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World Cup Effect
By Nic Lenoir of ICAP
It is a well observed fact that every time a country builds the tallest buildings in the world, or decides to venture into similar kinds of excess, it usually is a good sign of the end of a speculative era and is a good market top indicator. Similarly, we clearly had a run up in Chinese equities ahead of the Olympics last year as the country was building infrastructure to host the worl, and a whole lot more. Well, now get ready for the world cup effect. With 0.7% of the world population and 17% of the HIV epidemic, the country has a lot of problems and once the momentum post world cup abates we think the economy could tank pretty seriously.
Interestingly, the ZAR is currently pretty strong. USDZAR has recently tested its mulityear support and seems ready for the next explosive leg up. TRYZAR was brought to my attention as well and struck me because of the fact that the 200-dma has been an absolutely perfect envelope both in bull and bear markets for the cross since 2006. We are getting very close to a cross which would confirm the Turkish Lira is entering an appreciation phase against the ZAR. We would look at expressing these positions through long term options. If our view that the economy is going to roll over around the end of 2010 is correct, USDZAR will not only benefit from ZAR weakness but also from a flight to quality. This is a high convition trade macro/long-term trade, just like the longs in USDJPY we recommended around 88.50, carry trades in 2011 EUribor futures, and long Spanish/Italian CDS against short Irish CDS.
Good luck trading,
Nic
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Ironic to read something about an African currency when im reminded of the video posted a few weeks back how Zimbabwe(-ians?) are being to forced to pay in grams of gold.
And S. Africa is what, one of the top 5 leading gold producers? Aside form gold and diamonds, if the place shuts down, what other global impact?
My thought exactly. What would happen to the price of gold if S. Africa has a real mean slowdown after the Cup?
Yeah, Gordon was right a couple of weeks ago, not much time left to get physical.
that video still haunts my brain, especially this line: "I don't care about the gold, all I want is a loaf of bread."
http://www.youtube.com/watch?v=7ubJp6rmUYM
Non-issue. The World Cup is proving to be a bit of a letdown - most of the world is in a recession so aren't travelling, and SA is far away so many aren't keen to take the trip. There is a lot of road and rail infrastructure buildout in addition to the stadia, so at least it's not all bridges-to-nowhere. The biggest risk is a lack of power stations, but you can bet that it'll be a temporary problem as it's a huge focus.
There is something SA has that most countries don't - a fast-emerging black middle class. That's been a huge support for house prices both in terms of growth and relatively little fallout. Gold is a non-issue - a tiny part of the economy now. Platinum prices will probably have a greater effect in the long-term. Also, it's a cheap country in the same time zone as Europe - many advantages there.
World Cup? Whatever. Good for exposure, that's it.
"There is something SA has that most countries don't - a fast-emerging black middle class. "
what difference does the color of their skin make?
The host country top syndrome. Hmm, I like it.
post host olympic syndrome.
i think it covers sporting and athletic events in general, don't you?
i know who is going and has been investing (maybe that is a kind word) in Africa.
Didn't Greece have an Olympics recently?.....
Some say education is in a "bubble"...here is evidence on that side of the arguement.....in an infrastructure kind of way....
http://www.globest.com/news/1642_1642/chicago/184499-1.html
It's the World Cup, people. This Rottie says it's Deutschland uber alles by the end of the tournament! :-)
Unbelievable, finally a real topic on Zero Hedge. Zarrific touches 11.90 at the top and now is back under 7.50. Official demand rumored down in the low 7.20s. It really just seems to be a playtoy for UBZK. Although.
thanks TD for bringing up the subject of sport.
pretty ubiquitous subject matter, kinda calms the guyz a little. getting ready for a little eye candy for us females. males in their splendor. come on we all enjoy this form of entertainment. perhaps my porn, your gay.
Just for you, Velo... check out Kickette.com. Chicks posting pics of hot footie men and making lascivious comments about them. It's good stuff!
I suppose our for-male equivalent is footsiebabes then...
i got ya†
Friday 04/23/2009 FDIC Bank Failure Friday
Looks like IL won the sweepstakes this week. Over $1 Billion hit to the Depoist Insurance Fund (DIF)
No one even pays attention to Bank Failure Friday anymore. It's old news.
Wheatland Bank, Naperville, IL
Peotone Bank and Trust Company, Peotone, IL
Lincoln Park Savings Bank, Chicago, IL
New Century Bank, Chicago, IL
Citizens Bank&Trust Company of Chicago, Chicago, IL
Broadway Bank, Chicago, IL
Amcore Bank, N.A., Rockford, IL
babe, don't bring us sports fans down with the real truth.
let's embrace some crazy-ness on this planet. men performing in the moment.
really i am not fighting it, i am embracing it. as long as we have some fucking rich fuckers sponsoring sports and athletes and i can watch and drop out. i look forward to weekends.
And XLF is above 16 and RIFIN above (almost) 900.
i don't get a lot of dirty jokes either.
X League of Football (soccer)?
world cup could be the final act for a multiracial SA...
http://beforeitsnews.com/story/35660/Why_isnt_the_Mainstream_Media_Carrying_This_Story_South_African_Government_Planning_Zimbabwe-style_Land_Invasions_After_World_Cup.html
Getting people to buy back what you robbed them from is always a nice deal.
Nic, with your tools, could you show if the "sum of the parts" of the S&P (or Dow) add up to the performance of the index itself?
Something is making me think that they don't, but who knows.
Nic, look at your first chart closely; you see support, I see a massive parabolic head & shoulders. Careful, mate if that neckline breaks......
For all the paper bugs out there in ZH land, an old ditty from the depressionary past:
music by Harold Arlen.
lyrics by E.Y. (Yip) Harburg
Say, its only a paper moon
Sailing over a cardboard sea
But it wouldn't be make-believe
If you believed in me
Yes, it's only a canvas sky
Hanging over a muslin tree
But it wouldn't be make-believe
If you believed in me
Without your love
It's a honky-tonk parade
Without your love
It's a melody played in a penny arcade
It's a Barnum and Bailey world
Just as phony as it can be
But it wouldn't be make-believe
If you believed in me
Remember Nic, it's just paper 'n make believe...
Had problems selling tickets for the world cup. Seems there are sh*tholes even soccer fans won't venture into for the beautiful game.
In the supermarket of life sport should be found in the toy section. Sport has its place in a decent society. However there must be balance in all things. Sport that mutates into uber-professionalism and pure corporatism is a problem. The payments to some sportspeople are insane. The elevation of the gladiators has reached its logical zenith. Other people actually helping the world should be rewarded and praised for their efforts. Global professional sports are no longer on a growth curve. The citizenry is waking up to seeking more authentic experience rather than living vicariously through the "stars". The elitism of sport, art, music and creativity into some sort of cult-like worship that has happened over the last eighty years, and which has increased exponentially over the past ten years is regrettable. As I predicted five months ago crowds will be well down for South Africa 2010. The country needs great infrastructure projects. It can be a foundation and platform for the rest of the Dark Continent. With good management it will be able to project its influence. Africa has enormous potential. Bread and circuses only go so far. Interested readers should look up..."Entertainment, Politics and the Soul: Lessons of the Roman Games" by J.Rainsnow. (Not light reading but absolutely brilliant!)
yeah, and she is getting gang raped too‡
Professional sports are here to serve a purpose: that is painting a friendly face on competition. Every society has its own threatical stages. One of ours is sports.
Professional sportspeople (and their pay rises) are not over. It would mean that the needs for selling a friendly competition is over.
South Africa world cup is meaningless in terms of deductions. In the 1980s, the FIFA and co sold their project of globalization of football on the matter they would help the poorest up, developp their infrastructures and stuff... Of course, never happened and the wealth was funneled into wealthy corners of the Earth.
This world cup will be the last to be held in a poor country. All the others are planned to be located in Europe, North America and some parts of Asia.
Africa has zip potential. Developpment can be quantified in terms of required resources. Is there enough resources to developp Africa? Yep, there is. But there is not enough resources to developp this part of the world and maintain the western world.
DOW chart threatening to break out.
MARKET UPDATES:
http://www.zerohedge.com/forum/latest-market-outlook-0
with the recent murder of white farmer/activist mr. terreblanche (you translate) by blacks, the youth leader malema leading public choruses of the new top 10 hit, "kill the boer," the anecdotal tales of confiscated farms falling fallow due to feudalism, and the limited electricity available for gold mining, i say, sell now and buy when there's blood in the streets.
If the ANC go down the Zimbabwe path and confiscate the white famers property South Africa will be just another useless African country in ten years, unable to feed it's own people but full of natural resoucres.
Have a family member who lives in Johannesburg, been mugged about three times in the past two years, luckily managed not to get killed. The crime in South Africa is out of control, you don't stop at red lights at night or you will be a victim. The strange thing is that Cape Town is apparently safer than Johannesburg because the police in Cape Town are primarily of Indian decent. Go figure, strange world.
If you can email the recipe to developpment when their resources are needed vitally elsewhere, I am pretty sure they will welcome your lecture.
Full of resources? Less and less. A fairly sizeable of their resources have already been transferred out of their country.
Havent SA gold mines already peaked in their extraction capabilities?
Good luck to them. Myself I consider success easier in an environment of ever increasing resources than in an environment ever decreasing in resources.
look at Formula One. how many of you know that the "formula" is changed by the board of directors. they indirectly decide on the future innovations of the automotive industry. Rothschilds are involved. look at the sport. you tell a highly competitive, highly advertised, "looking for an edge" race team that the rules change, they will do whatever is possible in the most efficient manner. so.....big deal right.... the big deal is making ticket prices astronomical. it is a sport for the jetset. whenever they choose a new city.....think about where the funds will flow.