Archive for the ‘Broker Notes’ Category

Aztec Nachos

By Derek On February 3, 2012 No Comments

“Physicians are rather like undescended testicles, they are difficult to locate and when found, are pretty ineffective.”Susi Greenwood

The Macau gaming sector has been on a tear with January revenue rising 35% y-y alone, slightly ahead of forecasts. Compare this to former head of the brat pack, Las Vegas where gaming revenues are up only single digits last year. According to a Chinese gambler I know, there is a big difference between Macau and Vegas:

“Vegas is fun. Macau isn’t fun. It’s just serious.”

This is amply reflected by revenue composition in Las Vegas where gambling accounts for less than half. I guess the rest is hotels, hookers and hot dogs: “Nevada resorts earned 34.1% of revenue from food, beverage, and ‘other offerings’…” reads the official blurb. Macau reportedly has ‘other offerings’ as well but it primarily exists as a safety valve and a popular way for Chinese

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Killing Chickens

By Derek On January 31, 2012 No Comments

“Sometimes you have to get to know someone really well to realize you’re really strangers.”  - Mary Tyler Moore

The slow motion train wreck that is Greece has reached a very interesting point with Germany throwing down the gauntlet and insisting the Greeks give up sovereignty in order to receive their desperately needed (second) 130 bn euro bailout in March. Of course, the Greeks are up in arms over this and any politician that agrees to such a demand from a foreign power is signing his own death sentence. Implications:

1)       Germany is now willing to see Greece out of the Euro zone

2)       Germany is sending a strong message to the PIIGs (as the Chinese say, “Kill the chicken to scare the monkey”).

Angie” by the Rolling Stones, will be the song they start singing on the rocky streets of Athens:

“….Angie, you’re beautiful, but ain’t it time we said

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No Public Euronation

By Derek On January 11, 2012 No Comments

Procrastination is opportunity’s assassin”  – Victor Kiam

Given a choice of good news or bad news most non-psychopaths would choose the former so let’s look at the good news first.

1)       Persistent signs of recovery in the US

2)       European issues well known and largely discounted by markets

The chart for the VIX is intriguing. There is also a lot of cash sitting on the sidelines. Individual investors took out appx $100 bn out of domestic equity funds in the US last year and hedge funds are mostly de-risked and cashed up. It is interesting too, despite the last two days of risk asset rallies, the 10 year yield is still at 1.96%. A lot of safe haven money is still parked in Treasuries and that could provide the powder for a stronger short term rally this quarter. However, all the good news has one thing in common: it is short

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