Crumbs

• US real estate is motoring. Builders of low-end homes have done incredibly well. There is a high level of household formation, and this has resulted in share price increases of up to 74% ($CCS — Century Communities). This must be, at least in part, down to the availability of credit. The big national housebuilders (e.g. DR Horton, $DHI) have risen 36%. This fits in with timber prices going through the roof (as well as holding it up). The big player here is $WY, Weyerhaeuser. There is a mass of detail here but my takeaway is that housing and timber will continue to enjoy positive returns next year.
• Master Limited Partnerships (MLPs) have had a rough decade. Their governance is often terrible. There is some evidence that this is being sorted out. $ET (Energy Transfer) seems a good choice. More details here.
• My instinct is that nat. gas is going up, but the commodity is so volatile I’m keeping away at the moment.
• this is supposed to argue that Chinese stats. this year are even more fabricated than usual. For sure … but stonks just to up. Investing in China is for the very brave.
• $ARKK is now starting to fall. Maybe Crazy Cathy is crazy after all,

• The Russell is faltering,

• As unemployment rises, the job losses are almost 100% concentrated in that part of the population with the lowest educational attainment. Our rulers might know this, but they do not understand it as someone who left school at 16 with no qualifications does. It’s obvious, but it’s also here,

• junk bonds will falter. They just will.
• M1 money stock is rising at an unprecedented rate. Correspondingly, since the US is not experiencing any kind of economic growth, velocity is cratering. But the money stock will be difficult to get back into the bottle, and the stimulus checks (any advance on $2,000) are — surely — going to trigger some kind of pickup in demand, even if they are spent only by the people who don’t really need them. -

Wrap

US & FE equities mostly up, European equities down. Bonds globally flat. Commodities: mainly up, following crude. Industrial metals down, gold up. Dollar down (now DXY standing at 89.63). Generally risk-on, but muted.

Drivers: who knows, but probably vaccine hopes. Japan may have benefited from a few stories concerning shareholder activism. I think the main one concerned Toshiba, whose management has been destroying shareholder value for a long time.

Bitcoin is into the stratosphere. Tesla is up quite a bit. These two bits of vapourware show that a good story and sufficiently strong investor sentiment can keep an asset going up for literally years beyond the point where anyone concerned about value has got out.

$PAAS (silver miner) is experiencing violent volatility.