Alternative Thinking on Today's Market Events
The Daily Alpha - 09.17.15

Alternative Thinking on Today's Market Events
The Daily Alpha - 09.17.15

Garrett Baldwin

Today's Alternative Thinking on Interest Rates, Maple Syrup, Real Estate, India, and Whiskey.

1. "The market reaction will likely be violent either way."

Regardless of what the Federal Reserve does today with interest rates, CNBC is getting ratings. Jim Birdsall, the network’s voice, has been dramatically reading scripts about the rate decision as ominous music plays. Anchors are offering countdowns -- two hours, "one hours," less than 45 minutes... 

With this much media enthusiasm, the hosts of Power Lunch are going to burst into the studio through a large paper banner with a giant peacock on it.

Event after Janet Yellen speaks, CNBC will talk about interest rates for the next year with the same solemn trust in centralized planning that gushes above a white-and-blue ticker tape that no one has read since the invention of Yahoo Finance.

Today's interest rate decision has traders holding their breath, which, by definition, reminds us all that the central bank is the center of the universe – and has been since the onset of a financial crisis that it completely missed ahead of time.

Isn't that the actual problem going on today? 

Here's Reuters on how different asset classes are moving ahead of the decision.

CNBC was still asking guests 30 minutes ahead of the rate announcement of what the central banks should do… Are there no other ways to make money regardless of what the Fed decides to do today?

Actually, yes. Yes, there are.

A friend offered his inputs on playing ongoing “rate uncertainty” in March, which is proof of just how long this rate uncertainty has lasted and that – yes, rate fatigue has set in.

2. "It's blue on the Monopoly board. No one has created something like his." 

Now all Citadel founder Ken Griffin needs is a top hat and a swirly mustache.

Finalternatives reports, “Ken Griffin’s Citadel announced earlier this week it has leased 200,000 square feet in a new luxury office tower at 425 Park Avenue. The building will take up an entire block along between East 55th and East 56th Streets and rise 900 feet. According to terms of the deal, Citadel will be paying a record level of rent: $300 per square foot in a deal that will include its luxury penthouse.”

The deal shatters the previous record on square footage by roughly 50%. And it’s is further proof that New York’s high-end real estate market doesn’t have a ceiling.

What does $300 per square foot get you?

Amenities will include a lounge solely for tenant chauffeurs, mediation rooms, and fresh-pressed juice every day. How many people will be looking for a career page on Citadel's site later today?

3. "I think climate change is an element, there’s no doubt about that, but it’s not the primary mover."

Last night’s GOP debate touched on a subject that is very sensitive to the base: Government’s involvement in climate change policy.

The usual barbs were thrown out, but fall flat. For example, many candidates have argued that China will not cooperate on any initatives to adopt alternative energy. However, China is dominating the U.S. market when it comes to alternative energy.

Regardless on one’s position on this debate, as alternative energies move toward parity with their carbon rivals, nations are increasing their exposure to clean technologies not only as a policy, but also as a strong alternative investment…

Renewable Energy Magazine has a good interview today with Bob Smith of Mytrah Energy, and the case for alternative energy investment is made for India, a nation with a lackluster energy infrastructure and surging demand. In an economy with no direction to go but up under its new Prime Minister, this becomes a very interesting opportunity.

4. “The Irish whiskey distillery, which will be a $50 million investment for the company, marks its first distillery outside of the United States.”

American company moves to Ireland to expand into nation's upstart whiskey industry... 

Wait... they are aware they've got this covered, right?

5. “The next three-to-five-cent move in the Canadian dollar is up, and that may be the last chance we get to buy U.S. dollars at 80-cents or better for a number of years."    

Well, this conversation escalates quickly into a spiral of sadness for the Canadian loonie.

John Johnston of Davis Rea takes a highly bearish outlook on Canada’s export markets and its currency by arguing that we are at the end of the commodities super cycle. Johnston makes an argument that the loonie could slip against the dollar to 55 cents over the next seven years.

"Canada's export base has been hollowed out worse than I thought," Johnston said, before telling Canadians that they need to start buying dollars as a hedge.

Naturally, the concern for many traders is that a falling loonie is going to rattle this nation's oil-centric export economy. Following this interview, the only vision one should imagine is that right now commodity bull Jim Rogers is probably overlooking Singapore and riding his exercise bike with a hungry and determined look in his eye.

Canada's oil sector faces challenges from a falling currency, but also because of high production costs in a global market with many producers.

Which is why it might be time to pay attention to the best thing to come out of Canada: maple syrup. 

It could be another sweet season for Canada’s maple syrup industry if a falling loonie supports exports. Of course, small businesses in the nation continue to face challenges on the global export markets, as outlined by this family-owned business that's trying to boost its global exposure.

The maple syrup industry… is fascinating. Here’s a breakdown on how it works, and the nuances of how French Canadian producers band together against the free market… and more important the fact that Quebec has a strategic maple syrup reserve that is a regular target of syrup bandits.

Back in 2012, thieves made off with $30 million dollars of Quebec's strategic maple syrup reserves.

Arrests were eventually made, an inside job was exposed, and pancakes across the world were again enjoyed. 

That’s it for now. Check back tomorrow for thoughts and other musings.


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