Number crunching

26.1% :  The amount that retail gasoline margins expanded in the United States last month, even as prices dropped $0.34/gallon.    (Hat tip: Anony from the comments section.)

202,000:  Number of Google results for "FX price fixing"

542,000:  Number of Google results for "Gas Station price fixing"

$500,000,000:  Average annual cost to the world if one assumes a daily FX fixing volume of $10 billion and that each rate was wrong by an average of 2 bps (bear in mind that those orders against the main direction of the fix receive a windfall, not a cost!)

$1.34 billion:  Average annual cost to just US consumers if we assume price gouging of $0.01 per gallon

$4.3 billion:  Amount of FX-related fines levied thus far

$41 billion:  Amount of total FX fines expected by Citi bank-stock analysts

$594 billion:  Total subsidies, in 2010 dollars, to fossil fuel companies from the US government, 1950-2010.


--------------------------------------------------------------------------------------------------------------------------------

BONUS SECTION



0:  Policy rate moves delivered by Mark Carney

6%: Current UK unemployment rate

7%:  The threshold unemployment rate for considering rate hikes, unveiled by Carney sixteen months ago 

£870,000 : Carney's salary and pension contribution

:  Ratio of Carney's compensation to policy moves

250,000: Approximate world population of chimpanzees, each of whom could have delivered the same monetary policy result as Carney

 


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abee crombie
admin
November 20, 2014 at 2:08 PM ×

10 weeks in a row US claims under 300K

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washedup
admin
November 20, 2014 at 2:26 PM ×

how much of the persistent low claims are a consequence of people running out the clock on the number of weeks they can claim benefits for?
not a rhetorical point, I would appreciate it of any of the punters here have done any work on this and care to share.

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Anonymous
admin
November 20, 2014 at 2:27 PM ×

Global PMI's - what bet GDP in Germany sees downward revisions next time indicating recession
US snow - didn't that hit US GDP last time?!
Caterpillar sales down 10% warning.
US cpi
BBVA rights issue - -I thought they got the all clear in bank analysis.

Nothing seems to matter. And then it all happens at once.

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Anonymous
admin
November 20, 2014 at 3:18 PM ×

How did you calculate that 'cost of FX fixings to the world' number?

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Anonymous
admin
November 20, 2014 at 3:59 PM ×

HSBC...Global seaborne iron ore output will exceed demand by 100 million metric tons this year from 16 million tons in 2013

“Our company has been very clear that the time for massive expansions of iron ore are over,” BHP Chief Executive Officer Andrew Mackenzie

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Anonymous
admin
November 20, 2014 at 4:06 PM ×

SG's Edwards: When this cycle ends, outright deflation seems a near certain outcome in US just as it now knocks loudly on eurozone’'s door.

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Anonymous
admin
November 20, 2014 at 4:10 PM ×

MNI...Deflation would unite ECB, ECB's chief economist Praet who stressed that he didn’t actually anticipate deflation.

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Anonymous
admin
November 20, 2014 at 4:17 PM ×

Just came across a big trade. One or two traders purchased the $SLV April-2015 $18 calls over 33,000x for $0.27 on November 13th

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Anonymous
admin
November 20, 2014 at 4:26 PM ×

Bloomberg..S&P 500 Companies Spend 95% of Profits on Buybacks, Payouts. CapEx, not so much.”

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Anonymous
admin
November 20, 2014 at 4:44 PM ×

House of cards?

Unemployment benefits only 6 months now in US. You can bet a lot of that decline in weekly claims has come from expiration of benefits rather than new employment.

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Macro Man
admin
November 20, 2014 at 5:22 PM ×

The end of the benefit extension would impact continuing claims, not the headline initial number.

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Leftback
admin
November 20, 2014 at 6:44 PM ×

Polemic's New Real Top is getting bigger every day. Good call on that one.

A bit of pre-expiration nonsense going on this morning. Time to step aside while they pin the tail on the donkey; next week will be a Mickey Mouse market. Time for more new highs and party hats before things get serious again on December 1st.

Have a great holiday, all.

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Leftback
admin
November 20, 2014 at 7:33 PM ×

A decent piece of writing here by Kevin Flynn that reflects the views of many of our commenters:

Before It's Too Late

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Leftback
admin
November 20, 2014 at 8:22 PM ×

Since we are number crunching, a fascinating piece of analysis here on SPX and its 5 hour MA, above which we have now closed for 24 straight days. The last such streaks were in 1991 and 1987.

SPX 24 Day Streak

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Anonymous
admin
November 20, 2014 at 10:03 PM ×

Fed balance sheet hit fresh record. Total assets rose by $3.86bn to $4.492trn Nov19

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Anonymous
admin
November 20, 2014 at 10:13 PM ×

LB...26 in 1986, but then again who is counting :)

http://imgur.com/Catp0Uw

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Anonymous
admin
November 20, 2014 at 10:16 PM ×

Fed says it is reviewing its examinations of large banks.

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CV
admin
November 21, 2014 at 10:50 AM ×

Seems that the carry monkey managed to get an extra large pellet this morning when he the pulled the lever, due to the Plunge Protection Team LLP from China and Europe ... it ends, when it ends, but it doesn't look like it is ending just yet.

Amazing!

Claus

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Polemic
admin
November 21, 2014 at 12:45 PM ×

Oil.
The elastic in commodities is pretty stretched to the downside. This could be interesting. AUD/NZD a nice up trade perhaps.
And where do I buy that distressed Energy HY?

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Anonymous
admin
November 21, 2014 at 1:25 PM ×

CV...It will only get worse, the medicine is the poison

China panics, Draghi "we must drive inflation higher, as fast as possible" - whereas Abe in Japan said Yen was "falling too fast"

Keep it up boys and you will blow us all up.

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washedup
admin
November 21, 2014 at 1:42 PM ×

1. Oil Up
2. Dollar Up
3. Gold Up
4. Bonds Up
5. Equities Up

Invoking the Farrell rule, when everyone reviles the same thing (in this case, cash, or being uninvested) it is bound to become the right choice in short order!
Wait? they will charge me to park cash?? bwahahaha, I guess i have no choice but to pick one of those 5..

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Anonymous
admin
November 21, 2014 at 1:44 PM ×

How ironic, western monetary politics now having the presumably unintended consequence of giving Russia relief in the form of oil price and rouble going up. I thought they were supposed to get, you know, crushed.

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CV
admin
November 21, 2014 at 2:03 PM ×

@Polemic: S5ENRS to drive the index to 2100 into year end? ... Santa Rally, Santa Rally, Santa Rally ...

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washedup
admin
November 21, 2014 at 2:09 PM ×

since when does the chinese economy respond to monetary stimulus? the only thing that has ever worked in that economy is directed lending and mandated infrastructure buildout like in late 2009 - so I think this reaction in hard commodities is a bit misplaced - will they really now "borrow cheaper money" to increase already gargantuan overcapacity in steel, coal, and real estate?
But then, I suppose its better than achieving it through fiscal stimulus of 20% of GDP which had the unintended consequences of greasing the palms of approving public officials, and therefore must be a no-no in the new and squeaky clean china.
Only one problem, they brought forward about 10 years of demand in the last 5 - the piper is knocking on the door..

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Polemic
admin
November 21, 2014 at 2:17 PM ×

Agree washedup with the long term re China but it more feels that we have hit the Towel Chucking phase on short stock positions.

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Mr. T
admin
November 21, 2014 at 2:27 PM ×

@washedup - I think you are missing the intention. At this stage I don't think the rate action is supposed to have a direct impact on the economy (although there may be a modest one). The market appears to be interpreting it more along the lines of China saying they will not let the rest of the world debase (peg or not) without them getting in on the action too. Also, that their general stance will be "loosening", which in addition to rate moves will likely include all the more direct measures they have historically taken.

This rally viewed through the lens of global "fx wars", or asset inflation, or even just international flows makes a lot more sense than trying to justify the moves looking at earnings or cashflow or yields etc. There are certainly problems with this view (like why does it appear to limited to just stocks), but a lot more clicks into place.

As an aside, I started shorting US stocks a couple days ago. I've not been outright short all year, and let me tell you its a very uncomfortable position. I'm gonna put my tail between my legs and walk away from this one losing money but I think gaining a little bit of insight. I don't know how many people are really short, there must be some, but actually putting that position on and riding it for a couple days is like sticking your...well its very uncomfortable. Good luck to the guys trying it, I'm gonna stick to my spreading and whatnot for now.

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CV
admin
November 21, 2014 at 2:44 PM ×

"Good luck to the guys trying it, I'm gonna stick to my spreading and whatnot for now."

Well isn't this the point Mr. T. I mean, really ... the killer strategy has been sector/country based this year. Try for example:

1) Long US tech/health v energy
2) Long Europe health v the index
3) Long India v commodity EM

etc

Claus

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washedup
admin
November 21, 2014 at 2:49 PM ×

T - you are right about the backdoor currency war idea - they tend to be zero sum unless they act to fix some capital bottleneck (for example I would be more sanguine if this rate cut meant chinese consumers would save less and spend more, with FAI shifting elsewhere in the world - issue as I pointed out is global overcapacity, so this is bullish dollar, which for now temporarily, is bullish risk and equities - sorry to hear about ur short - think mr market telling us its early for that - IMO long us 10 YR is the best idea for equity bears rt now - they will do OK in that trade no matter what.

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Leftback
admin
November 21, 2014 at 2:52 PM ×

Ah, what would mornings be without yet another bazooka? China doesn't went the CNY left high and dry, so of course they joined the party.

Mr. T, I believe the expression you are looking for is, "it's like sliding down the side of a razor blade using your balls as brakes". For reasons related more to options expiration dynamics than any ECB/PBOC bazookas, we covered our IWM shorts at 9,31 yesterday. Better lucky than smart.

It does appear that we may have seen the bottom for 2014 for a variety of FX, including RUB, BRL, AUD and HUF, among others. We'll see whether oil is really done exploring the lows once this squeeze subsides.

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Anonymous
admin
November 21, 2014 at 3:03 PM ×

@T

Thank you for the insightful comment. I have been short SP for the past few days as well, with a much smaller position. I am glad that I got out of that trade yesterday with an overall small loss. But I would try it again next Wed or the Monday after that.

It seems to me that all major economies have done easing and ECB has been priced in somehow. Since all the macro-'good' news are out, I am wiling to bet on a short term correction after the holiday.

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Leftback
admin
November 21, 2014 at 3:12 PM ×

Spain still 30 bps "safer" and Germany about 150 bps "safer" than US10y. Not going to be much pain in USTs while that spread remains in effect. US bond bulls will continue to be frustrated.

Guys, if you must short, why not do as the big short funds would do and select a sector, stock or index that has lagged rather than led? We have made a bit of money lately shorting IWM, even as the SPX has risen every day. Just a thought.

On the whole, shorting equities is still like sticking your plonka into a blender full of jalapeños and then turning it on.

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CV
admin
November 21, 2014 at 3:34 PM ×

"it's like sliding down the side of a razor blade using your balls as brakes"

+

"shorting equities is still like sticking your plonka into a blender full of jalapeños and then turning it on"

= I just very nearly pissed myself.

I agree on the lagging index, though, but could it just be a case of the big catch-up now into year end?

Claus

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washedup
admin
November 21, 2014 at 3:40 PM ×

leftback - thx for ur thts but I'm confused - ur argument for not being long USTs is that spanish and german yields are a lot lower? to me thats bullish not bearish us bonds - care to elaborate? thx much.

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Anonymous
admin
November 21, 2014 at 4:39 PM ×

Nasdaq $NQ_F up 16% last 4 weeks of trading. That is clearly a parabolic rise, one that ultimately breaks the market.

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Anonymous
admin
November 21, 2014 at 4:39 PM ×

I think LB meant to say "bond bears will continue to be frustrated", but I'll let him speak for himself ;-)

- Whammer

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Polemic
admin
November 21, 2014 at 4:43 PM ×

Ok, lots of reasons being posted as to why eqs should go down but that being married with how dangerous it is to actually go short ( Basically any genital in a fast rotating metal device reference) .. but Is anyone here actually long?

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Anonymous
admin
November 21, 2014 at 4:47 PM ×

NATIXIS...Why has the world become disinflationary?

http://tinyurl.com/mhtfyy5

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November 21, 2014 at 4:55 PM ×

Polemic at 4:43 PM

Depends on who is here. For wage slaves with macro pretensions like myself we can't help but be long. 401's, ROTH's, pensions etc.

I control what I can in my personal IRA's (cash, tips, commodities) but for many of my peers we benefit from this CB pump in the corporate directed retirement. *At least on paper since we can't realistically use any of that cash until we are old and grey* **like some around here! j/k**

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Leftback
admin
November 21, 2014 at 5:14 PM ×

Yes, of course, as you know LB is a massive Treasury bull, so did indeed mean "bond bears will be frustrated". Not enough coffee...

Yes, Pol. Net long here, me old China. LB has 30% equity longs in the portfolio, but as we are value-driven investors, it's nearly all individual dividend-paying stocks, therefore currently it's mainly Europe and emerging markets, an occasional miner and a bit of US, of course that's all stodge like REITs, preferreds and T, VZ, MRK and BMY.

In general we don't do index ETFs, except for shorting and other occasional adventures in leveraged punting at sentiment extremes that might be intermediate "tops" and "bottoms". So we would be flat SPY, for example, as of today.

Marshall, some of us aren't that old, but we aged a few decades during 2006-2009...



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Leftback
admin
November 21, 2014 at 5:18 PM ×

CLF5 has given up the entire day's surge already and retraced below $76. We might get a re-test of the lows before the end of the year.

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Nico G
admin
November 21, 2014 at 5:38 PM ×

if you cover equity shorts on monthly/quarterly expiries when those extreme gamma conditions are used by bazooka merchants, Ali Baba IPOs to indeed squeeze your jalapeño balls you are doing exactly what they want you to do

add shorts on expiries, do not cover them

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Leftback
admin
November 21, 2014 at 5:44 PM ×

Next week is a holiday week, Nico, holding shorts would be merely more macho macro masochism, no?

Good things come to he/she who waits....

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Mr. T
admin
November 21, 2014 at 6:05 PM ×

I think the model for US equities now is very similar to whats happening at Apple, just a larger scale. They are buying $150million/day with enormous market impact. I don't believe they are going to let up on the holiday week, just the impact will be magnified with lower liquidity. If we apply the same dynamic to international flows all landing in US equity space, it sure sounds like a balls-in-the-blender short.

No thanks.

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Nico G
admin
November 21, 2014 at 6:10 PM ×

i am not telling anyone what to do i was telling what to NOT do on expiry days on a very short timeframe

on a longer timeframe they go from expiry to holiday to end of month to FOMC to holiday to CB speech to expiry etc

they desperately need relays - can they avoid a correction before end of year? qui vivra verra

meanwhile Europe is a further 3% away from spoos since last time we check, macrocho is doing fine

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Nico G
admin
November 21, 2014 at 6:12 PM ×

PS: spoos are the last 'market' to try to short - period

spoos is a religion

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CV
admin
November 21, 2014 at 6:13 PM ×

@Polemic

Am long, but not the right stuff ... so actually the last four months have been very frustrating.

My affinity for Eurozone banks is well publicised here, and it aint exactly going according to plan here! UK retail is well, UK retail(!) but I think this one will come through in the end, and some German tech which hasn't done anything at all.

EMs did well for me in the beginning of the year though, so all is not lost, yet ...

Claus

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Anonymous
admin
November 21, 2014 at 7:09 PM ×

5-30yr UST curve @ +140 . Thats the flattest since Dec 2008 as the world was cratering around you / banks failed , etc

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Leftback
admin
November 21, 2014 at 7:36 PM ×

Sweet. Brazil has gone into orbit on new fin min rumours. Not fun for any remaining shorts.... smirk

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Anonymous
admin
November 22, 2014 at 2:17 PM ×

NO LIQUIDITY IN THE NEXT CRISIS:

http://ftalphaville.ft.com/2014/11/21/2047922/the-liquidity-monster-that-awaits/?

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Polemic
admin
November 22, 2014 at 4:37 PM ×

Liquidity won t be an issue in the end. Worst case is the CBs just QE which ever type of junk bond is the one without the bid.

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Polemic
admin
November 22, 2014 at 4:43 PM ×

And uf lack of liquidity means that assets pass through their otherwise fair value levels due to money management/stop loss compulsory actions then it will be to the benefit of those that can take advantage and hoover it up at the expense of those employing managent rules that miss the wood for the trees. No bad thing. We end up with spikier markets with more opportunities. .

I m also going to introduce a new term. The trampoline rally. If you want to jump high you need to crouch low first. Or jump down on to a trampoline. Thats what oct stock fall looked like.

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Anonymous
admin
November 22, 2014 at 7:26 PM ×

I saw that article and my though was more along the lines that this will be the reason why Volker/DoddFrank get repealed - we live in a different financial world now where liquidity risks and shocks are well insulated by the fed. The fed would prefer to not be involved with these markets directly on a daily basis - wouldn't it just be much cleaner to let the banks make markets, take bigger bets, then only involve the fed when the banks need to reverse-repo some nasty assets?

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Anonymous
admin
November 23, 2014 at 5:53 PM ×

Didier Sornette: How we can predict the next financial crisis


http://www.youtube.com/watch?v=C_eFjLZqXt8

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Anonymous
admin
November 23, 2014 at 11:01 PM ×

Crouching Polemic, Hidden Trampoline.

Has a ring to it...

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Nico G
admin
November 24, 2014 at 5:12 AM ×

good. let me know where there ain't one bear left in this forum. Wait. you said now?

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Polemic
admin
November 24, 2014 at 11:26 AM ×

anon 11.01 -

Ha .. will use that as a strap line but will confuse the bejeezus out of every one.

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Anonymous
admin
November 24, 2014 at 2:43 PM ×

Draghi's inflation gauge has fallen off the cliff...


http://imgur.com/HBKFGU6

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Leftback
admin
November 24, 2014 at 6:44 PM ×

Bears always sleep during Thanksgiving week, Nico, but they are out there in the woods, just watching. On the day after Thanksgiving the market glade is quiet, with only a few very small but bold little animals scurrying about picking up tasty looking acorns and social media stocks for their winter store. A few Bears might creep out quietly and sniff around for some tasty scraps (hmm, VIX < 11?) to take back to the den.

Then on the Monday morning after Thanksgiving the Bears often come out in full force and devour unwary pigs, goats, lemmings and other small animals. Bulls? No, they will also be away for a few days, grazing other pastures and visiting Grandma.

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washedup
admin
November 24, 2014 at 7:07 PM ×

and i was sitting here thinking bears were herbivores - learn something new every day.
Think UST could have a WTF did that come from rally into yr end - mkts really short on that one. Not sure what catalyst, but maybe there isn't one required given abysmal liquidity.

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Mr. T
admin
November 24, 2014 at 8:35 PM ×

There might be bears out there in spirit but I seriously doubt you will see their mark in the market this year. I spent a good part of the weekend talking to old contacts. Probably a lot of bias here in the sample - mid-40's to early 50's, seen a lot of crap markets etc. But every single one was what I would call a 'reluctant long' - uncomfortable with multiple expansion, uncomfortable with outlook, well behind their benchmarks (irrespective of what that benchmark is). Overweight USD, long US beta, underweight FI. When the music is playing, you gotta dance.

On the bearish side its all still just hand waving nervousness about the western world's "transition to a centrally planned economy", "capital missallocation", multiple expansion, and DXY . Those themes and $2 will buy you a cup of coffee. You simply need more - a catalyst, a shock, something to differentiate this from your standard wall of worry. Noone is worried about earnings (stocks rally on misses anyways). Noone is worried about a tightening cycle, noone is worried about inflation or deflation. Honestly beyond a pervasive sense of unease, there is really nothing people can point to and say "this is why I'm out".

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Anonymous
admin
November 24, 2014 at 9:02 PM ×

What I can think of is politics. Maybe another government shutdown after 01/2015?

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Anonymous
admin
November 24, 2014 at 9:16 PM ×

Mr..T - what about Ukraine voting on NATO membership? It's the unforseen event or unintended consequences that could set the bulls free in the China shop. Complacency becomes the biggest issue.

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Mr. T
admin
November 24, 2014 at 9:19 PM ×

@Anon if you are saying govt shutdown is a bearish catalyst I have to disagree. Anything that gives CB's cover to continue their policy cannot be considered bearish. Govt paralysis has long been one of the benchmarks that allows fed to act unilaterally.

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Leftback
admin
November 24, 2014 at 9:20 PM ×

Very good summary and no arguments here, Mr T. MM has more or less outlined the case weeks ago for a Santa rally based on performance chasing and we can see the evidence in front of our eyes every day. So I think we all buy that logic, even if we don't want to buy more Spoos.

The Monday after Thanksgiving is statistically one of the worst days of the year for equities, that was my point. It wouldn't be a massive shock to see a bit of profit taking. The weaker sectors of the market, small caps and energy, continue to lag. It's a fascinating time period, one that will go down in market lore.

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Leftback
admin
November 24, 2014 at 9:21 PM ×

Agree. Govt shutdown meeting the fiscal cliff is what sired QE infinity !!!

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Anonymous
admin
November 24, 2014 at 9:37 PM ×

@T

Well maybe you are right.

Another issue I just remembered. ACA tax penalty...I read somewhere from tax people that a large number of small bisiness owners and lots of employees had no idea that their current insurance plans are illegal under ACA and when tax filing season comes, they would face huge penalties.


Just tossing out ideas here...

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November 24, 2014 at 9:39 PM ×

Good sense Mr.T on your words...
i'm really impressed by some FI markets recently... CB are losing their control on them..at least on the bearish side...
i'm talking for example about Canadian 10yr... on two numbers, unemployment rate much better than forecast and inflation much bigger we have seen LOWER 10yr rates...
something isn't working correctly...

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November 24, 2014 at 9:50 PM ×

Fundamentally there are only two asset class free to move, without a CB bid.... commodities and FX... and inflation expectations maybe...
Draghi told us that he needs to move quickly... please solve this: DBRI 1.5 2016 real yields: +0.3% BE inflation -0.35%... ahahah

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