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As "Fine Wine" Rolls Over, Will Stocks Follow?
It appears that #FineWine is trending, because barely 30 minutes have passed since we posted the correlation chart between wine and gold, that Newedge sends out a comparable correlation chart showing that if one uses Wine as a leading, or even coincident, indicator for overall risk and (alcohol infused) liquidity, then the bottom is about to fallout of stocks. From NewEdge: "Bottoms up! One of our "fringe" indicators, the Fine Wine Index (based on the 100 most actively traded wines at global auctions) continues to sag here, making a fresh 1 year low for October.... Adding to the long list of indicators failing to corroborate the recent "risk on" animal spirits."
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Bottoms up pretty much sums up todays equities market as well. So lets toast to the next leg down.
Kenpai!
ORI
What would happen if the ECB and the Fed simply cancelled all Gov. debt owed to them??? Assuming they only did this once and since no private corporation would be affected what would be the result of this kind of "Haircut"???
inflation?
Inflation??? How so, you just effectively REMOVED a huge chunk of currency from the system and made no change to anything else. The Pie stayed the same size but a bunch of cash was removed. So wouldn't each peice of currency be worth MORE not less?
I will take a stab at the answer, but I suspect I am wrong. I would like to be corrected, because I think its an interesting question.
In the form of bonds, let us assume that the EU borrows 1MM from the US and the US borrows 1MM from the EU. When money is borrowed (in our present system) it comes into existence. So, in this case 1MM USD and 1MM Euros are created. This money is spent by the government on social programs, so this money circulates into the economy.
Now, if the EU and US decide to wipe out those bonds, the money generated by borrowing doesn't get pulled out of the system. That is to say the governments didn't earn the revenue and then use that revenue to cancel the debts (thereby removing the money from the system).
I would also point out that nations usually hold debt of other nations for foreign exchange reserves or currency pegging. So, if the EU traded all of its USD forex for EU debt and torched it, they would have no USD for international trade. China could do this, because they have such a gross position, but the US isn't holding any China debt, so its a moot question.
Regards,
Cooter
You got it in a nut shell, it's a shell game, three card monte with a Pittsburgh Playbook scam through and through.
Barring any external influences like:
It's not within their jurisiction to do that outright, but they are effectively doing that by monetizing debt and thus decreasing the real value of the debt owed to them and others. This, however, has very significant effects on private corporations and sovereigns for obvious reasons.
Why, it would undermine confidence in the ability of the central banks to serve as lenders of last resort, blah, blah, blah...
In other words, it's all about perception of solvency (even though they aren't, and will never be). Eventually, once PIMPCO and the rest of the "bond vigilantes" accept the fact that we aren't going back to the good ole days, they'll consume each other in a ZIRP4EVA world, where they earn income only from front-running gov. paper, or fees from "dealing" it.
the good news is that you will be able to toast the apocalypse with something decent
Mine will be a magnum of Ch Lascombes 1990....
Baby Duck in a brown paper bag with a mickey of rye for a chaser and two quarter pounders.
That should leave a mess.
"Bottoms Up" - good song from Nickelback
"Kiss it Goodbye" - another song that could also apply to today's markets.
I TRULY HOPE SOON FOR A FINE CALIFORNIA Cabernet Sauvignon, and in the mean time, i CHANGE for no to bad fine BORDEAUX, LA LEZARDIERE just about 4 us $ a Bottle, over here.
BURP
Exactly what I was thinking because I invented the Fine Wine Index back in 1997.
Explosion in Iran city Isfahan
Source...?
BBC story to follow..hints of nuclear plant unconfirmed at moment
@BBCWorldBBC News (World) http://a3.twimg.com/a/1322242965/phoenix/img/sprite-icons.png); height: 15px; width: 15px; display: inline-block; vertical-align: text-bottom; background-position: -272px -80px; background-repeat: no-repeat no-repeat; padding: 0px; margin: 0px;" title="Verified Account"> 'Huge explosion' heard in Iranian city #Isfahan, Fars news agency reports. Details soon:bbc.in/uaRrPa #Iran 17 minutes ago via BBC News
http://www.haaretz.com/news/middle-east/explosion-rocks-iran-city-of-isf...
Stuxnet 2.0?
Naw just the Jewish terrorists cells blowing shit up in the Muslim terrorist cells in Iran.
http://www.jpost.com/IranianThreat/News/Article.aspx?id=247315
I won't believe it until I hear it on the BBC.
/sarc
More rats leaving the ship...
http://www.boston.com/Boston/politicalintelligence/2011/11/barney-frank-...
Twime to get pwaid!
None of them are getting paid.
In Cali, fine wines are going for steep discounts. Muscatel will soon be out of business !
Wine is on a huge discount in Nevada too (50-70% off on mid/high end wines)... seems the recession hit the high flying wine drinkers with their H2 and Pruis parked out front.
Alcohol is one of the few markets where sales are up in USA, but they ain't buyin' fine wine.
King Cobra shares going up!
I partied with the snake once...only once, that one hurt bad lol.
Worse than floating down the gutter with TJ Swine?
how tight is the correlation between plant spirits and animal spirits?
I think you have Zerohedge confused with Reality Sandwich.
PPT don't do fine wine...
Using FineWine as a leading indicator is a little like using Sotheby's for the same.
Be careful, FineWine index is affected by release cycles. The expensive 2009 vintage is just reaching retailers, and this drags prices downwards.
Pop the cork.
... cop the pork ... (hic) ...
Sobering news from the world of inebriation: The technicals are overwhelming!
http://english.farsnews.com/
Fars news agency is reporting via BBC Ticker (TV) that an "Huge Explosion" has been reported in the Isfahan region of Iran
GE Mark 1 strikes again!!!!!!!111
GE - we take good things from life.
The shithawks are coming, Mr. Bubbles:
http://www.youtube.com/watch?v=3mx8eBZb9II&feature=feedrec_grec_index
Julian, what's a shit hawk?
Steady! Hold the course!
Dow back to 50 DMA and SPX not quiet yet.
http://www.bostonwealth.net/2011/11/28/dow-jones-back-to-50-dma-sp-500-n...
It is ridiculous to think that "better than expected" retail spending over a few days portends an economic resurgance. Much of the holiday spending frenzy was irrational and the sales levels are completely unsustainable. Let's see how many January credit card bills go unpaid.
100% FUBAR.
Yes, but a stock price plunge will sink gold and gold stocks too...that's just the way the herd sees it...
what is very interesting is that whenever the markets look like they will finally take their exhaustion selling move lower , some rumor or plan comes in to prevent the washout lower. I notice the same thing that happened in August- on the day the fed came out with fed funds to 0 until 2013 etc, the market did look ready for a big puke below 1050. Got stopped. here again same feeling. Maybe thats wrong but thats how i read the action.
Of course, every attempt to subvert the technicals because "they" know they work. Let the right shoulder fall below the neckline and spx 800 would have been a slam dunk.
Libations
grasping at the straws I see here
I have a question, I just joined after reading the many informative post on ZH. The general consensus seems to be that we are heading into a complete collapse, in order for me to be prepared is it best that I pay off/down my debt or run it up because it won't matter annyway?
Umm... firstly welcome. Now, how many passports do you have?
Only me anfd my wife , got to get them for the kids
Gotcha. Stay away from debt. Pay-off, default, whatever.
There has been some talk about running up debt and defaulting as way of "sticking it to the man" but in reality you do pay for this in many ways. The best thing to do in my opinion would be to buy physical gold, whether it is gold coins or bullion buy it hand over fist if you can. If you run up your debt that way, which I wouldn't advice, it would atleast be better than wasting your $$ on IPads and Plasma TV's
well all of this has just hit me suddenly, I guess you can say my eyes are now open, I have been spending money stock piling essentials,(food ammo) Gold is completely out of the question for me, My money is not that long, however I have been buying silver as it seems right now I can get more, as opposed to gold, I would have to get it grams at a time as opposed to Multiple ozs of silver. I have read that there is a silver shortage and that it maybe possible to see silver prices higher than gold, well I got that from http://futuremoneytrends.com/ a site that was reffered by a poster on here. Additionally I read that when/if the gold silver ration hits around 20:1 then trade silver in for gold. As my name states I am here to learn what needs to be done to prepare for whatever is about to happen and any and all advice is accepted. I have learned alot about how the markets work just from being on ZH for a short time, but now want to get answers to some of my questions.
I would advice devirsifying into gold as well, even if you have to buy smaller amounts (coins are fine because of the high cost buying in ounces) This year has shown that the silver market has a much greater degree of manipulation than the gold market (look at silver prices in April) so IMHO gold is a safer hedge against the coming hyperinflation.
In our situation, we chose to pay everything off – be debt free. And I have to say it gives you an empowered feeling. Fortunately, my husband and I are like-minded, so we were able to support each other through the necessary sacrifices. My only advice would be that you and your wife must be in total agreement on the direction you take. It won’t work if one wants to apply that extra $50 to the credit card bill and the other wants to go out to dinner.
Don t forget the cineese were keen buyers of fine wine. They like to demonstrate their sophistication by mixing burgundy with cocacola
Maybe Five Years ago they did. Not anymore, Hong Kong and Shanghai have some of the
world's most savy wine buyers and drinkers. They are starting to move beyound "The Scores"
and find some values.
Just look at the the increasing sales volumes of higher end Washington Washington and Loire Valley
wines to China in the last few years.
Strong retail sales on one single day of the entire year are causing a 3% pop overnight (when nobody is looking).
Americans must feel really good this morning to have waited hours in line to buy that $2 waffle iron...
Retail sales at 80% discount on one single day are causing this? Why the fuck is anybody still shopping any other day?
If retail can afford to rip consumers off with fantastic mark-ups, then why are retailers not paying their employees $20/hour minimum?
But nobody asks these questions....
Why? Why? Because it's all bogus! What a racket!
Sothebys (BID), one of the few stocks to flash crash higher! in may 2010, is an equally fine indicator. In fact it was a failed auction in 2007 that kick-started the global rout.
LTFD (Lick the F*king Drop)
Well I drank it down, under the table,
and said, "watch me now, I'm gonna read the label."
Can someone care to explain why PSLV is up 8% today and SLV is only up 3.5%?
Did anyone else see that PSLV spike? Pretty crazy stuff
That PSLV spike is pretty strange. It had a huge volume to it.
At any rate I'll certainly be uncorking a bottle of fine wine if the bottom does fall out... Maybe uncorking 7 bottles of cheap wine if it doesn't lol...
The real israel types get so giddy when they hear of explosions in Iran. Dancing types.
I'm not so sure this rally is a call for everyone to put their shorts out there again. It's all too obvious how easily this market is talked higher, and there is a possibility that the Eurozone might agree on a deal that saves it for the near term. Also, I'm not sure the US equity markets are the perfect transmission mechanism for all things bearish in the Eurozone. I'm more inclined to own some gold mining stocks at the moment and sit and watch....possibly fiddle..
Uhhh, that chart seems to indicate that it is the S&P that leads wine prices, not the other way around.
happy hour prices coming soon...
Remember that gold has been known to shorten one's life.
Red wine is now said to have a life extension quality (resveratrol).
Perhaps we should adjust our doom stash accordingly.
Prices on the first growths have been dropping like pepper-sprayed grannies for the last few months.
This in the face of another Bordeaux "Harvest of the Century" 2010.
Recent auctions in Hong Kong and Shanghai have seen modest declines too.
Very bad news if you can't pawn off your buying mistakes to china anymore.
The price of rice mirrors gold almost exactly. Closer than wine. Make a chart of it in US$.