What now?

So what happens now?

The US employment data confounded both the expectations of predictive models (such as, cough cough, that belonging to your author) and the fears of the marketplace, registering solidly on just about every front.  The reaction in some quarters of  the fixed income market was swift and substantial, with eurodollars notching their largest daily decline since the infamous "y'know, six months, that type of thing" press conference from Yellen last March.



On that occasion, the weakness was meant to be bought, as it was a clear overreaction to a misstatement from a new chairman.  This time around, the weakness has brought, say, EDZ5 to a level that has proved pivotal in the past.   On that basis alone, it might be tempting to buy a few or at least cover some cheeky shorts.

On the other hand, ED's and fixed income generally still looks really quite rich when viewed through a number of prisms.  Looking at calendar spreads, which tend to correlate reasonably well with direction, there'd appear to be more room to the downside.   The EDZ5/M6 spread, for example, currently discounts some 42 bps of rate rise in the six months (and 4 Fed meetings) between expiries.   That seems relatively modest if the Fed is indeed on the path to launching a tightening cycle later this year, and on the chart there appears to be another 10 ticks of downside, easily.  The good news is that Macro Man sold this spread last Thursday; the bad news is that he didn't sell nearly enough.



While Yellen has pooh-poohed the dots on a few occasions, they still serve a useful purpose in terms of illustrating where members of the Fed think rates ought to be (assuming a given forecast profile, natch.)  Let's suppose that only those in the bottom half of the distribution get to vote (which we know is not true, because Looney-Tune [and non-voter] Narayana Kocherlakota is quite obviously the low man on the totem poll, or at least the dot forecasts.)

If we take the average of these forecasts for the end of the next few years, what do we find?  They are all above the prevailing rate implied by Fed funds futures, in some cases dramatically so.



Now, there is of course no guarantee that the Fed will deliver as much as implied by the dot forecasts.   By the same token, there's also no guarantee that they deliver as little as implied by those forecasts, either; after all, monetary policy is a pretty inertial affair.   From Macro Man's perch, the asymmetric risk looks to be to the downside of these contracts/upside in yield.

That a few observers are throwing out sub 1% 10 year forecasts does little to dissuade him of that view.  That many erstwhile bears have apparently given up trying to short rates (natural selection is, after all, a powerful influence!), leaving the market to some degree in the hands of the "buy at any price" crowd, would suggest that prices have comfortably exceeded equilibrium.   Of course, disequilibria can persist for some time.  

For only the second time since Paul Volcker's infamous "Saturday Night Special", 10 year Treasury yields have traded below nominal GDP growth for an extended period.   The first of those, the infamous "conundrum", helped facilitate the housing and credit bubbles that are largely the reason that things suck for so many people these days. 



What's interesting to note is that even during that period, 10y yields at least had the decency to trend higher.   The same is also true of the 1950's -70's, when Treasury yields remained well below the level of nominal GDP growth.  In the current episode, however, yields have trended lower.  That the Fed has bought an amount that would even Dr. Evil blush is, of course, a major explanatory variable for this.

That the Fed is a) no longer buying, b) starting to contemplate a rise in short rates, and c) well and truly able to sell some of their holdings if they don't think markets reflect desired financial conditions does not yet seem to be reflected in the price.

Of course, oil is the elephant in the room, and to be sure it has put a severe dent in the level of headline CPI.  Then again, Fed models view it as a net stimulant (Macro Man is inclined to agree) which should push up the level of GDP.

There are people who think that the Fed will never be able to hike again.  Then again, there were people in 2009 who thought that stocks would never rally again, or that credit markets would never re-open again.  Trading is all about assessing the balance of probability.  From Macro Man's perch, current pricing provides an opportunity, with the prospect of a catalyst over the summer or early autumn (and a nearer-term catalyst when "patient" is dropped from the statement.)

Call him crazy, but he's sticking to his guns (and his positions.)
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49 comments

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JJ AUS
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February 9, 2015 at 7:18 AM ×

Brilliant love it. How do you view the chance that an equity sell off due to fed early hikes would trigger a bid in bonds?

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Anonymous
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February 9, 2015 at 9:30 AM ×

Angus said

And in the midst of all of this Merkel suddenly drops everything and heads off to sort out Ukraine. A ploy to let the Greeks know how weak their negotiating hand really is ? Or a signal that things with Russia are about to seriously escalate? If Moscow ups the rhetoric in the Baltics it hits that fault line where the EU, the €zone and NATO meet. Perhaps not quite the time to bail on UST's despite your point about rate hikes ?

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Nico G
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February 9, 2015 at 10:06 AM ×

Fed's hike, Ukraine, Greece etc same old same old dear funny money you've been warned for months at some point you'll end up banging your head singing 'why did i ever buy equities amid such known market risks'

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Anonymous
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February 9, 2015 at 10:06 AM ×

As far as equities are concerned it is at least moderately interesting that people seem way overweight bond-like sectors with a smidgeon of carry and underweight anything cyclical.

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theta
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February 9, 2015 at 12:08 PM ×

Nico,
The TINA argument still holds though. What are you going to buy? Bonds with negative yields? Real estate? Or stay in cash (also with negative yields)?

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Leftback
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February 9, 2015 at 2:49 PM ×

The consequences of making an example of Greece would be analogous to the Lehman bankruptcy. The German conservatives should be careful what they wish for. It was a timely moment for Russia to remind Ze Germans that their wartime reparations were forgiven and they were guilty of far more than the Greeks.

Merkel has finally seen the warning signs regarding Ukraine, as she realizes that Obama really might go along with the neocon cretins at State and arm the tinpot Nazis in Kiev, thereby igniting a new Vietnam-style cold war conflict.

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Anonymous
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February 9, 2015 at 3:42 PM ×

Given what has transpired in Ukraine in the last year, I find your comment "tinpot Nazis in Kiev" distasteful Leftback. Have you turned into a Putin's shill? Very strange...

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Bruce in Tennessee
admin
February 9, 2015 at 3:52 PM ×

Well I don't know why I came here tonight,
I got the feeling that something ain't right,
I'm so scared in case I fall off my chair,
And I'm wondering how I'll get down the stairs,
Clowns to the left of me,
Jokers to the right, here I am,
Stuck in the middle with you.

Yes I'm stuck in the middle with you,
And I'm wondering what it is I should do,
It's so hard to keep this smile from my face,
Losing control, yeah, I'm all over the place,
Clowns to the left of me, Jokers to the right,
Here I am, stuck in the middle with you.

Well you started out with nothing,
And you're proud that you're a self made man,
And your friends, they all come crawlin,
Slap you on the back and say,
Please.... Please.....

...What are you going to buy, theta? Good question. I think I agree with Lefty here, once again, that being b'rer rabbit (He just 'lay low) might get you in less trouble than b'rer fox, whose nature got him all tangled up with tar baby...

...I think Lefty's point also about Ukraine is that these bubbas, ummmm, were not the one first elected, right?

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abee crombie
admin
February 9, 2015 at 4:08 PM ×

Cheers MM, I always appreciate the insights on the short end, as it used to be a great market to trade. Seems to me if this months report was in December, the market would be much lower, but instead ppl are still doubting the change in hourly earnings etc.

Not much follow through on rate today either has me scratching my head. This is not really a trending market yet so I guess you have to pick your spots. Perhaps I need to look at the calendar spreads as you suggested. All other markets seemed to greet NFP with a big yawn, but I think they are missing something. Be careful REIT and Utility investors, they gave a warning signal already

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Anonymous
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February 9, 2015 at 4:15 PM ×

LB - the neocons risk this becoming a Vietnam style war? I suppose Putin is blameless in all this too. Did he not arm the Syrian government fighting/murdering rebels/civilians who challenged Assad's authority and territory? Did he not invade Georgia and now Ukraine? Has he not repeatedly rebuffed Obama and the US State Dept over cooperation and reciprocation after the Russian 'reset' begun in 09?

I guess youre giving Russia the Unilateral Pass to invade sovereign countries since 1) they aren't the USofA and 2) this is some kind of anomaly and by no means historical precedent in the long history of Russia's relations with her neighbors.

Unfortunately when Ukraine disarmed its nukes it got security guarantees from both the EU and US that need to be honored. These things are inconvenient but not things you can ignore either.

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Singman
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February 9, 2015 at 4:21 PM ×

What is worse? A grexit, which potentially is a blow to all euro skeptic parties in Spain/ Italy or giving in to Greece and disrupting the entire system when podemos comes to power in Spain and asks for a debt restructuring?

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Mr. T
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February 9, 2015 at 4:30 PM ×

The consequences of making an example of Greece would be analogous to the Lehman bankruptcy.

I think this is accurate, and if Lehman is Greece and Italy is AIG and Spain is Fannie they will all be doing really well once they cut out from the EU. A shock is likley, but if you are looking out more than an election it's hard to see how the PIIGS would be doing worse on their own.

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Leftback
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February 9, 2015 at 7:03 PM ×

Anons, (they are always anions, aren't they?)

I could go on at great length with a history lesson of Ukraine. However, one suggestion is that you might consider looking beyond ABC, CBS, NBC, WaPo, NYT and Faux News propaganda for information on Ukraine. Starting with the BBC, Le Monde. Frankfürter Allgemeine, etc.. you will receive a more nuanced view of the situation.

There is a very long and strong history of Nazi-like groups in Galicia (Western Ukraine, home of the odious banker-PM Yatsenyuk) that is undeniable. Look up Stepan Bandera, and then read up on the Azov brigade, investigated by the (ooooh radical) BBC, and clearly fighting for Kiev. The puppet regime isn't a thing of beauty.

No-one is saying (here at least) that Putin is Mother Teresa, but you can see that his actions are predictable and usually provoked by attacks on the interests of ethnic Russians. On the topic of ethics, your dear President Obama kills little children in Pakistan on a monthly basis via drone attacks, and he is neither FDR nor MLK, in fact both liberals and black Americans privately despise him. As for the neocons at State, they exist to drag Americans into dark and dirty wars in far-away lands and they are the true enemies of all free people everywhere.

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Leftback
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February 9, 2015 at 7:11 PM ×

Now, returning to the markets, we concur with MM that US fixed income is currently over-priced, as there is clearly a non-zero probability of:

1) A "Grollover" or "Grextension" agreement.
2) Sanity prevailing in the arena of Ukraine.
3) Gradual improvement in the EZ economies.

As MM pointed out, the only new buyers of USTs left out there may be those who would buy at any price... past experience has taught us that 999 times out of 1000, the world doesn't end and the sun does actually rise in the morning, (the other time you have an especially bad hangover).

Still would rather be long Stoxx than Spoos. US profits for Q1 are going to be hit by the strong dollar and if you listen, the jawboning about USD has already started from the C suites of America,

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Leftback
admin
February 9, 2015 at 7:13 PM ×

Finally, what happened to all the $20/bbl oil loonies???.... (Just asking) :-)

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Anonymous
admin
February 9, 2015 at 7:54 PM ×

Q115 Estimated earning growth rate looks downright awful...

http://imgur.com/auW7Gxw

Looks like the Fed is planning it's move to take control of the cryptocurrency markets...

http://www.finextra.com/news/fullstory.aspx?newsitemid=26980

Companies such as Ripple Labs and Stellar will be boarded up and shut down by the US government.

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hipper
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February 9, 2015 at 7:55 PM ×

re: Ukraine,

I think for Russia it's kind of the same as Cuba crisis was for US so from that point of view the reactions could be somewhat understandable.

But that said I think really a lot is related to Putin and as a consequence to internal politics (I know I know, everything in the world is already pinned on him but there might be some truth to it really). The issue is Putin is still too young to retire, there's a good chance he would lose most of his property when that happens along his friends. The Russian leadership system inside the Kremlin walls is just purely brutal. The people don't choose their leader, the inner circle does. So what you see as Russian "foreign policy" is in fact internal politics being practiced which is deemed to contribute to Putin staying in power.

First there was the strong economic rise after SU collapse and implementation of the market economy, which boomed foreign investment.

After that it started leveling off and when things started going a bit downhill on economic side, he turned to the Orthodox church for a "divine legitimacy", the creation of the "Third Rome", named after Rome and Constantinople and paint western countries as "barbaric demons" which are trying to destroy Russia and rob their wealth, natural resources etc.

The latest phase is just a continuum of these internal affairs presenting itself in the form of old SU expansionist policy, winning support by waking up the old spirit of imperialism and a feeling of invincibility etc.

IMHO the Ukraine crisis is going to be with us until it ends with the "separatists" taking over or break up of the west and east. But quite unlikely there is going to be a "peace" which leaves it unresolved in that sense.

For those interested:

http://www.newsweek.com/putins-god-squad-orthodox-church-and-russian-politics-64649

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Leftback
admin
February 9, 2015 at 8:18 PM ×

Very good, hipper. Thanks. A DMZ buffer zone (Korea solution) seems preferable to the Vietnam version of events. Before I leave the topic, fans of US intervention in Yookraine need to consider the following fact before proceeding: YOU ARE GOING TO BE JOINING JOHN McCAIN, WHO IS A NUT JOB.

Btw, my perch politically speaking is on the left, (or what used to be called the left, when there was one), and certainly far to the left of ersatz liberals like Obama, who is actually precisely the neocon Manchurian candidate that many predicted in 2008. But you should know that many on the conservative and libertarian right do seem to share my views on Ukraine. Here the Cato Institute, who present a strongly argued case that America has no business there and it would be moronic to intervene:

Cato Institute on Ukraine

Here is another gem from the same source on Obama's tax proposals:

Obama's Tax Plans

The best line is "The only winning class in society would be the tax accountants"...

Just go. Obama, you are terrible, just go away and play HORSE for two years and don't bother anyone.

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Leftback
admin
February 9, 2015 at 8:39 PM ×

Finally to the scolding Anon:

"Has he not repeatedly rebuffed Obama and the US State Dept over cooperation and reciprocation after the Russian 'reset' begun in 09?"

We would all be wise to reject policy initiatives from the US State Dept, which has hatched more evil in this world than you might believe. As for rebuffing Obama, who wouldn't? Whatever your politics, this administration is inept, ineffective and inert. It is a bad joke, and African-Americans and liberals alike are deeply ashamed of this Presidency, its lack of respect for the rule of law and the constitution, and its deep and loving embrace of corporate America.

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Anonymous
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February 9, 2015 at 9:18 PM ×

Sarkozy, Hollande and even Kissinger (!) all agree:

Sarkozy on Crimea

The sooner we get rid of John Kerry, Victoria ("fuck the EU") Nuland and install some real diplomats (oh, yes and you can take those 17 year-old spokespeople with you!), the better...

[Checks for black helicopters]

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Anonymous
admin
February 9, 2015 at 9:29 PM ×

$20 oil? Here you go....
< http://www.bloomberg.com/news/articles/2015-02-09/citi-oil-could-plunge-to-20-and-this-might-be-the-end-of-opec->

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Anonymous
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February 9, 2015 at 9:44 PM ×

Leftback said...
I could go on at great length with a history lesson of Ukraine.

I suggest you don't before you hurt yourself.

Last thing I want to do is get into a political argument on this fine macro forum, but as I said your comments on "the tinpot Nazis in Kiev" are offensive and show, as you put it, not so"nuanced view of the situation."
No one here is defending FOX, Neocons, or whatever else you have issues with.
Simple facts:
Ukraine is a sovereign nation last time I looked on the map.
It's been partitioned by Russia and now invaded.
Same arguments of protecting Russians living abroad were used in 1939 before start of II World War when Russia invaded Poland from the East.
As per Wiki: "The Soviet government announced it was acting to protect the Ukrainians and Belarusians who lived in the eastern part of Poland, because the Polish state – according to Soviet propaganda – had collapsed in the face of the Nazi German attack and could no longer guarantee the security of its own citizens."

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Anonymous
admin
February 9, 2015 at 10:25 PM ×

U.S. Crude Supply Rose 3.5M Bbl Last Week in Bloomberg Survey ( would get us to almost 417mm Bbl ...new 80yr high

U.S. Major Shale Play Oil Output to Grow 68k B/d in March: EIA

Maybe it will make it to $10

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Anonymous
admin
February 9, 2015 at 10:36 PM ×

Citi cuts its oil forecast: “Recent rally in crude prices looks more like a head-fake than sustainable turning point”

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Anonymous
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February 10, 2015 at 2:51 AM ×



February 9, 2015 at 9:44 Anonymous

Hey, Fool, this is an economics blog. STFU and let's read what Leftback has to say.

You could always enlist.

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Leftback
admin
February 10, 2015 at 4:36 AM ×

Well, well, oil prices are a fascinating topic. It all really depends on whether one thinks they are a function of supply and demand or a bizarre trading playground for leveraged currency speculators. That's the thing that makes gold and oil different from lumber, see, some people do treat them as alternative currencies.

My last word to Anon @ 9:44, sadly, if you really do fail to understand even the most simple aspects of WW2, there isn't much point in conversing with you.

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Nico G
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February 10, 2015 at 5:58 AM ×

theta

indeed, when most assets seem overpriced invest in NOTHING but a personal business if you have a good idea, or loan some cash on a peer to peer basis

there is nothing wrong with cash hell, there is no inflation or is it. As a reminder you certainly looked like a fool if you were not invested in anything internet by the end of 1999 but hey, oh a pretty cool 'dip' came soon after

Ukraine is one horrid conflict and a giant example of unintended consequences in the making. Last night some photos of the MH17 plane victims appeared on the screen which helped me to wake the fuck up on how atrocious that war is

Ukraine was doomed the moment some Europeans like GERMANS opposed its NATO membership years ago. You bet Merkel must feel sorry today you know, we did not want to have to defend you because we bloody well knew you would be attacked by Russia some day

what an awful farce. You need to know that 60% of German politicians are on Russia payroll. there.

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Hotairmail
admin
February 10, 2015 at 9:52 AM ×

Excellent post. Not just because of the analysis but perhaps the near-perfect timing (tbc).

I had been watching the 10 year myself as it extended into something of a mini blow off top. But is this 'it'?

All we need to worry about now is the global deflationary black hole that is China.

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Napoleon
admin
February 10, 2015 at 11:08 AM ×

Giving Ukraine nato membership would have been considered a provocation and rightly so - an organisation created to be hostile towards Russia on its western border where it has often been threatened before. In addition the U.S. wanted to build missile sites in poland. If the same was happening in, say Mexico or ahem Cuba...

There is a long history in this region preceding the current crisis. My only thought is where the upside for Russia remains for continuing this conflict after annexing the strategically significant Crimea? Perhaps it's saving face, which is coming at a high price.

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Leftback
admin
February 10, 2015 at 1:17 PM ×

Morning all. Sorry about the extended politics last night, but it isn't a bad idea for someone to challenge the conventional "wisdom" once in a while.

Favorite morning headline on BBC: Strauss-Kahn: Orgies were rare. Beautiful, don't you think?

Only 12 Sex Parties

Only 12, the poor old lad. Deprivation...

Now, fast forward to this morning, and we hear that Europe is going to blink (surprise!) after Greece had suggested turning to Russia (boo, hiss....) or China for love, all playing out very much as Polemic had outlined here last week. Along with that we see an unwind in the fear trades including selling of US long bonds, so nice call, MM.

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FunnyMoney
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February 10, 2015 at 1:44 PM ×

Just a quick comment as a few people have referenced me in their recent posting, warning of downside in equities due to Greek/geopolitical risks...

Let me state this definitively:
THERE IS NO DOWNSIDE IN BUYING EQUITIES - the Central Banks have your back x100.

If there is a Grexit: The ECB (supported by the Fed, BoJ and PBoC) will inject unlimted amounts of liquidity. Similarly for any other major dislocation.

Folks, I hate to sound like a broken record but the situation is this simple. I think for intelligent institutional investors this is hard to fathom: i.e. surely Govts/CBs can't be this stupid? Yes, they can - and they are.

I continue to aggressively buy every dip in EU/US (and some Japanese) equities.

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checkmate
admin
February 10, 2015 at 1:45 PM ×

Unfortunately LB you are not really "challenging conventional wisdom" anymore than the Anon was who took up the other view on the issue. What you both were doing is something I have seen in most major conflict issues. That is your efforts were directed at attempting to apportion blame based up on some form of historical analysis that you had built a rational for.

Unfortunately, resolving conflicts doesn't even begin until these approaches are dropped and effort focuses no on where the parties think they have come from ,but where they wish to be in future. Raking over 'old ashes' effectively prevents such a focus.

It's a rare conflict that can really be analysed in a way that finds one party blameless and the other guilty on all charges. The reality is usually a lot more sublime than that. However, 'reality' tends to be absent until parties start/are forced to become more objective about their goals and what they want to achieve.
Apportioning blame has to be put to oneside for that to happen.

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checkmate
admin
February 10, 2015 at 1:48 PM ×

FM,
The fact there is dissent should warm your cockles. Without any your opportunities would be limited. Who eventually is right I don't know ,but at this time given I am using volatility to buy risk in the same places then we sing from the same hymn book.

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River
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February 10, 2015 at 1:52 PM ×

For some it may be a lame comment:

http://stockcharts.com/h-sc/ui?s=$tnx&p=D&b=5&g=0&id=p41298869661

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River
admin
February 10, 2015 at 1:56 PM ×

@Checkmate(1:45)

That's brilliant,Sir.

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Anonymous
admin
February 10, 2015 at 3:43 PM ×

LB you like China and India here? The chop in EM has been horrendous from a trend point of view.

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Anonymous
admin
February 10, 2015 at 4:11 PM ×

China CPI fell to a 5yr low in Jan coming in at 0.8%.

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Leftback
admin
February 10, 2015 at 7:13 PM ×

C, you're lucid, as always, but wrong. My argument about the US proceeding along the path of its Vietnam involvement, as stated to the Europeans by Russia, reported here by the BBC:

http://www.bbc.com/news/world-europe-31356372

Look, sometimes there is a really evil entity out there doing bad things, like ISIL. Unfortunately, we sometimes have to admit that the evil entity is closer to home. It took a long time for people to see Vietnam for what it was, a stupid pointless and ultimately losing exercise. In Ukraine it should be screamingly obvious, given the lessons of history.

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Bruce in Tennessee
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February 10, 2015 at 7:35 PM ×

http://www.washingtonpost.com/blogs/worldviews/wp/2013/12/09/this-one-map-helps-explain-ukraines-protests/

Lefty,

Once again I find myself agreeing with you. Maybe it just shows I'm simple. But maybe some of your compatriots didn't read articles like these that explained much of why there can be a civil war in Ukraine in the first place. I suspect these boys will get the Cyprus treatment unless Obama issues an executive order. Anyway, verbal political disagreement seldom gets settled...

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Mr. T
admin
February 10, 2015 at 7:41 PM ×

Markets seem to be placing way too much weight on Greece, again. The high probability course is can kicking and an acknowledgment by Germany that throwing good money after bad is in fact a good investment for them, with face saving by Greek politicians who extracted something from the Germans without actually changing the long term dynamics. The other possibilites seem so distant that they are not really worth discussing. One mention of having the German economy franc-ified will make the $11bil or whatever look like chump change.

So if this is yet another TWINE setup, is the time right for a EU risk-on trade? I'm thinking long EUR, short bunds, long estx.

Also, this move in US rates looks like the real deal. Breakevens are moving higher, FF futures are converging with the fed talk. I don't think we would need too much to get the USGG30YR north of 300.

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Anonymous
admin
February 10, 2015 at 8:06 PM ×

Is checkmate the commenter formerly known as "C"? Can't tell the commenters without a program....

- Whammer

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FunnyMoney
admin
February 10, 2015 at 8:34 PM ×

@checkmate - Yes you're probably right regarding dissent providing opportunities. So buying Dax, Nasdaq & Nikkei today have netted about +2% +1.4% & +1.5% respectively. Not bad for a day's work.

US equity indexes will be making new all time highs by the end of the week, with Eu equities not far behind. This really is like shooting fish in a barrel.

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Mr. T
admin
February 10, 2015 at 10:31 PM ×

This really is like shooting fish in a barrel.

FunnyMoney, whats the point? I recognize that there are people here from lots of different environments, are you missing this? Do you think that my risk officer is going to go along with a "200% long equities because FunnyMoney told me to" strategy?

I think you can make your point that there is no real risk in holding equities and that the Greenspan put has morphed into a much larger CB put without being so caustic. Understand that not everyone here has unlimited risk budgets, and trade ideas sometimes need to be a little more thought out than simply saying "its like shooting fish in a barrel".

Also, maybe it's not so much about being RIGHT all the time here as it is putting your ideas out there for anonymous people to objectively weigh in on them?

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hipper
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February 11, 2015 at 1:29 AM ×

Mr. T, exactly to the point. Anyone can toss around vague ideas like "spooz and dax are going to the moon because Janet and Draghi got your back". Basically there's an infinite supply of these comments. And basically if something is supplied to infinity, the theory of supply and demand tells us it's pretty much worthless.

Why? Because they are easy to make, don't require depth, research, examination, historical references, comparison, seeking correlations etc. Funnymoney may be right or wrong, but that's irrelevant. I gratefully appreciate this blog and the author for the depth and context it provides on generally what is, or might be going on and the ideas I never would've thought by myself. To me it isn't about "absolute" answers in investment terms (and isn't probably intended to be) but general discussion for exchanging ideas.

Funnymoney as a name to me implies (and perhaps is even intended to) literally just that: all the funny money tossed around as a result of impulsive reactions influenced mainly by 5-minute macro news. Now this is not to say I disagree with Funnymoney. To me there are a lot of reasons to like equities right now, and as a scandinavian I am naturally long with a bunch of local firms I deem to have good business models, balance sheets and cash flows (especially in context of soon to come NIRP environments), a bunch of other hand picked large, mid and small caps and USD, most of which has been built over a long period of time. My personal goal is not so much to be absolutely correct on a weekly or other short time period, but to seek out the possible long term fundamental losers and avoid that minefield early enough. Then other times I may try some small short term trading ideas, which I get ideas for example from this blog and the discussion.

But I guess the point is, when making absolute claims on something it would be much better to provide some arguments too, because it makes the ideas worth much more, understandable and probably most importantly, discussable. Which repeating historical facts and making future guesstimates without any kind of substance does not.

Sorry for the OT rant...

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checkmate
admin
February 11, 2015 at 9:33 AM ×

"Is checkmate the commenter formerly known as "C"? Can't tell the commenters without a program...."

Yes, that is correct. I had thought to make a more charismatic change ,for example 'C Fernandez-Ortega-Dominguez' ,but it's been so done !

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checkmate
admin
February 11, 2015 at 9:46 AM ×

LB,
I wasn't really referring to your comments on the US re Ukraine. The US has it's foreign policies and they exist to perpetuate US self interest (as defined by State) as opposed to any notion that they are a shining beacon of 'we are right in the eyes of god so let our sword swing true'. That was bollocks 50 years ago and remains the same today saleable only to those who have decided not to think.

No ,I was zeroing in on attempts to cast an analysis of the Ukraine situation as being possible by assigning causality to either Russian ,or EU (German) actions. In effect I was saying there are no whiter than white parties here ,you know actions and reactions (reflexivity a la Soros). Moreover I was making the point that assigning blame in any case is usually fruitless if all one is trying to do is to move the situation to a resolution. Of course , re the US state, they probably don't want a resolution in the way the ordinary person walking about in the Ukraine wants one. Indeed, our own govt isn't much better. Reading Hammond yesterday all I could say is 'not in my name fuckwit'.

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Anonymous
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February 11, 2015 at 9:53 AM ×

LB - Don't lecture us on WW2 as I've probably read as many books, if not more, than you have and my grandfather was in recon and could speak in German to the Wehrmacht and local population. Perhaps we can discuss that 'unsordid' act the Marshall Plan when America monopolized the bomb and compare/contrast the implications thereof to the Molotov-Ribbentrop Pact?

Anyway nobody is advocating Vietnam, Iraq, or a Korea in the US that I know or have read of. If you have pls send URL (not ZH pls). Arming the army of a sovereign nation is no different than Russia in Syria. I realize Ukraine is where it is due primarily to its own doing. People talk about corruption in Russia but never that in Ukraine like Yulia's billions.

On markets, US fixed income has traded heavy, even after payrolls so could be sell on rallies or go short against longs elsewhere, perhaps Oz. I'm a bit worried about UK vs US, I've heard the trade idea from too many people and just looks too obvious for me. In stawwcks think you want to be defensive in stuff like staples and utilities. I haven't been an eco permabear like Mr LB (of course markets and eco can move differently), but I do think this recovery getting long in tooth. And I worry a lot like Dalio about what ammunition there is next recession or financial crisis. Years ago had you asked me about deflation I thought it was overdone and unlikely with ZIRP/QE but I think all that stimulus and it's still lingering and it's clearly an issue to worry about.

Best of luck out there

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lee woo
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February 14, 2015 at 6:19 AM ×

We are what we repeatedly do. Excellence, then, is not an act, but a habit. See the link below for more info.


#repeatedly
www.ufgop.org

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joy
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February 23, 2015 at 7:10 AM ×

Life is like a battle, if you don't know how to defense yourself then you'll end up being a loser. So better take any challenges as your stepping stone to become a better person. Have fun, explore and make a lot of memories.

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www.n8fan.net

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