J'A-QQQQ's

Nasty price action all around recently, but particularly in the riskier spectrum- Europe and the Nasdaq.




The flight of the flamingo rumbles on......
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Nico G
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October 10, 2014 at 8:51 PM ×

very ugly weekly close the game has FINALLY changed

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Anonymous
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October 10, 2014 at 9:22 PM ×

Nothing's changed because there's too much at stake. We'll get a CB stick save again just in time for the holidays, exactly like years past. Plus ca change.

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Leftback
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October 10, 2014 at 10:39 PM ×

2.28% on the 10y. Eventually a few punters will wade into the muck, especially looking at the yields out there in European equities.

The safe havens were diverse this week, basically all the low rate portfolio stuff that was being dumped in the crapper last summer and again in December has turned up trumps, and a few foreign markets seem to be ignoring the commotion, perhaps b/c there is little leverage in play among shareholders.

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Polemic
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October 11, 2014 at 3:18 AM ×

don't buy til you see the 27th Oct,

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John Dudley
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October 11, 2014 at 12:07 PM ×

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Anonymous
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October 11, 2014 at 1:55 PM ×

Microchip Steve Sanghi Thursady PM...

"We believe that another industry correction has begun and that this correction will be seen more broadly across the industry in the near future."

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abee crombie
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October 11, 2014 at 2:45 PM ×

Ebola killing the airline trade. Ok makes sense. But the bigger story is oil. Short the mlp 's if oil continues to go down, as it could be a game changer for oil.

Russia I love your valuations and I can't sell my sberbank at .7 book. but this is probably the worst thing for you. Venny you might be next.

Big week of us earnings next week. Need to see some blowouts..

Yes the s&p is only down 100 points from the highs but if you start looking at individual names lots are just killed ...

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Anonymous
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October 11, 2014 at 6:25 PM ×

The bottom 40% of $NDX companies were down an average of 4.9% Friday. Full breakdown...

http://tinyurl.com/om6x7vw

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Anonymous
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October 12, 2014 at 3:36 PM ×

why 27th Pol?

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Nico G
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October 12, 2014 at 6:29 PM ×

ano 9:22 if you don't see change you can only blame yourself

unless you started trading in 2009

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Nico G
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October 12, 2014 at 6:32 PM ×

abee there is NO accounting in Russia

you can't know the book that you're buying

buy when they buy, sell when they do

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Anonymous
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October 13, 2014 at 12:05 AM ×

"there is NO accounting in Russia"..and China,India included.So many small caps listed on TSX are an example. Sino Forest and many others unravelled(?). Satyam comes to mind from India.

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Gnome of Zurich
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October 13, 2014 at 8:24 AM ×

Price/book is meaningless in a bank after a multi-year credit boom with double digit loan growth in an economy that's about to enter recession like Russia. Book value becomes relevant again after most of the loan losses are taken.

And I would second all of Nico's reservations about Russian governance.

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Anonymous
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October 13, 2014 at 10:05 AM ×

C Says
I would have thought it obvious that in an economy where the state enlists the aid of companies and employs them has tools of policy that the very term 'governance' has a different meaning entirely from economies where such does not occur in any significant manner.

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Anonymous
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October 13, 2014 at 10:07 AM ×

Indeed I would have thought this is exactly the sort of issue that put's the caveat in caveat emptor

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Polemic
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October 13, 2014 at 10:59 AM ×

27th oct - nothing data or event driven. I just remember the normal sept/oct sell off price actions that see the negative psychology re the down move peaks about a week before that (1987 for example) and by then things balance out and buying begins.

So I am happy to wait til then. if it recovers before then then c'est la vie, lost opportunity but clearer direction.

Have to say apart from non disaterous china data I can't see any good news ahead, just hoping for less bad and some ECB action now that Germany has caught the PIGs disease (European Swine flu maybe we should call it) and may not be so keen on refusing the ECB medicine.

Overall think the old rule of sell where the leverage is greatest but I really don't think the leverage is anywhere near it was ( outside public finances) in last dump periods.

As for the random fear stories of a financial crisis part 2 - No way. Financial conditions are good and Bank balance sheets are fine in general. More like it's corporate balance sheet leverages that are more at risk. SO perhaps greater risk of a corporate crisis rather than a financial one.

Pol

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Anonymous
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October 13, 2014 at 3:04 PM ×

Traders are bouncing off the walls after 5 years of not having to think.

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Anonymous
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October 13, 2014 at 3:13 PM ×

Nomura: Traders have the largest net long US Dollar position on record.

Time to short?

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CV
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October 13, 2014 at 3:50 PM ×

Apart from agreeing with Pol that the next "recession" will not likely be a huge financial(!) crisis the one thing that is still missing from me is cracks in the credit or fixed income space. High yield does not count here. I want to see yields spiking higher on "safe" IG, taper tantrum price action, sovereign yields in the periphery moving higher, a cascade of financial bankruptcies in China ... SOMETHING to signify that the hunt for yield is over, or at least being really challenged.

Rotating from HY into IG does not qualify here ... A mini-crash in Eurozone equities because of a recession (I mean duh!) is a mere speed-bump compared to what would happen in fixed income and credit really starting to crack. Right now, the easiest trade in the world is to buy carry on the US long end funded in EUR or JPY (well cue a EURUSD perhaps but still). This is just a carry trade by another name and essentially sovereign QE/Operation Twist by proxy.

Bid/ask spreads on IG are the new interbank rates anno 2014 ... I suppose all this makes me complacent in equities (by default), and I very wary about this, but if rates go to zero across the US yield curve, flooded by money from JPY and EUR, I just can't see how that is the big crisis 2.0.

Claus

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Leftback
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October 13, 2014 at 6:53 PM ×

Agreed, this is a very different kind of sell-off from 2008 (and not to say that this is the end of it). There were entire sectors that didn't blink last week, even though small craps were dumped. In 2008 it was EVERYTHING out of the window, as leverage met lack of liquidity.

The model for this would be the Nikkei roller coaster in between the QE orgies of the 90s. JGB rates didn't zoom higher (they drifted lower), credit spreads wobbled but didn't crack wide open, but equities generally sold off in Japan b/c, um, people started losing money and so they stopped buying 'em, and there was clearly no inflation to hedge against.

Crude oil seems to have turned upwards today from last week's lows, and yes, agreed with Nomura - long USD has become a crowded trade.

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abee crombie
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October 13, 2014 at 7:30 PM ×

Interesting thoughts CV, re: IG credit. I was looking at my fixed income sheet and noticed not too many names sold off that hard last week, especially the preferreds which usually dry up when liquidity is absent.

I still feel like EU is 2-3 years behind the US, so any dips should be put in perspective. Monetary policy is going to get easier and so, probably will fiscal. This is my focus for now, EuroStoxx. Chart is ugly but sentiment is so onesided now, who knows

The game changer here could be oil and rates, IMO.

MM's favorite EDZ5 is on the verge of breaking out the upside, and if the markets keeps falling its gonna be hard for anyone to stand in the way. 10YR, I got no clue anymore and same fear trade can do what it likes.

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Anonymous
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October 13, 2014 at 8:06 PM ×

So if Bill Gross left PIMCO b/c it was too difficult to manage PTRAX as a massive fund, what will he do when he is suddenly in charge of a Huge Janus?

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Leftback
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October 13, 2014 at 9:08 PM ×

If you want to see ugly, look at the airlines today... always such a great way to lose money.

In general it was another painful day for US dip buyers as the Spooz continue to ooze lower. We can expect lower rates tomorrow, 30s <3.00% for sure, and that's reflected again in the (lack of) action in REITs, preferreds, munis and other such income vehicles. There are currently two groups of investors, one group sitting twiddling their thumbs between dividend payments and another on the ledge outside the office window.....

The turnaround in Brazil seems to be sticking for the time being, those charts are looking a lot more constructive. More value in BR than IC.

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Anonymous
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October 13, 2014 at 9:43 PM ×

C Says
So little bounce off so called support levels and then a EOD dump. This is not anything like what we have seen in the last couple of years. Anyone dreaming of Kevlar might want to think again.
Far as Corp bonds go there are certainly some individual names that are already trading down where that risk rating has not been for years ,but at this point they're not the financials and that's about the only difference so far.

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Nico G
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October 13, 2014 at 10:30 PM ×

when you've seen how much they've stretched it to the upside (say, above spx 1680), how deep do you think they can push it south

you can bid on technical supports and/or 'fair' valuations but all that NYSE margin being called on the way down might clean your stops

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Anonymous
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October 13, 2014 at 11:24 PM ×

"Stock market regulator Securities and Exchange Board of India (SEBI) has barred India's largest real estate company and its top officials, including chairman KP Singh, from accessing or dealing in stock markets for three years. The SEBI order found the company and six of its top officials guilty of suppressing material information in its offer document at the time of its public issue in 2007".

http://www.tribuneindia.com/2014/20141014/main1.htm

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Nico G
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October 14, 2014 at 5:38 AM ×

haha a you gotta love them Brics

since we are the banana theme, the European Court of Justice is scheduled to hear testimony on the ECB’s non-existent Outright Monetary Transactions program.

That famous OMT bazooka

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