Wednesday, April 20, 2011

Is it true?

It's a busy day today leaving Team Macro Man little time to ask themselves some of the more pressing topical questions. these particularly come to mind...

1. Is it true that one of these is any whippier than the other?

(a) Devo.
(b) A UK Zoo.
(c) Lindi St Clair.
(d) An ice cream van.
(e) A day out with Mr Market over the past 2 days.

2. Is it true that Bill Gross has started buying bonds for the biggest bond fund in the world which was crowing about owning no bonds because:

(a) He has miraculously changed his mind and decided to fund the death spiral debt mountain he has so often blamed for the end of the known universe.
(b) Of some really clever bullshit relative value trade excuse "no I wasn't really short because I was actually hedged through a hedge I bought in a garden centre".
(c) Even the greatest bond manager in the world can only take so much red hot iron inserted posteriorly before he screams for his mother.

3. Is it true that the Chinese reserves of 3 trillion dollars would:

(a) Stretch 3 times around the planet.
(b) Take 48 years to withdraw from a ATM in $500 tranches.
(c) Weigh the same in $1 bills as the total number of potatoes processed last year in Belgium?

4. Is it true that the ratings agencies are:

(a) To be religiously followed no matter what your benchmark.
(b) Run by North Korea.
(c) Suffering a death wish.

5. Is it true that leaving your towels on a bathroom floor in a hotel:

(a) Saves you picking them up.
(b) Destroys the planet as it is a sign that you want them washed which, as the hotel points out to you on small cards, will lead to the end of the human race and it will be YOUR fault.
(c) Costs the hotel an extra $1.50 in washing which they'd rather save on the pretext of promoting peace throughout the solar system.

6. Is it true that running a marathon:

(a) Is environmentally friendly as it is natural and emits less pollutants that doing it in a Aston Martin DB9.
(b) Is jolly good as less animals die during it than in the Grand National.
(c) Emits more CO2 from the lungs of the runners than if each one had stayed on the sofa eating chips and watching TV for the duration.

7. Is it true that the latest stretch of hot weather in the UK will prove once and for all that:

(a) Global Warming is a reality.
(b) The media is obsessed with any event which deviates more than a nano-standard deviation from an average of their choice.
(c) Good-looking girls are solar powered.

8. Is it true that whenever June and the end of QE are mentioned:

(a) The equity market calls for more QE morphine.
(b) The bond market calls for more QE morphine.
(c) Fed don't care as there is no July in their calendar.

9. Is it true that the Asian Central banks:

(a) Hire out seats on their FX dealing desks at fairgrounds and hand out stuffed toys to anyone who can hose more than 15 western banks in 1 minute.
(b) Get through a lot of stuffed toys.
(c) Prefer doing it on the way home after a good night out.
(d) Use USDs as biofuel.

10. Is it true that the Vampire Squid:

(a) Really made that much.
(b) Are going to be allowed to keep it.
(c) Are really going to lay people off if revenues don't grow.
(d) Have obviously acquired all of the QE money.

11. Is it true that making the Soothsayer signals on Bloomberg "subscription only" will lead to:

(a) The Soothsayer becoming very rich.
(b) Cloned "similar" systems being developed and used for free.
(c) No one caring as "Hell, they didn't really work anyway and its a good excuse to stop looking at them".
(d) The development of a new and as yet undiscovered fashion in technical analysis.

12. Is it true that the next fashion in technical analysis will:

(a) Not have a sillier set of patterns than the cups, saucers and other table crockery some use.
(b) Be as self fulfilling as the past ones once enough people follow it.
(c) Be wheeled out, as a tea trolley is, when everything else is quiet.

13. Is it true that Basel III is a really good way to make sure that:

(a) A banking crisis never happens again.
(b) It becomes an incontrovertible proof that banks' structuring departments are still smarter than the regulators.
(c) Next time there is a systemic problem in the US, Eurobanks are going to drop their i-banking subs like a bad habit and leave their counterparties with the bill.
(d) there will be at least one buyer for all the Western Nations sovereign debt.

14. Is it true that Gordon Brown:

(a) Sold the UK's Gold at $255.
(b) Oversaw the run up to the biggest financial crash in the UK.
(c) Blew the UK debt to 58% of GDP.
(d) Is seriously being considered for the post of chairman of the IMF? (you can express your own opinion on that HERE).
(e) Has been sponsored by Al Qaeda to stand for the post.

15. Is it true that ex-Australian Treasurer Peter Costello:

(a) Sold gold at about $330.
(b) Turned down the job of heading the World Gold Council.
(c) Is Gordon Brown's brother.

16. Is it true that the USD is:

(a) The monetary unit of the USA.
(b) Toast.
(c) Worth less than a Greek promise?

17. Is it true that if you are a large hedge fund you can:

(a) Push the market around at a whim in the style of an asian central bank.
(b) Pick your global domicile to fit your personal tax requirements.
(c) Expect to be a pretty small one if the markets don’t get any easier.

18. Is it true that the date 19th April 2011 (yesterday) was:

(a) 13/4/7DB in hexadecimal.
(b) The day that the Machines in Terminator became "aware" as Skynet went active, in preparation for its attack against humanity tomorrow.
(c) Together with (b), why the algos trashed USDs and sent Tech Equities higher this morning.

19. Is it true that when more and more Chinese property developers come to market that:

(a) Liquidity is getting really tight onshore.
(b) This demonstrates the idiot demand for anything in Chinese Yuan.
(c) Once again when things get really bad the onshore guys will get bailed out and a bunch of high yield managers will lose 40%+ and give you a WHOCUDAKNOWN?
(d) Anyone who think the PBOC has any real control over liquidity needs their head checked.

20. Is it true that Team Macro Man:

(a) Prefer McDonald's Egg and Sausage McMuffins over the Egg and Bacon McMuffins as early morning alcohol sponges (but not from here),
(b) Really wish they hadn't come in to work today.
(c) Really wish they never had the need to work.
(d) Will be taking the rest of Easter off and look forward to being back next week.

Team Macro Man wish you a Happy Easter.


Anonymous said...

Happy Easter ,TMM.

FX said...

Happy Easter,TMM.


Anonymous said...

That's the best post ever Macro Man.. especially the technical analysis questions! Dow Theory rules again..

Skippy said...

Brilliant post.

I find that having both bacon and sausage egg McMuffins works best for a hangover.

I hope the easter bunny is generous.

Anonymous said...

Happy Easter, TMM.

LB, would aprreciate your take on bonds at the "other" blog. I don't know if you still read it.

LB said...

Not too many Cadbury's Creme eggs, TMM, although that might be a decent hangover cure.

Very funny post this morning, the thought of Bill Gross being Edward the Seconded relieved some of my pain in the portfolio region.

The gyrations of the Euro continue to confuse, amaze and confound. What can one say, other than Eurobllx?

LB said...

Anon, I will weigh in over there after the close, but LB professes to be more than usually confused re: fixed income. Suggest checking on the degree of short interest in Treasuries (see MM last week) for an indication that the squeeze has ended, or inquire of a certain gentleman in Newport Beach concerning the disposition of a red hot poker.

"To be honest, guv'nor, I haven't got a clue"

Anonymous said...

Is it true?


On macca's, now I understand why they are the butt of a lot of jokes. One way to lose weight!

Intrinsic said...


getyourselfconnected said...

Epic post.

Minty said...

Attractive women ARE solar powered. That is the greatest description of the phenomena I have struggled to fully understand for much of my life.

Leftback said...

Department of giving credit where credit is due:

TMM was correct on the following:

a) SPX 1295 support level holding (all)
b) Earnings season being OK, esp. tech (cpmppi)
c) USDJPY falling back towards 80 (Polemic)
d) S&P downgrade of USTs having no effect
e) Going home early for Easter was a good idea.

So, well done, TMM, well done indeed !

FiatMoney said...

Great post, very creative too! (maybe you guys are in the wrong line of business!? :) ) Loughed out lout on 12 and 6c while on the bus (in Singapore)

Anonymous said...

Very funny post! I can particularly relate to the bacon/ sausage egg mcmuffin debate and the solar powered observation is 100% correct!

Nemo Incognito said...

I am in Australia and I can report that the best looking girls ARE solar powered and there does appear to have been some serious uptake due to solar panel rebates or something..... then again, maybe this is why they call it god's country.

Leftback said...

I see that the Easter Bunny is holding a Press Conference this week to discuss weighty matters, such as whether there is "inflation" in the price of Easter eggs, and whether such inflation as there might or might in fact not be is "temporary" or not, and whether the Easter Bunny's policies of Quantitative Easing have resulted in the nefarious practice of retailer substitution of big dark chocolate Cadbury's Easter eggs with rather inferior offerings marked "Hershey Highway, PA, U.S.A.".

Now, wasn't there some sort of debt crisis going on before the Easter Bunny absorbed our attention?

Leftback said...

Greek 2y at 24% today, 10y at 15%, Portugal heading for 10%, Ireland is already there.

Equities and EURUSD up on this news, obviously..... apparently I am the only person in the world today who is nervous about credit markets.

FX said...

LB,oh that is so yesterday.

Leftback said...

LB is wondering whether this FOMC day might be one of those days "that will live in infamy", if you are a precious metals bug, that is.

Feels like there might be a Pearl Harbor in the offing for certain segments of the punting community. Sold some Treasuries yesterday. I like being in cash when central bankers are getting ready to play dice*.

* "God doesn't play dice" (Einstein)

Leftback said...

There is a huge void when there is no Macro Man post..! I am sure they are busy with one.... permit me to speculate in the interim so you can have fun with my inaccuracy afterwards...

I am not bearish Treasuries in general. However there is a potential here for a reversal upwards in yields. The market is pricing in all kinds of QEasing and also a weak GDP. If we get a 2 handle tomorrow then surely we are going to see a sharp sell off in bonds. Any hint today that they are going to do a little bit of QE2.5 (MBS rollovers) but they are not going to QE3, then we should get back to the kind of yields that were in play before the Goldman downgrade of GDP.

If there is a Cold Turkey kind of statement on bond buying then we are really going to see a substantial move in yields. I assume that a genuine 25 bps rate hike is completely off the table but a small symbolic thing, like a 10 bps BoJ kind of deal, or some other form of tinkering using the Fed's "tool kit" might not be beyond the bounds of possibility.

Anonymous said...

Thank god LB is around

Leftback said...

Hold the rotten tomatoes until the end of the day...

k1 said...

Fed Chairman Bernanke recently began his press conference. He has outlined a revisions to the GDP forecast, which now suggests that the economy will grow between 3.1% and 3.3% in 2011 after it had previously been forecasted to grow between 3.4% and 3.9%. For 2012, GDP is now expected to grow between 3.5% and 4.2% after it had been forecasted to grow between 3.5% and 4.4%. For 2013, GDP is expected to grow between 3.5% and 4.3% after it had been forecasted to grow between 3.5% and 4.6%. Long-run growth is now expected to range from 2.5% to 2.8%, versus the range of 2.4% to 3.0% that had been issued previously.

So to recap:
3.1% - 3.3% vs 3.4% - 3.9%
3.5% - 4.2% vs 3.5% - 4.4%
3.5% - 4.3% vs 3.5% - 4.6%
2.5% - 2.8% vs 2.4% - 3.0%

Near term estimates lower, and very long term expectations more volatile, but all the intermediate term stuff is in the bag. That reminds me of how we used to play schedule-delivery poker with a gullible project manager, feeding very precise estimates with a slowly decreasing tolerance, hoping against hope that you don't run out of room to tighten before *somebody*else* screws the pooch and has to admit they can't deliver.

Leftback said...

Making GDP forecasts for 2012 from this far out is patently absurd, and I am not sure why a central bank would see it as their job to publicize any such forecast they might make.

Slower growth is really priced into Treasuries here now, so a 2 handle on 1Q GDP tomorrow might count as an upside surprise, not to mention the jobs reports the following week.

You can probably let loose with the rotten tomatoes now.... I was obviously wrong about today being the end of DGDF, GGUF etc.

CV said...

All bow to the Beard with Gold, Silver and the SPY (and the AUDUSD) hitting new highs and the USD new lows.

I would state the obvious and say that it will all end soon, but I can't be bothered :)


Manc Trader said...

@Nemo I thought Yorkshire was known as god's country.

Anyhow I suspect TMM are actually all camped out for the royal wedding.