controversy he now announces that he will place assets in a blind trust. At the same time he is pushing a change in the tax code which appears flawed.  He forgot to think about farmers, small business people and family businesses among others.

OK so the blind trust solves today’s problems. What do we do with this brain? He has bad judgement. He has sucked up too much political oxygen. He is the finance minister of one of the few “AAA” rated economies. But acted like a banana republic dictator. It’s politically painful to watch the Justin Trudeau tap dance in support.  The liberal caucus must be very quiet as it sharpens stabbing tools.

Damaged goods if you ask me. What are the chances of a seat on a board of a large bank?  Not good!

George Gutowski writes from a caveat emptor perspective.

Netflix Wants to Hang Itself with Debt $NFLX, $DIS, $CBS, 

Netflix just announced plans to raise about US$ 1.6 Billion dollars of debt. Once we get past the school boy analytics of selected leverage strategy helping maximize shareholder wealth you need to pay attention to the terms and conditions. The debt market gets it right more often than the equity markets.

George Gutowski writes from a caveat emptor perspective.