A Hobbesian correction?

So now that the dust has settled (if only for the time being), what are we to make of it all?  Is there another sting in the tail for equities, or was this merely a Hobbesian correction (e.g., nasty, brutish, and short)?

We may find out soon enough.  A few short days after the market was in abject panic, and we're already at the tell-tale 1900-1905 region on Spooz.  As a refresher, this is not only the region of the 200 day moving average (a break of which saw the downtrade accelerate), but also a level that has prompted a reaction on previous visits as well.


Gun to the head, Macro Man would take the side of the market resolving higher over the next month or so.   While it's true that VIX has already fallen very sharply since it touched 30 (an "old school" turning point level, as Macro Man opined in one of his rare Twitter forays last week), over the past couple of years gap reversals from a VIX high have tended to hold and extend.  And this was quite a gap reversal.....


One might also credibly project that buybacks will accelerate after this earnings season and into the end of the year.   Not only is Q4 a seasonally strong time for buyback activity, but many companies might find their stock prices "on sale" given the recent volatility, an added incentive to engage in that sort of activity.

Ultimately, Macro Man's equity market "conscience" resides with a model that he has run with some success since before the crisis.  This simple model, which he has occasionally referenced over the past 8 years, is a simple projection of 12 month forward SPX returns.   Although the forecast is not to be taken as gospel, he has found that both the shape of the line and the magnitude of the forecast relative to volatility to be useful guides for future performance.

In this case, the 12 month projection is still well above the historical norm, and has even improved slightly after a small hiccup over the summer.  As long as the model is this bullish, Macro Man struggles to adopt a secularly bearish stance.


That having been said, there are further insights to be gleaned than simply looking at the 12m projection.   As noted periodically in this space over the last several months, volatility should be higher in the future than it was in the pre-October recent past, and the last few weeks' juddering is actually a normalization of the volatility profile.  That ex ante reduces the projected Sharpe ratio of holding equities moving forwards.

Moreover, it seems quite clear that abundant liquidity is a (the?) primary driver of expected equity returns.  No, not market liquidity, which the past couple of weeks have shown is not abundant at all (again, not a great shock.)   Rather, it's financial liquidity, courtesy of ZIRP-world, QE, and the reluctance of any central bank to rock the boat.

Macro Man can disaggregate the forecast above into what he terms 'liquidity' and 'growth' vectors.  Plotting a Z-score of these factors relative to the historical norms, we see that the vast, vast majority of the large expected returns are a function of financial liquidity factors. 



It's interesting to note both the astounding degree to which liquidity factors have driven expected equity performance, and also that they seems to have tailed off recently.  Should this trend continue, then it would be up to growth factors to pick up the slack or else see the forecast return decline- perhaps sharply.  When that happens, of course, Macro Man reserves the right to change his mind and raid his closet for his bear suit.

Until then, he plans on continuing to tread warily, adding risk selectively when market have a tantrum, and cutting back on risk when the SPX looks like the festival of San Fermin.

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Gu Dapeng
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October 21, 2014 at 9:34 AM × This comment has been removed by the author.
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Anonymous
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October 21, 2014 at 9:35 AM ×

Hi MM, I really like your growth and liquidity factors decomposition. I use similar things in my model.

One thing puzzling is if QE ends soon shouldn't we expect liquidity to tighten, not loosen? Then the EU sick man is going to drag down the growth prospect further. Couldn't see too much upside from here, unless something dramatic coming from ECB. Or am I missing something? Thanks

-cityhunter

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CV
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October 21, 2014 at 11:00 AM ×

Great post MM. It is squeezy, squeezy for Eurozone shorts today. This is probably because they have just realised that, you know, the ECB is now BUYING sh't there. Why bother fighting Mr. Draghi when there are other more obvious targets out there.

Biggest surprise this week so far, QE has started in the Eurozone(!?) ... I mean, please ... how very "unexpected" ;).

Claus

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Nico G
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October 21, 2014 at 11:12 AM ×

if only it was that simple

am 4% below my reentry target but i don't trust Europe will get there so shorting some here

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Nico G
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October 21, 2014 at 12:17 PM ×

never mind the 200 day of Mickey traders this 1912-1918 cluster was my target of choice for a sboonce

beware le gap and crap good luck

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Anonymous
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October 21, 2014 at 12:29 PM ×

Not markets related, but I think you guys would be amused by this:

http://www.euromoney.com/Article/3392211/Macaskill-on-markets-The-secret-diary-of-Bill-Gross.html

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Anonymous
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October 21, 2014 at 1:16 PM ×

Two-part BBC documentary about trading:

Millions by the Minute...

http://tinyurl.com/ku7x2o7

http://tinyurl.com/ky3nnc8

Looked for MM but he wasn't there :)

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Anonymous
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October 21, 2014 at 1:36 PM ×

The $SPY briefly touched its 200-day moving average in after hours. Perfect time for a small 1.5%-2% correction.

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Anonymous
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October 21, 2014 at 3:16 PM ×

http://lindaraschke.net/wp-content/uploads/chart1.png

H^T

FF@FatF1nger

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Nico G
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October 21, 2014 at 4:58 PM ×

http://www.bloomberg.com/news/2014-10-20/forex-rigging-fines-could-hit-41-billion-globally-citi.html

Robin Hood !

whatever it takes

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Anonymous
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October 21, 2014 at 5:06 PM ×

Bloomberg: Contingent convertible bonds...

http://imgur.com/hwxvyyB

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Anonymous
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October 21, 2014 at 5:09 PM ×

Ok, sure we knew...

Fed's inspector general says NYFed spotted JPMorgan's London Whale risk but didn't pursue

http://oig.federalreserve.gov/reports/board-supervisory-processes-jpmorgan-chase-oct2014.htm

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Anonymous
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October 21, 2014 at 5:11 PM ×

Reuters: ECB looking at corporate bond buys in 2ndary market, could move as soon as December

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Leftback
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October 21, 2014 at 5:48 PM ×

It's all gone a bit pennies and steamrollers out there again. From Bullard to Draghi we have seen an orgy of co-ordinated CB jawboning that has left the 200 day in the dust.

Now we are all looking at 1965 as the next line in the sand. What a difference a week makes! There is a gap open now at 1905, so expect to revisit that at some point.

Watching, not trading, the Spoos seems optimal here. FX might be the next interesting trade to present itself - once I can figure this all out. After a week or two of being mainly in synch with Mr Market, LB has lost the plot a bit for a few days. Still, clueless but making money is OK.

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Nico G
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October 21, 2014 at 5:53 PM ×

if you look to re-enter short, you will never get the perfect kiss back entry

it could very well be between 200ma and 1960 - ah well, great precision

if you wanted to go long, it was last week. Ah !

bottom line if you still wait for a third leg down you'd better be early than never

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Leftback
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October 21, 2014 at 6:13 PM ×

Inclined to agree with MM here, Nico, and this market has ripped a lot of faces off. It has usually paid off to wait until the wings have been totally torn off the VIX butterfly before re-engaging on the Dark Side. Like CV says, Euro squeeze could run on quite a while here now the buying has begun, and the vol sellers are out in force again.

Anyway, the point I am making is this, that sometimes it's fine to be clueless and uninvolved for a few days as it can cut down on mistakes. If you're right about 55-60% of the time in this business, you are generally doing fairly well.

Speaking of being wrong, projectile vomit and my position in PT are closely related this week. The Bank of the Holy Ghost keeps on giving...

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abee crombie
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October 21, 2014 at 6:48 PM ×

JBTFD back in fashion.

A close above 1930 would leave us in no mans land and probably looking to the 50day at 1960 as at least a partial stop sign but frankly if it hold the week, who knows.

Funny how all the things one would have wanted to see for an equity pull back (interest rates rising, oil rebounding, europe leading) none have happened and yet here we are.

EDZ5 old friend, do we take you into the fed meeting.

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Anonymous
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October 21, 2014 at 7:51 PM ×

Told you guys this wasn't different. ECB hasn't even done full fledged QE yet. Pain trade is higher. Much higher.

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Nico G
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October 21, 2014 at 8:17 PM ×

oh, you are the famous Anonymous yes we remember

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Leftback
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October 21, 2014 at 8:36 PM ×

Nasty and brutish indeed.

A total ripsnorter today, MM ! I'd like to order one of these for the RSX and the EWZ, please.

Here we have a real time snapshot of the "other" Hobbes, seen here trading the rally in Spoos, 2014. Watch out for that log, chaps.

Hobbes

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Nico G
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October 21, 2014 at 10:28 PM ×

the CME Group has an incentive program under which foreign central banks could buy stock market derivatives like the S&P contracts at a discount.

lol

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Anonymous
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October 21, 2014 at 10:28 PM ×

Watching the trend line...

http://imgur.com/Kr7lt4H

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Leftback
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October 21, 2014 at 10:43 PM ×

Not watching Spoos except for amusement, the focus of my technical analysis is on the IWM or RUT, which seems like an easier read and is more of a bearish chart. A wee bit more of this retracement to come, for my money.

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Jim R
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October 21, 2014 at 11:38 PM ×

Anonymous - your trend line is drawn incorrectly. The spoos have breached it. All time highs will be taken out in the coming santa rally.
Listen to me folks: Wake up! Central Banks are DIRECTLY BUYING equities. Thus stock markets will go up for ever. Invest accordingly.

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Anonymous
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October 22, 2014 at 12:59 AM ×

Today's up volume is about 28% of last Wednesday's down volume

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Nico G
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October 22, 2014 at 12:59 AM ×

thank you Jim investment has never sound easier

and you'd wonder why there are still poor idiots out there when they just had to buy equities

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Nico G
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October 22, 2014 at 1:29 AM ×

may i remind - in layman terms - those who still care about thinking, that besides the usual hedgies desperate to chase a bit of performance now into year end, Europe drags its feet those last days, BIG. Europe is 7% lower than last time Spoos were 1940s

i would say Europe punters are a bit more old school and less perturbed, or should i say mind fucked, by dat QE game. Next, you can throw credit traders who know a thing or two. And the trend to come is down.

let me add that there are less Chinese to buy Mercedes and Hermes bags today, marginally less oil money, no consumption in Europe and it ain't hard to see where the old continent is going. Banks here still HAVE to deleverage, a concept that both households and banks in the US are unable to grasp

so, back to Mickey land where equity prices do not follow the real economy, and as much as i wish every punter like Jim to make truckloads of money on the way up, i warmly hope they'll be the first ones to sell when time has come. Sincerely, good luck and thank you for your enthusiasm

this last year i've been sounding like a total fool when advising caution. A complete retard, old school geezer who cannot spell Q E. I also remember how i was begging friends and bloggers to not panic late 2008, and by all means to not sell early 2009

things go both ways, and much quicker on the way down, i can tell you that much from the difficult phases of 1998, 2000, 2003 and 2008 on record so keep it in mind when you're buying equities 'because your central bank pushes you to'.

We want a fun forum here where nobody gets hurt

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Anonymous
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October 22, 2014 at 2:48 AM ×

Nico, say advice to you pal. I know a lot of smart traders who have been on/off shorting this thing since August 2011, grumbling about Central Banks the whole way up as if CB jawboning hasn't always been a crucial, dare I say THE crucial, part of global macro.

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Anonymous
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October 22, 2014 at 6:49 AM ×

Nico, I wish I would have listened to you in late 2008/early 2009. Also to LB, who called the bottom within a day or two after it happened. The LB Bottom, I believe he should have trademarked it....

- Whammer

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CV
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October 22, 2014 at 7:01 AM ×

Wow, this conversation changed a tact or two. I am certainly sympathetic to the notion of Spoos still having a few surprises up its sleeve, but like LB I am not in it. I fully agree with the "clueless and uninvolved", and incidentally also share MM's overall thesis. Rig

Now, as for Europe ... I certainly agree with you Nico that the "no growth" situation does not look good, but on the banks in particular. Price is depressed and Mr. Shorty has already had his pound of flesh, AQR is coming up, the ECB is providing free money in one end, and buying/underwriting their products in the other end. Surely there are more obvious prey out there?!

Unless you can time the random number generator that is US regulators' fines, I just don't see the upside. Also, if you look at stock-to-bond ratios using benchmark rates in the Eurozone, they hugely favor equities (in Germany at least). Again, I just think that there are easier shorts right now.

Maybe it is just me.

Claus

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Nico G
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October 22, 2014 at 9:54 AM ×

Anon 2:48 it has been impossible to short the US since 2011, i hear your point. We are three years later into the rally now. Pricewise the spoos can test 1700 or even 1600 without even doing damage to the charts, but an awful lot of damage to unexperienced traders hence caution being advised here

i trade Europe which has always been the much easier short and still is (Claus) AQR is a drop in the pond vs gigormous amount of sovereign debts held by European banks and more so by insurers. imho the yield compression peaked this summer and the pigs yields will go back up so yes equities can outperform bonds but the absolute return for pigs is questionable

Germany has the least bad outlook but the smart bulls overstretched that market for that very reason. Germany export clients are struggling, domestic consumption could never relay this especially when the population is told they re gonna have to pay for the clowns in the south. Eurostoxx is heavily waited in oil and banks so is quite a blues to short this quarter

just trying to throw different colors here, i am not sophisticated, but I am not interested in reading triumphant US equity bulls here either, the blogoshere is full of that. What you need to ponder is this: how long can you distort your logic to accommodate the heavy CB rig in your trading? Or is that the logic you grew up investing with, if you started after 2009?

If you want to trade for another 20 years you need to mentally prepare yourself when 'normal' logic resumes on the market and the transition will per essence be brutal. There are very smart investors out there worried about the markets because of that.

Carl Icahn worried about high yield recently. I prefer Icahn to Cramer any day, and high yield is where shit starts, which has already started. Yesterday i reshorted 50% stoxx and might wish i had been more agressive. Bulls should have not celebrated about yesterday's rally, but worried about how brutal it was. A harbinger of more brutality ahead. Good luck!

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Anonymous
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October 22, 2014 at 11:00 AM ×

Most meaningful corrections unfold over a span of 2 to 3 months and, more often than not, are based on 2 waves of selling (smart money dumps stocks, day trader and dentists buy because it's "cheap", then, the bloodbath)
I would tend to think we will have another strong pullback in US equities (1700 ish ?).
Coming december, the FOMC will try to reignite the fire under assets and this will be the last (but powerful) revival of the CB omnipotence narrative (and I expect a tremendous blow up à la 1999)
Good trading

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amplitudeinthehouse
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October 22, 2014 at 11:47 AM ×

Its been a tough couple days and I finally found Anon 11.00 to console with.
The short term BTFD is exactly the same as previous BTFD patterns, what's that tell you.
It sits alongside my short thesis for now.
Its tough going guys , but the worst is over and nothing is going to drag me back into that cycle of market players , I DON'T CARE HOW MANY LAYERS. YOU DON'T HAVE TO PAY TO FOR IT IN SPADES. WHEN THE GOING GETS TOUGH THEY DON'T GET WEIRDER ,OH NO, THEY GANG UP :)

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Polemic
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October 22, 2014 at 11:52 AM ×

Its basically a Damocles week (Sword hanging by a thread) and there is little new news to feed into the price/macro machine. Commentary around the finance space has just turned bimodal and a bit early christmas pantomime ..

'Oh yes it will, Oh no it won't, Oh yes it will!'
With a healthy dose of .. 'It's behind you!, Oh no it isn't, oh yes (repeat)"

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CV
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October 22, 2014 at 12:01 PM ×

Ha Amps, ditto ... well I am not sure that scenario would be very "consoling" for me ;), but it does makes sense to me. I have a theme for what is going by the way.

"Ferocious bears, feeble bulls"

I mean, anyone with half a brain can see the setup for a washout in Spoos and potentially elsewhere. It is just that doing the same thing over and over and expecting different results is, after all, the definition of insanity. I have been and remain deeply sceptical of this bull market, and this is still the overwhelming sentiment I get when looking at the market. Most of us, I imagine, are simply trying to carve out good opportunities here and there where we think pricing is favorable and every time we do, we have to face the Damoclean sword of a 1987 type crash or some other denouement a la 2008.

Frustrating times.

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CV
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October 22, 2014 at 12:03 PM ×

Amazing Polemic ...!

And no, Polemic and I are not on the same desk (not even the same borough!)

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amplitudeinthehouse
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October 22, 2014 at 12:34 PM ×

CV, you really do have to trade and feel the losers to reach a point where you don't give a flying f**k what the higher powers on Wall st and in the City have to say anymore.
The is and has always been that they don't have any skin in the game and it's become a bit of lark to watch the bull market correct to only reattach itself to the primary up trend to only correct again.
At the end of the day it's all a lark for everyone but the trader that is waiting..waiting..waiting..you get my drift..may eventually escape the confines of regulatory guidelines set around him and trade on a desk with traders that are as willing to put as much skin in the game as he is.
But hey, if the trader is ALWAYS stuck at his desk what is the risk of him thinking outside the box.....I'll tell the risk.....
F**KING PLENTY!

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amplitudeinthehouse
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October 22, 2014 at 12:56 PM ×

Addendum:

Just to let you know, there isn't a day that I don't sit at the desk and think where the P&L would be during this correction if it wasn't for the trusty excel solver spreadsheet, you cannot imagine what this trader is thinking when the next trade comes along.
Back to the football ratings and fast!

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Anonymous
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October 22, 2014 at 12:56 PM ×

C Says,
Well, I'm ready to go Yogi ,but why rush it. This kind of V
shaped bounce is typical of fast liquidations and that usually follows with lower volatility disagreements followed (if it's
going to resolve down anyway) with latecomers getting the urge to jump back in when they have refund their balls. Then when we have enough of them long we have the ability to flush ,but I think as it stands we need to give this time to form up.
Pol, don't look on the stage he's still in the audience waiting ;)

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Anonymous
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October 22, 2014 at 1:37 PM ×

Citigroup comes up with a number and it's 200 billion per quarter...

http://www.bloomberg.com/news/2014-10-21/how-markets-need-200-billion-each-quarter-from-central-bankers.html

Big bank vaults are stuffed with cash so they buy US paper ( 145 billion last 12 mos. ) to make room in their vaults for even more cash...

http://imgur.com/RbY1uoF

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Macro Man
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October 22, 2014 at 2:05 PM ×

The problem ultimately resides with the fact that banks would rather own UST's at minimal yield than make loans.

We have 5 years of data to suggest that reducing the yield on UST's does little to incentivize banks to replace them with loans.

Of course, any mis-step by banks is punishable by fines from multiple regulators, and loans attract heavy capital charges.

Small wonder that they park their cash in Treasury securities, which are so pure and free of taint that they're even exempted from the Volcker rule!

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Anonymous
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October 22, 2014 at 2:14 PM ×

@ReutersBiz: Pimco banking chief expects 18 lenders to fail ECB stress test

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Anonymous
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October 22, 2014 at 2:32 PM ×

@MM
Significant demand for loans is minimal except mostly for big Cos funding stock buybacks with a mix of cash flows and borrowings;
The wall of worries hasn't prevented the S&P from rising but has prevented small and medium size businesses from investing. (granted loan standard are a bit tighter).
I expect a loosening of lending standard within 6 months and then it will be interesting to watch this liquidity hiting the economy.
The CBs want more inflation, be careful what you wish for, you might get it....

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Macro Man
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October 22, 2014 at 2:41 PM ×

@ Anon. The fact that Ben Bernanke got dinged for a refi would suggest that lending standards remain quite tight, n'est-ce pas?

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Anonymous
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October 22, 2014 at 2:53 PM ×

Indeed, but I would classify it as anecdotal if not self serving (we, central bankers, are mortals after all, la vie est dure pour nous aussi, don't come for our hides when it all goes kaboom)

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amplitudeinthehouse
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October 22, 2014 at 3:09 PM ×

Macro Man, I know the facts about the refi rate, but seriously , these bankers and powers that be haven't taken a forward step that has mitigated the situation , and it's now apparently clear that they really don't have much of an idea of the hidden cracks within there castle.
Let's call it a day and be done with it after this bull run and let this mug move to Happy Valley , HK, and enjoy his final years. It's simple , it's the only place where he really wants to be, let him go!

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amplitudeinthehouse
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October 22, 2014 at 3:32 PM ×

I was reading the other day that a Hedge Fund in Melbourne solely trades on sports and racing, that's us all over!
Horses for courses , if you haven't noticed:)

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Leftback
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October 22, 2014 at 5:05 PM ×

Agreed with everyone, in principle.

Nico, this market (spoos) is indeed going down.
But like C, I think the flush happens later, after a period of backing and filling.
Like CV I remain clueless and on the sidelines.
B/c, like Pol, I see very little data to drive FX this week, hence vol selling and spoos drifting up.

One thing the peanut gallery are collectively good at here at MM is to identify the consensus trade and then point out that everyone is on the same side of the boat.

What I would like to point out here is, just as at the end of 2013, "everyone" called for higher rates, right now "everyone" is calling for a higher USD, as "everyone" waits for the US recovery, and "everyone" is convinced that Europe is heading into a deep recession, "everyone" thinks that peripheral bonds will blow up, and hence "everyone" hates the Euro.

What if?:

a) Some limited ECB QE is already priced in.
b) Massive shock and awe QE is off the table.
c) Europe doesn't actually have a deep recession.
d) Banks hold their peripheral sovereign bonds.
e) US growth continues to be flaccid.
f) Dollar longs find they are over-extended.

This will take a few more days to resolve I think, but USD crosses don't seem to have much momentum and the charts for EURUSD and JPYUSD are looking more constructive.

If we are right and DX reverses lower, then we are back to EMs > DMs, and within that universe the miners, materials and energy should do OK, most notably in oversold markets that should undergo some mean reversion this winter (cough: Russia and Brazil).

Complicated thesis, but doesn't involve The End of the World As We Know It...

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Leftback
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October 22, 2014 at 5:25 PM ×

One more thing: "everyone" expects loads of banks to fail the ECB stress tests, results to be announced Sunday. Right now, that's likely to be the market mover ahead of us for EURUSD. Buy the News?

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Anonymous
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October 22, 2014 at 6:06 PM ×

Leftback - 1st - great calls last few days.

I generally think this is the 8th or 9th inning for the equity bull run - problem is that 8 vs 9 could mean a difference of 15% and 6 months - right now I am inclined to agree with the seasonality/santa rally crowd, but that's easy to say from the sidelines.

On your EWZ/RSX stuff - to me the energy/EM story is structurally over, so as long as you know you are renting and not buying rallies in those you will be fine (full disclosure I retain some RSX length thinking it gets to 24 by Dec) - I think this market fully expects ECB to start QE in December with no impact, so on the margin it will be more about US centric news and fed action.

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Mr. T
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October 22, 2014 at 6:13 PM ×

I think the long dollar trades will continue to work through FOMC. It seems highly unlikely that fed is going to change stance with respect to ending QE based on a brief but gone period of volatility. What sort of signal would that send to the market? While still very dovish it seems like the fed (as an organization, not individual bankers talking) is trying to back away from the implicit put.

If this is true, then we are basically back where we were 2 weeks ago - US tightening with the rest of the world loosening. How is that not dollar positive? For my book, when I am overthinking the trade it usually means my size is too big or my timeframe is too short.

'spoos and blues is going to have a rough next year imho.

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amplitudeinthehouse
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October 22, 2014 at 6:49 PM ×

I'm sick to death of hearing how the FOMC is selling Bonds, enough is enough, they've had years to separate bonds and stocks from inside the bank vault. It's time to let the market run free on it own accord , that's letting it go where ever it wants to go.....don't you think it's earned that right.

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Nico G
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October 22, 2014 at 6:50 PM ×

let's carry on with the tilted boat:

"everyone" is expecting this nice V bounce to continue into Santa and print new highs just for bonus time

how about that one for a crowded trade

after 3000 triple test resistance am back to full stoxx short and will monitor retracement of retracement and perhaps some

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Anonymous
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October 22, 2014 at 7:20 PM ×

if 'everyone' was/is expecting a year end rally then why on earth were people puking their guts last week? No, more likely this remains the most distrusted, hated Bull market in history. Bull markets don't end with such hate permeating and lingering. They end when people are afraid not to be long.

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amplitudeinthehouse
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October 22, 2014 at 7:26 PM ×

And where should the FOMC guide there bonds, well Asia for starters.
The underlying guarantee of these arrangements of bonds now have the strength of a half-dozen donuts soaked in coffee and is stamped at this quality forever. Arrangements are not what they used to be.
Let's stop the rot, and move to another paradigm of thinking that eliminates the deadwood. If we are the ones that at the end of the day are going to be making the trades than fuck the guesses trying to buy and sell and arrange everything to be suitable for a fairy tale within a fantasy castle.....that's bullshit, my best thinking has been in moments under the gun.
Horse for courses! no more arrangements.....let the horse run free!

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Anonymous
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October 22, 2014 at 7:34 PM ×

C Says
Precision isn't in my vocabulary so I could start going short around here and build ,or I can wait. I'll do the latter.

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amplitudeinthehouse
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October 22, 2014 at 7:41 PM ×

Oh, I forgot, if you need telling after today , you boys on the NY desk.....than yeah, were done!

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abee crombie
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October 22, 2014 at 7:56 PM ×

Where will the S&P go, I am not sure. Are we setting up for an epic H&S or was this just another bounce that we should have blindly bought. Too early to tell. My gut tells me R2K will lead this market higher but its just a hunch now.

Whats more interesting IMO is EDZ5/10year rates and oil. The deflation vs slow growth theme.

Long dollar seems secular, IMO. How that plays out with China is a big question. Elephant in the room is a big devaluation by China, which probably comes at some point if Dollar continues going straight up and China slows worse than the Party wants

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Anonymous
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October 22, 2014 at 8:04 PM ×

obvious from the price action this late wednesday that there is some serious distribution going on for the first time since last week's low....is it the real thing which will carry us to the mid nov low? too soon to tell...

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amplitudeinthehouse
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October 22, 2014 at 8:55 PM ×

The closer for the today.....You can destroy me NYC , I have no doubt, but you'll only prove what I already know.
That is you can destroy but not build.

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Anonymous
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October 22, 2014 at 9:02 PM ×

>>> No, more likely this remains the most distrusted, hated Bull market in history. Bull markets don't end with such hate permeating and lingering. They end when people are afraid not to be long. <<<

Most hated? Hated in '12, not so much in '13, and by the start of '14 palpable fear of missing out emerging. IMV.

4th wave corrections are the oppo for the FOMOs® to come share the love. In good time as the 5th matures, for sure no one's missing out then and Yazz is on repeat.

So was that the 4th done, or just its A? My rearview's less foggy than my crystal ball, so I'll pass, except to say that '15 is when the 5th rips a few more faces off until there are none more to rip and the real entertainment commences.

Innit.

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Anonymous
admin
October 22, 2014 at 10:38 PM ×

UST all going green in AH . 10yr UST up 1/4 point off noon lows

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Anonymous
admin
October 22, 2014 at 10:40 PM ×

$BALT today . $4.30 high print to $3.67 close or a 15% plunge intraday

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Anonymous
admin
October 23, 2014 at 12:40 AM ×

Don't be a grinch! It's festive time in India!Appy Diwali everyone...who culd'eve knowed..INR hasn't buzzed.Transfer of wealth I suppose and Blankfeind doin' God's work!

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River
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October 23, 2014 at 2:16 AM ×

@Whammer,do you remember ben22? I have followed him and LB since 2008/2009 Ritholtz blog.I can say he is one of the best technical trader out there.Neither bull nor bear..trades what he sees on his charts! He called this huge bull move in U.S. equities from Nov.2012.He is a CMT now.If you like you can check out his tweets at @FatF1nger and his blog at http://fatf1nger.wordpress.com/2014/10/05/evening-observations-10514/

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River
admin
October 23, 2014 at 2:16 AM ×

@Whammer,do you remember ben22? I have followed him and LB since 2008/2009 Ritholtz blog.I can say he is one of the best technical trader out there.Neither bull nor bear..trades what he sees on his charts! He called this huge bull move in U.S. equities from Nov.2012.He is a CMT now.If you like you can check out his tweets at @FatF1nger and his blog at http://fatf1nger.wordpress.com/2014/10/05/evening-observations-10514/

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Anonymous
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October 23, 2014 at 3:46 AM ×

@River, I do remember ben22 for sure. I have wondered what happened to him. Thanks for the pointer!

- Whammer

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