Hiking – Scott trail to PCT to Lava Campground

https://www.alltrails.com/trail/us/oregon/scott-trail-to-observatory-via-pct

I completed this hike meeting a good friend who was going around the Sisters’ loop. We met at PCT and I hiked out with him to his car and then to my car at Obsedian trailhead. This is an excellent Sisters Wilderness hike – not too hard and the views from the north side are fabulous.

Starting at the Scott trail there were these weird flowers that liked like something from Dr Seuss. (note: clicking on the images will open the original high-res media file)

They grow in patches with long stems

Before reaching the PCT, the views both north and south are fabulous

Looking south to N. Sister

Toward the north, several others are viewable

At the PCT / Scott junction,

an alpine meadow with a pretty good view

As you walk toward Mckenzie pass and Lava campground the views are equally as good …

There is a wonderful small ‘lake’ … in Maine, it would be a pond.

At different points, after leaving the Scott trail junction, there are severe burn areas – some of these are like scenes out of the worst natural disaster movie … yet, there is new growth starting over too

A great way to end …

Mr Duy on Fed

This is another big FED week, but everybody seems to expect the same outcome … per Mr. Duy (seems consistent generally with others) – quote:

I think the Fed will be attempting to signal that absent a substantial improvement in the data, the ongoing risks will justify another 25bp rate cut (it would still be a hard sell for the hawks) and that this is expected to be that baseline scenario. But anything more than another 25bp requires more evident deterioration in the outlook or an intensification of risks.Powell will not want to feed into any perceptions that the Fed is already locked into 75bp or more of easing.

Bottom Line: Look for 25bp from the Fed this week with a signal that they are prepared to do more but that they remain data dependent and are not committed to a specific policy path.

When ‘everybody’ expects same outcome, the risk impact of a different outcome is very, very high … it’s just the probability of a different outcome keeps shrinking, lowering the risk.

A new financial blog

Jeff Miller in WTWA this week pointed to a blog I had not seen before http://scottgrannis.blogspot.com

This post http://scottgrannis.blogspot.com/2019/07/random-thoughts-and-chart-updates.html was excellent and gave me a ton to think about. Piling this on to a Heisenberg post this weekend is pushing my bias more strongly in the US investment grade debt.

Here is a chart of G7 projected growth to help (if you believe these numbers are even close)

Compete or stifle competition? – Lens #1

Update: I reflected on this post and find it overly filtered thru a win / lose lens, and there are other lens that can be used (like that fancy tool in the eye doctor’s office). There will be a second post shortly on same data but from a cooperative lens – Lens #2.

If you have confidence in your strategy and resources, then competing is best. It does not have to be a kill or be killed, but I think best to when all are focused on engagement and competition to derive the best outputs.

A recent view from Statista suggests that China is winning in the transition to renewable energy. I strongly believe that this will be a key predictor of the leader in the next 10-20 years.

https://www.statista.com/chart/18775/employees-in-the-renewable-energy-sector-by-country/

Infographic: The State Of Global Renewable Energy Employment | Statista

Cities, rivers, waste treatment plants and recreation

An odd view to a story of two towns (about 200k people together) unfolded this week. One town sits up-river from the other … both release their water treatment outputs to the river. There is a wonderful bike/walk trail all around the down-river side … and a wonderful beach where people come to play

This is down-river from BOTH treatment plants and is about 100 yards from the largest of the two treatment plants – probably the least safe water of the entire up-stream river to its source. But, this is where people want to come to play … odd

Mr Toad’s Wild Interest Rate Ride – July so far

Hold on to your hats folks; the ride has not ended yet!

Mott Capital published piece on their view of S&P probability, and included a great view of 10yr rates vs S&P dividend yield. While I am not sure i fully agree with their inferences, this chart shows another view of Mr Toad’s ride

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EV and metals mining

Not enough is being printed, said, discussed or integrated into public policy on the potentially unintended consequences of EV mobility. Bloomberg published an article last month on impact to Chile’s Atacama area.

With all innovation, it’s the unintended consequences that bit us in the rear … sadly.

Mr Duy on Fed – Monday 7-15-19

Mr Duy’s full article is worth the read today … his summary does not carry the same value imho https://blogs.uoregon.edu/timduyfedwatch/2019/07/15/still-looks-like-25bp/

quote: “Bottom Line: I am still anticipating a 25bp rate cut this month. Policymakers advocating for a rate cut do not appear sufficiently motivated to argue for 50bp while a nontrivial contingent doesn’t believe a rate cut is necessary. It appears that getting consensus on anything more than 25bp would be a challenge considering the current state of the economy.

Here are a couple of other good quotes – bolds are from source

It still looks like the Fed will opt for 25bp rather than 50bp at the July meeting. The message from Powell and others is that the primary motivation for a rate cut is a recalibration of policy considering greater downside risks while the underlying economy, in the words of Powell, remains in “a very good place.” A 50bp rate cut seems inconsistent with what seems to be the general assessment of the state of the economy.”

The same is likely true for the degree of cutting that occurs after this July cut.Again, the Fed is recalibrating policy, not reacting to a turn in the business cycle. At this point, only roughly half of Fed policymakers expect rate cuts this year, and then only 50bp. That argues for Evans’ “couple” of cuts given the current data flow. Obviously, weaker data will yield more rate cuts. At the risk of oversimplification, I would anticipate ultimately 75bp or more of cuts if the preponderance of data begins to suggest that the economy is slowing enough to push unemployment higher.

India population growth

GDP is powered by population growth – workers, buyers, innovators … Most of the developed world is slowing, shrinking in some cases (political questions withheld). From a portfolio management perspective, I acknowledged that I am woefully under invested in India. This just makes my error more painful

Statista followed up w/ additional info on India – this targeting United Nations multidemensional poverty. https://www.statista.com/chart/18680/the-number-of-people-in-multidimensional-poverty-in-india/

Infographic: Then & Now India's Fight Against Poverty | Statista

5G rollout speeds so far

Another great data slice from Statista on current speed updates … a small sample size for sure, but will be interesting to watch this over time.

and a projection of up-take over time by geography (source Ericsson)

Infographic: Global 5G Adoption to Take Off in 2021 | Statista

Confusion?

After all the Fed speak today, the current interest rate futures are a bit strange, maybe confused

Near term rates are surely going down (wisely or not tbd) yet longer rates are mixed w/ 10yr flat and 30yr up … the superficial interpretation: fed lowers front end, increases inflation and “perfecto!”. Such BS – nothing is that simple. I am holding capital until some of this falls out. Younger more risk accepting traders can get in the saddle – and many will make money for sure. I just, as i’ve said countless times, want a return of my capital, not necessarily fantastic returns on my capital.

Mr Duy on Fed

Quote: “Bottom Line: The data is not supporting a 50bp cut, nor does there seem to be much stomach for a such a move at the Fed. The story emerging is one of an insurance cut to reverse December’s hike. A 25 basis point cut this month looks likely; given the dovish direction of the Fed as revealed in the SEP, the odds favor still another 25bp, but that looks more fragile than I believe a few weeks ago.

this seems like the most likely scenario – anything less than this will get market pushback