20 Questions

Tuesday, March 03, 2009

Time for another edition of Macro Man's favourite game, 20 Questions:

1) Why does AIG still exist in anything close to its current incarnation? Is it really, as the conspiracy theorists postulate, to remain on the other side of a huge number of Goldman trades?

2) Bank of England this week: 0, 25, 50, 75, 100, QE?

3) ECB this week: do they do anything but cut 50?

4) How much do you think Trichet likes being challenged by an ex-Fed guy from Cyprus?

5) China: seriously, have you got any ideas of how to wean yourself from your FX-reserve buying addiction?

6) America: seriously, have you got any ideas of how to wean yourself from your addiction of selling Treasuries to foreign central banks?

7) Will 10 year Treasuries break yield resistance at 3.05% this month? If so, how high do yields go?

8) Is this the year that Ireland's golden generation finally wins the Six Nations and the Grand Slam?

9) Are there any material economic ways in which New Zealand is different from Eastern Europe?

10) How much will the EU eventually spend on propping up its weak sisters (Eastern Europe, Ireland, etc.)?

11) When did Bill Gross sell his intellectual soul to the devil and focus his investment model on media manipulation and inside information from the government?

12) Which USD/JPY level trades first: 85 or 110? (originally written as 100 by mistake)

13) Will the US household savings rate touch 10% this year (having printed 5% yesterday)?

14) Is oil forming a base?

15) Are there going to be mass demonstrations and violence in the UK this summer?

16) Who was the worst chief exec: Fred the Shred (RBS), Stan the Man (Merrill), Dancin' Chuck (Citi), "Sugar" Cayne (Bear), or the Big Dick (Lehman)?

17) When will the S&P 500 trade at 1000 again?

18) Why was Jerome Kerviel the last piece of bad news to come from French banks?

19) Macro Man is going to end up getting the full knee reconstruction, isn't he?

20) Is it wrong to feel happy that the recession has finally freed up quality tradesmen? The kitchen project chez Macro Man has been in the works for nine months....but the guys were able to start earlier than expected and have proven to be extremely efficient. Hurrah!

Posted by Macro Man at 8:51 AM  

33 comments:

2) Bank of England this week: 25 + QE

3) ECB this week: do they do anything but cut 50?

-25?

5) China: seriously, have you got any ideas of how to wean yourself from your FX-reserve buying addiction?
No, they're obsessed

6) America: seriously, have you got any ideas of how to wean yourself from your addiction of selling Treasuries to foreign central banks?

No, they're desperate


7) Will 10 year Treasuries break yield resistance at 3.05% this month? If so, how high do yields go?
No - going lower????

8) Is this the year that Ireland's golden generation finally wins the Six Nations and the Grand Slam?

well it would cheer them up

9) Are there any material economic ways in which New Zealand is different from Eastern Europe?

Possibly in a worse state

12) Which USD/JPY level trades first: 85 or 100?
100 - soon

13) Will the US household savings rate touch 10% this year (having printed 5% yesterday)? probably - another reason for dollar strength.

14) Is oil forming a base? yup

15) Are there going to be mass demonstrations and violence in the UK this summer? depends how fast interest rate cuts/stimulus works through

17) When will the S&P 500 trade at 1000 again?
end 2009/mid 2010?

for what it's worth (not much at all) I'm becoming mildly bullish on equities...

FlashRabbit said...
10:49 AM  

2: 0 + QE methinks
20: I hope you didn't go with SML LN...

- CS

Anonymous said...
10:50 AM  

The yen question was a typo...actually was meant to be 110 or 85, which is, I think, more interesting.

CS, no, we have not used Smallbone. The name itself renders them difficult to take seriously...

Macro Man said...
10:56 AM  

Geez MM, throw us a bone down under. RBA pauses at 3.25%, Q4 GDP is likely to print positive tomorrow (find me another country with a positive Q4 number) and you give us the wide berth. Honestly...

Seriously though, re number 9 - the Kiwi PM is a former head of FX at Merrils so surely he must have some plan to stave of spec attacks. Either that or he is short NZD to his eyeballs.

Harry

Anonymous said...
11:17 AM  

Harry, maybe I'm just bitter because the unched RBA helped submarine the short NZD versus a basket position that I instituted yesterday...and now wish I hadn't!

Macro Man said...
11:31 AM  

I realise you're more a longer term punter, but the RBA tends to leak to a journo called Terry McCrann, who writes either at his blog at the herald-sun or occasionally does articles for The Australian. He came out on the weekend saying the RBA would be on hold. Not sure whether you knew this. Here's his article from Saturday's paper:
http://www.theaustralian.news.com.au/business/story/0,28124,25116261-14743,00.html

shame about your short kiwi possie, i'd be tempted to dip another toe in heading into the RBNZ decision.

Harry

Anonymous said...
11:45 AM  

Oh yes, I know all about McCrann, Mitchell, and the whole Aussie financial journo mafia. It's become quite tedious, actually, having the RBA tell us what they're going to do through the press...I preferred the good old days of surprises.

Still have the short kiwi, though i doubt I will wish to add ahead of the RBNZ...would much rather see Big Al deliver the rate cuts goods and sell additional weakness...

Macro Man said...
11:56 AM  

2) 25QE

9) If there's an armageddon, I'd rather be in NZ than C/E E.

18) I take it you see BNP buying bits of Fortis as positive? (or at least not negative)

20) No, it's the silver lining.

vlade said...
12:12 PM  

Really, MM, we want answers, not questions! We have enough questions of our own.

PureGuesswork said...
12:21 PM  

Some have said Bill's middle name is Palpatine

Anonymous said...
12:34 PM  

19) If you ever want to do serious skiing again you had better get your ACL repaired.

Anonymous said...
12:36 PM  

Here's my take on a few of these:

2) 0.25

3) 50 cut

4 & 5) Not gonna happen, and I'm glad for now

7) I actually think the Fed will step in and start buying 10s in attempt to "target" all those rates revolving around the 10yr-rate. Everyone says Ts are a screaming sell... and they seem to have stabilized despite the recent supply. I'm taking the other side; how about "Which level 10 yr Ts trade first: 2.5% or 3.5%" ? What you say MM?

8) Now or never. Last game should be fantastic. I'll be content if the french beat the english.

11) Why d'ya think he shaved the 'stache?

12) Betting on 100 (or 110 as you corrected)

13) No, looking for 8% though, with no economic grounding on that whatsoever

14) Sure looks like it... one of the better recovery trades?

17) Could be 2 months, could be 2 years... or both

18) Who's your favo(u)rite short?

19) Will only wish you a fast and long-lasting recovery.

Best,

SD

SD said...
12:54 PM  

17) When will the S&P 500 trade at 1000 again? end 2009/mid 2010?for what it's worth (not much at all) I'm becoming mildly bullish on equities...

i look for the bottom in mid 2010... so S&P500 @ 1,000 is going to happen sometime in 2011, my friend.

Celal Birader said...
1:53 PM  

I think oil is now less of a concern for many guys than last year when everyone was jumping into the commodity craze. Front line Brent will probably have a wider band going forward but still centres around $45 but i still think deferred prices are a buy. COZ9 to go to $55
http://sfot-otb.blogspot.com/2009/02/possible-bottom-of-crude-oil.html

SFOT said...
2:14 PM  

sell gold, diamonds

Anonymous said...
3:21 PM  

above should say wear diamonds :) in relation to snp ... 600-650 is fair value ... could go down to 500 ... as for going up ... it ain't. politicians and central bankers are in process of making sure that is the case.

Anonymous said...
3:24 PM  

On question 17, you accidentally included the word 'when'.

Anonymous said...
3:38 PM  

1 Political intransigence & bureaucratic stickiness
2 Should do 0 and QE, prob 25
3 ECB off script? Nope
5 Beginnings of internal focus on policy stimuli show an idea but the addiction is still too strong.
6 Importance of private players a la Setser to pick up the slack, but no ideas really other than poss buying 10s, dont think they will tho...
7 So yes break 3.05
10 EU will look to Supras
11 Haha, Palpatine!
12 $JPY 110
13 ~50% prob of 10% savings, politically dependent, prob a good thing to shift econ away from C and more on I, def more G
14 Oil base yes
15 Definitely, but prob played down in the press
16 Cainin' it Cayne
17 2010 SP500 at 1000 (but will be a rollercoaster)
19 Best of luck MM
20 Silver lining indeed
Cheers! JL

Anonymous said...
3:51 PM  

Off topic but any colour on the FTSE underperformance?

Anonymous said...
4:20 PM  

I would take New Zealand any and every day over Eastern Europe. As the Obamunist ramps up his wealth confiscation schemes while also supporting AIG and the like we will finally see a John Galtian shift and more and more productive Americans with assets will peace out and move elsewhere.

While not an amazing tax haven New Zealand sounds like a good English speaking country.

Anonymous said...
4:45 PM  

Since latest inflation estimates indicate an ever so minor uptick in Eurozone inflation to 1.2%... a 0.25 cut.

Anonymous said...
4:50 PM  

so what about the rumors making the rounds- 100 bps cut from ECb?
Trichet did finally acknowlege things are aweful, financial plumbing is leaking to say the least

Anonymous said...
5:23 PM  

The Calyon scandal was only $800 million in losses and didn't garner enough attention in the summer of 2007

Anonymous said...
5:49 PM  

Question #1) You aren't paranoid if they really are out to get you. Earlier bailout payments to AIG already revealed Goldman is their largest counterparty. AIG is just a funnel by which the kleptocrats in the Treasury steal money from tax payers and send it to their Goldman cronies

The kleptocrats in Russia really need to take lessons from the US Treasury

Anonymous said...
6:00 PM  

Comments about US Treasury rates going to zero contradict themselves and make absolutely no sense.

You can't argue that the US economy (aka the US government's tax base) is going to @#$$ and then also argue that long term bonds whose payment depends on that revenue stream are a good investment.

Remember back in the 1970s when Citibank claimed that sovereign debt can never default?

Brady Bonds were soon invented to solve a problem that could never happen.

Either the US economy is not coming to an end (in which case UST are in a bubble) -- or the US economy is dead, in which case you would be a fool to pump in more money.

Let me guess: you plan to be the smart guy who gets out right at the top?

Good luck with that

Banana_Republics_Rule said...
6:05 PM  

in the great tradition of MM youtube postings...

http://www.youtube.com/watch?v=d2GtGy0zXC0

dead bull walking said...
6:58 PM  

1) It's not the only reason, but it helps.

6) They're not particular about selling to foreign central banks; it's just that no one else is buying.

11) Around the same time it became profitable. ("What is this thing, soul?")

16) Big Dick. The others were incompetent; he was just intransigent.

17) When it's denominated in Yen? (Sorry, old joke. Couldn't resist.)

18) Because, really, no one cares about French banks unless they're losing money.

19) It could be worse.

20) No. This is a good thing. You're keeping people employed and transfers to Ecuador more stable than they would be otherwise.

Ken Houghton said...
7:33 PM  

btw what do you guys think about HIG? was downgraded today by S&P to BBB, equity 10 bn, liabilities around 300, looks like the next candidate for a bailout

Anonymous said...
9:56 PM  

HIG outlook negative

Anonymous said...
9:57 PM  

I will take south central Europe any day , in case Shtf I'm with familly and friends not bum fu*ked New Zealand

Anonymous said...
12:23 AM  

I would have thought the memory of the problems following the 1987 crash, when NZ was caught out following schemes recently popularised recently by Iceland, would have stopped things getting too far out of hand this time.

But apparently borrowing money from overseas to "invest" in a bubble never goes out of fashion.

One other time NZ's overseas debt got completely out of hand, it was Muldoon "investing" in farm subsidies and industrial chemical plants. Socialism vs Capitalism, it's all the same in the end.

Richard said...
7:41 AM  

1) Prevention of systemic failure will always benefit some companies more than others. If you really thing Goldman is in a great state, rolling in cash and ready to return stacks of money to their shareholders - buy the equity. Then again, I fully expect that Merrill/Goldman/MS will rise again. In the end the smartest guys in the industry still work there and these days they're not using all that brainpower on crazy structured credit deals.

2) All bets are off.

3) 50 it will be.

4) I think you give Trichet too little credit.

5) No.

6) Selling your treasuries to your own scared citizens instead.

9) Less mafia.

10) A lot.

12) 110

13) Yes. Never underestimate the power of scary Americans.

14) Maybe. But after so many OPEC cuts, spare capacity is so high that any recovery will just trigger cash-strapped producers to flood the market again.

15) No. Just orderly queues

16) Rijkman Groenink (ABN-Amro) - because he destroyed his bank in a ten year bull market. While anyone can ruin a company in a market like this.

17) 2015

20) No

Anonymous said...
9:30 AM  
Anonymous said...
3:45 PM  

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