Macro Man is out marketing this morning in that delightful process known as the investor round table. As such, today's entry is limited to....err...the above sentence. Feel free to discuss potential new highs in the SPX, EUR/USD, gold, or anything else in the comments section.
Normal service resumes tomorrow.
Normal service resumes tomorrow.
32 comments
Click here for comments1.4700 barrier in usdtry broken... do we finally see less underperformance?
ReplyI think a lot of you guys are too close to the screens. The Buck isn't collapsing, it's on a downtrend and there's no collapse.
ReplyI can't understand how anyone would want to buy the Euro or the Yen in place of the dollar. Canada, Aussie perhaps, but not those sack to dog poop.
My positions?
I was long Aussie / Euro until here and now I'm square.
Japan sucks. Without robots to do the, er, work thing its doomed. And sadly you can't export bukkake (well, not very far anyway). Aging population without robots and way too much debt with industry being hollowed out to China: short.
ReplyThat skinny CPI in China just got a temporary bullish kick in its butt.
ReplySlightly more serious but picking up on yesterday's run of comments try Paul McCulley's V vs U-recovery and why a U is consistent with a broad risk asset rise. Ties it all together as neatly as anything I've read and gives everybody scratching their heads some tradable patterns IMHO:
Replyhttp://www.pimco.com/LeftNav/Featured+Market+Commentary/FF/2009/McCulley+10-09+The+Uncomfortable+Dance+Between+V%E2%80%99ers+and+U%E2%80%99ers.htm
Nemo, not just Japan, you might as well include all the developed countries. Not quite sure if it sucks, either, there is not enough room for that many consumers on the planet anyway. Don't expect much growth, short them all. Several economic paradigms are busy shifting.
ReplyI'm more of a single name / fx guy. I find a theme, pick the biggest turd in aforementioned theme and short it. I moved from GBP to JPY because the Tories are awfully close to the finish line. Cameron looks frighteningly (John Key-esque) sensible and capable. I'd like to see him win and am uncomfortable shorting the pound with him about to get in, no matter what silly BS Gordo has to say.
ReplyNemo, you live in Australia right? Only that much distance could make David Cameron look sensible. A lightweight if there ever was one, although he's made to look good by the current lot and uber-moron Osborne.
ReplyAnyway all he can sensibly do is a combination of raise taxes aggresively, cut spending aggresively or borrow a lot more. All bad for GBP.
-melki
@ dblwyo
ReplyI will second you on the McCulley piece ... he makes a lot of sense in that one. But I am not sure about tradable patterns though :) ... doesn't he basically say that "yes, risky assets will fall in line with the Fed moving the discourse on rates" ... but when?!
@Nemo
Exactly right on Japan Nemo, I concur 100%. Shorting the JPY? Hmm, right I am with you. Not against the USD though. But against the Euro sure ... if risky assets go into rollercoaster mode, I think this one will move significantly lower from its 130-140ish level. The Aussie and Kiwi cross too I guess ... I mean it would be a so old school "risky asset/carry trade correlation" trade but it should work ... no, or what?
@George
"short them all"
But against what? The Rupee, RMB, T.lira ...?
Re Japan.
ReplyThey're rooted. The Yen belongs at 150-200. The deficit is 200% of GDP and they will end up defaulting in the next decade.
Everything is working against them including the demographics.
I'm praying the yen get down to 85ish so I can stack up against it for the longer term.
Every single arrow is pointing down for them.
US small cap still looks like a nice short.
ReplyDid anyone have a close look at the detail of the NFIB survey yesterday? The question on credit availability was near the post-Sep 08 low. Most of the other sub-indices were still barely off the lows.
"short them all": short to mid term against precious metals, commodities, long term wait and see.
ReplyOn Nemo's short list:
ReplyRussell: been dancing around this one, I know that credit availability still sucks but the carry monster is a tough fight
JPY against USD. I'm sorry, DGDF has been way too fashionable, this is the unwind plus the value trade.
Cameron: yeah you're probably right. Still, better than Gordo.
Precious metals: tough, was long gold but the momentum is out for now. Tactical trading like many things these days.
Ugh, I am all themed out. Aside from the long term equity positions and the odd bit of high yield or cap structure exotica there isn't a whole lot of obvious stuff out there.
Let's play "spike the EUR:USD" and see how much chaos we can cause with the US bond markets closed....
ReplyJust bought another 5000 diana shipping dsx as I'm playing the Global GDP lift off for next year.
ReplyGood firm. no debt, 280 million in cash and looking to buy some bi vessels.
think it could be a $ 25 stock in time. Now own 30,000.
Anon 1.21
ReplyThe day anyonemoves taxed and public spending aggressively is the day the GBP starts going up ,not down....don't confuse the effect on UK consumtion with the effect it would have on uk currency and bond markets !
Now the question is will anyone really do it aggressively ,I don't believe they will ,they'll just f..k around as usual trying to make themselves look pretty for the voters without inflicting any real pain that might get them booted out of office.
OM's short-list:
Reply- Slashing his Gold position at some point
- Thinking and researching Australia (as his China slowing, USD strengthening, their nominal GDP being negative play...values not volumes) but not know enough about interest rate options to be able to execute it efficiently, and leery of buying puts on the ETF atm.
sometimes no risk is good risk.
ReplyMany of the short-term technical indicators I follow have turned bearish in the past few days: market breadth and internals, although...
Replyhttp://raphaelkahan.blogspot.com/2009/11/equities-short-term-caution.html
Anon at 3.02
Reply£ could easily fall if the government cuts spending. Remember $ when Reagan was spending, it went through the roof, ditto Germany's reunification boom. There could well be some kind of J curve in effect, stop selling so many bonds means that foreigners don't buy so much £. If taxes rise all the rich people sell their London houses. That said £ does seem pretty cheap already.
LB thinks we just saw a spot of intervention in the $. With bond markets closed, this was always going to be a day of mischief.
Replyjc - if you think usdjpy is going to 150 why are you waiting for another 3 figures?
ReplyReally MM? Like investors with money and an interest in HF and stuff?
Reply1st laugh in a while, thanks Nemo: "And sadly you can't export bukkake (well, not very far anyway)." (BTW anything to say on Spanish banks?)
Think demographics are too LT to be of any concern in the midst of this mess, but certainly feed into the agri softs trade (as well as decoupling etc) so long wheat & corn.
Short copper cos I dont think China can build houses for ever and the pig farmers will be getting nervous soon.
In FX short €$ 1.5020 area, looking to long $ZAR if it doesn't violate 7.2. As mentioned yest I think ZARTRY is a good x to go long of. Am short the old whorey chestnut flamingo of £JPY, but would look to long $JPY in the mid 80s, and €JPY is building up steam for a breakout methinks, just can't make my mind up which way.
Miliband>Clarke>Osbourne>Cameron>Brown
JL from Landan
I am getting nervous.
ReplyOne of these days the market has got to show its true colors. Probably not today.
ReplyLong agri commodities as well.
Naughty Nemo lol
ReplyLet's hope Mrs Macro doesn't stop by today....
ReplyI wouldn't worry about Mrs Macro. My wife had no idea what bukkake is - and she's Japanese! Respectable lady, my wife. Googled it instead.
ReplyJust a note ... Expecting a good first-time unemployment claims number tomorrow, below 500k for the first time this year, largely due to seasonal adjustment dynamics.
ReplyI predict US equities will peak Friday, US Senate will have the cloture vote on health care this weekend, equities go down next week.
CV - fair point. Two possible answers.
Reply1) Tradeable means RiskOn but short-term - follow the technicals. Complete antithesis to MM's canon of course.
2) Fed policy - I've always them entirely rational once you decode. The decoder ring is buried in the modifed Taylor Rule and has proven very accurate. Some of Krugman's columns walk thru and are worth reading for that alone.
NB: this last G-20 meeting means ease on...maybe even more stimulus.
In terms of fundamentals and values think the market is weigh over-valued right now but...high risk, low reward.
"Indeed, bukkake is used in Japan to describe a type of dish where the broth is poured on top of noodles, as in bukkake-udon and bukkake-soba."
ReplyAnd thanks for the colour Pig farmer!
JL
jc - if you think usdjpy is going to 150 why are you waiting for another 3 figures?
ReplyBecause i don't trade decade.