Project Fear...or a fearful projection?

Today's post is necessarily short as Macro Man was out last night at a reunion of a two decades old group of friends.  One of the criticisms leveled at the Remain campaign in the Brexit vote was the so-called Project Fear: the dire warnings of the economic (and other) consequences of a Leave vote peddled by key Remain supporters, including David Cameron.

Some of this criticism is completely justified- the warnings of a potential war were little short of the worst type of scurrilous scare-mongering.   But what of the concerns over the economic consequences?   While the long-term impact of a Brexit (if indeed if happens) will play out over the...er...long term, it seems likely that there will be a short run impact as well thanks to the uncertainty created by the power vacuum after Cameron's resignation and the opacity of how any negotiations will operate.

Real world operators, much like their market counterparts, hate uncertainty, and tend to pull in the reins accordingly.   There have already been anecdotal reports of some types of activity (construction projects, for example) being grounded already; if this type of behaviour is widespread, it seems likely that the market (or at least some observers) are under-estimating the hit to the UK economy in the coming months.

Of course, by the same token these anecdotes could just be cherry-picked stories from people disgusted by the referendum outcome and desirous of being proven "correct".  The tale of the tape will be found in the data.   Given how late the referendum occurred in June, it is far from certain that the impact will show up in the very near term.   Here are a few of the dates and data points that Macro Man will be keying on to get a handle of whether the growth concerns are simply a residue of Project Fear...or a legitimate projection of a fearful outcome.

- June 29th/30th- Gfk consumer confidence for June- may be too early to see an impact

- July 1- Markit manufacturing PMI (ditto)

- July 4- Construction PMI (particularly interesting in light of the anecdote cited above)

- July 5- Services PMI

- July 18- Rightmove house prices for July (sketchy data, but should see an impact here if there is one)

- July 20 - Employment data (again, possibly too early to see an impact)

- July 21 - Retail sales (more June data)

- July 21-26 CBI Industrial trends (should definitely see an impact here if there is one)

- July 24 - 28 CBI distributive trades (will offer a read on post-Brexit vote retail climate)

- July 28 Nationwide house price index for July

- July 28/29 Gfk again

...and then the data cycle for July starts in earnest come early August with the PMIs etc.

Suffice to say that it will be particularly important when analyzing the data to know whether it was compiled before or after the vote; by mid-August, we'll have a very good picture of the post-referendum economic climate in Britain...as will the contenders for the Tory leadership.
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Anonymous
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June 29, 2016 at 7:17 AM ×

Super Tanker Capital -

You're right MM. The hit to the UK economy is likely to be visible and painful by the time we get to the Q4 figures. Guesstimate at this mornings analyst meeting -2.5% in 2017, -1% 2018. A full -6% from trend by end of decade.

A Scots consultant guy I hadn't seen since SNC days spoke about the battle between the European Council and the Commission over negotiating with the UK on Brexit or Breturn. Tusk and the Council want a moderate approach. Juncker , driven on by his deputy, the virulently anti- UK and anti- US Martin Stelmayr, wants the Brits to be made an example of. If the Commission wins the battle then to 2018 forecast doesn't begin to reflect the turmoil.

As for Cameron and War think you're being uncharacteristically unkind- What he actually said was :

The truth is this: what happens in our neighbourhood matters to Britain.
That was true in 1914, in 1940 and in 1989. Or, you could add 1588, 1704 and 1815. And it is just as true in 2016.Either we influence Europe, or it influences us.
And if things go wrong in Europe, let’s not pretend we can be immune from the consequences.”

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Anonymous
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June 29, 2016 at 7:32 AM ×

Forget fear, Central Banks continue to bid this market through the Asian session into the EU session. Nikkei, Eurostoxx etc heavily bid. Still laugh at how blind so many "professionals" are to the realities of these markets. Get short guys so we can buy your margin liquidations. Thanks so much! Hahaha

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CV
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June 29, 2016 at 7:36 AM ×

Great post MM, we're in a post/pre Brexit data-world now. Must surveys are conducted in the first 2-3 weeks of the month, so Brexit will be absent in much of the June data. Incidentally, the Sentix on Monday, though, will give us a picture of the hit to investor sentiment, and it will be worthwhile comparing to the debt ceiling chaos in 2011, Fukushima etc.

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Rossco
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June 29, 2016 at 7:44 AM ×

I for see a re-ramping of emerging markets money into the UK property market as Sterling offers them an an effective c10% discount. Retail Sales already look to be positively affected as GBP priced inventory is cleared to foreigners. UK listed miners receive $ for their current projects.... so... all in all it looks like there will be some tradeable opportunities.

I fail to see the case for a collapse in City of London business.

Taking the other side of a multi-decade event in Sterling seems like a reasonable trade to me

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Polemic
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June 29, 2016 at 8:13 AM ×

Much of the concern I hear about is based on circular arguments that thing will be bad because things will be bad.
Question is.. does uncertainty just delay or does uncertainty cancel purchases. Investment much more likely to be put on hold but ultimately if the transactional economy of day to day life carries on profitably then the opportunities for investment will remain and temptation won t hold investors back forever.

Assumptions on house prices, pensions (i laugh at the pensions argument) and GDP are all indeed assumptions that feed the fear. The Pol household have not changed any of their buying behaviour and do not know anyone who has ( ok I know this isn t big industry but industry responds to the people at the bottom at the end of the chain).

I don t actually see a hit to the econ until or more importantly 'if' jobs are lost.

On jobs... accountants and lawyers.. kabooomm it's Christmas! But try investing in them! Bloody LLPs..

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Polemic
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June 29, 2016 at 8:13 AM ×

Much of the concern I hear about is based on circular arguments that thing will be bad because things will be bad.
Question is.. does uncertainty just delay or does uncertainty cancel purchases. Investment much more likely to be put on hold but ultimately if the transactional economy of day to day life carries on profitably then the opportunities for investment will remain and temptation won t hold investors back forever.

Assumptions on house prices, pensions (i laugh at the pensions argument) and GDP are all indeed assumptions that feed the fear. The Pol household have not changed any of their buying behaviour and do not know anyone who has ( ok I know this isn t big industry but industry responds to the people at the bottom at the end of the chain).

I don t actually see a hit to the econ until or more importantly 'if' jobs are lost.

On jobs... accountants and lawyers.. kabooomm it's Christmas! But try investing in them! Bloody LLPs..

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Anonymous
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June 29, 2016 at 8:24 AM ×

Odd thing is, if UK does not suffer significant adverse consequences (Ie markets do not go more boom, growth only slightly dented) does this not give other leave movements in other eu countries more ammo ?

the true risk is political contagion leading to breakup of eu, I wonder if things remain ok now this actually increases risks down the line

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Anonymous
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June 29, 2016 at 8:29 AM ×

I think it may take 3 months to see any real impact, don't forget UK exporters should me making hay due to the weaker pound.

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Anonymous
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June 29, 2016 at 8:42 AM ×

trust me, there will be adverse consequences. not something recessionary but clearly it has a significant impact

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Anonymous
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June 29, 2016 at 9:10 AM ×

To the bearish brigade, as Pol said, the argument that "things will be bad because things will be bad" is rubbish. It's not even a given that Brexit will happen, if it does A50 will take 2 years, and then further legal/operational changes another 3 years. Even if Brexit happens, the UK will keep trade agreements open with Europe along the lines of Norway, Switzerland or Iceland. Before you all think the City will offshore to Europe, do remember the FTT (tobin tax) that Europe is rolling out. That will destroy financial centres in Europe.

No the UK economy will adjust, property prices will fall in real terms (a good thing), UK exports will be come more competitive due to a lower £ (a good thing, bad for Europe), UK imports will fall (a good thing, bad for Europe), UK balance of payments will improve, and due to trade budget re-balancing and some rise in inflation UK debt levels will reduce (a good thing). Meanwhile the EU will stumble from crisis to crisis until nationalism becomes extreme and conflict breaks out. The UK will be a safe haven.

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abee crombie
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June 29, 2016 at 9:11 AM ×

Thanks mm. I was thinking the same for us ISM, which is arguably 10x more
important for global financial markets. Also what data do we need to see to get db and cs, moving again [up or down, bc at some point l/s equity/coco becomes trade ]. Bc frankly that is the problem...ftse stocks barely moved. No one cares what happens in UK, only outside ( says the market )

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abee crombie
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June 29, 2016 at 9:12 AM ×

Thanks mm. I was thinking the same for us ISM, which is arguably 10x more
important for global financial markets. Also what data do we need to see to get db and cs, moving again [up or down, bc at some point l/s equity/coco becomes trade ]. Bc frankly that is the problem...ftse stocks barely moved. No one cares what happens in UK, only outside ( says the market )

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Anonymous
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June 29, 2016 at 9:47 AM ×

Let's just hope you are better at assessing strenght of england's economy that england football team's one.
Every 2 years you think you have a chance to win the trophy while anybody with knowledge of football know you have none from the start.
I guess it's not only french who are pretentious without reason

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Anonymous
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June 29, 2016 at 9:53 AM ×

I confidently predict that things will neither be as good or as bad as forecast!

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Hotairmail
admin
June 29, 2016 at 10:20 AM ×

It seems to me the result has been met with an incredible out pouring of grief by many. Such a hit to 'sentiment' will take a while to settle.

The surprise of the result and preposterous fears amongst many that we wouldn't be trading with Europe, wouldn't be working in Europe and wouldn't be travelling to Europe means a lot of people will have a slowly dawning pleasant surprise at some point.

It won't be as bad as feared by many, but in this vacuum I fear the message will not get out there to calm nerves for some while. So, we can expect a slowdown on the one hand and a boost to tradables due to Sterling on the other. The boost to FTSE100 profits will be significant too which make it attractive especially if you are in other currencies.

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Unknown
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June 29, 2016 at 10:46 AM ×

@pol
Imagine you are a manufacturer that needs to build a factory in Europe and you were considering the UK. You have 3 options:
1. Build it and hope that things will work out.
2. Wait until after a new PM is elected and we have more clarity on what happens next.
3. Build it somewhere else.
Do you think option 3 is unreasonable?

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Justabeancounter
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June 29, 2016 at 11:10 AM ×

It's now become a game of chicken (in fact I think it always has been but I'm not entirely convinced the powers that be realised this), no-one wants to swerve first or indeed can afford to swerve first. Who will hold their nerve? That will be most interesting. As long as the Brexiters stay the course and continue to thumb their noses at Brussells they'll do ok. The correct response now is 'tariffs? Bring them on, we can compete blah blah' and slap on equivalents. They need to keep the perception of strength, as soon as they are perceived to be coming from a position of weakness, such as trying to secure the so called 'Norway' option, they are farked - hopefully the muppets in the Tories realise this.

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Polemic
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June 29, 2016 at 11:21 AM ×

unknown .. i agree, if i was a manufacturer and if i was going to build a plant somewhere in europe to only supply europe (though why I would chose to build it in europe at all would be a good question if its skills lead then skills are different from regs and tariffs) then I would first wait. I certainly wouldn't immediately build it somewhere else in case I am later kicking myself for missing out on a high skill, low reg. currency competitive place next door. SO I would wait.

But .. how much of our economy is currently based on this queue of manufacturers wanting to build factories in the UK? tiny.

Once again loads of 'ifs' being used to discount immediate calamity.

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Anonymous
admin
June 29, 2016 at 11:23 AM ×

If the EU pushes the UK out of the common market, the UK should:
1) Leave NATO
2) Impose MASSIVE tarriffs on all EU goods, and cut ALL tarriffs on non-EU goods
3) Cut corporation tax to 0% and watch every multinational relocate to the UK
See how the EU get on with that...

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Anonymous
admin
June 29, 2016 at 11:45 AM ×

FTSE100 has erased nearly all the Brexit fall. The market is showing that the bears are wrong (again). Buy equity indexes hand over fist while you still have the chance, policy makers will never let them fall by a significant amount, any fall is a buying opportunity.

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Anonymous
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June 29, 2016 at 11:45 AM ×

UK is like the guy leaving the rave before the cops show up. Sure they're pitied and in this case straight out despised for doing so but it's better than to get busted.

Not many things are certain but one of them is the EC WILL actively be trying to make "an example" out of UK before it loses control. This Superstate business certainly won't be helping, rather creating more panic on unforeseen magnitudes.

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Anonymous
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June 29, 2016 at 11:47 AM ×

Here's a certainty: the EU will have a banking crisis of epic proportions in a couple of years, and before or after that a social crisis. The UK will be one of the few safe havens. Rich people, industry and capital will flee there when the EU implodes. Look ahead and plan for this accordingly.

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Eddie
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June 29, 2016 at 12:22 PM ×

do remember the FTT (tobin tax) that Europe is rolling out

FTT is DOA right now.

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Bruce in Tennessee
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June 29, 2016 at 12:52 PM ×

The best line I've read today..concerning Brexit and our 8 year experiment:

How to create wealth without really creating wealth...

....Wordsmiths....

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June 29, 2016 at 1:27 PM ×

Here we are: Germany to oppose italian bank plan! Fasten your seat belt!

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Anonymous
admin
June 29, 2016 at 1:41 PM ×

Yes, Euro utilities bid, banks offered. Still lurking around DBank lows.

Looks like Renzi failed. This time.

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Booger
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June 29, 2016 at 1:51 PM ×

Too much speculation on Brexshit I think. To me the main things are: Brexshit has happened, it is a political event, there was an aftershit on the weekend with Cameron resigning and maybe another loose motion with Corbyn and the credit downgrade. To me that is enough diarrhea for a while. Unlikely that we wake up tomorrow and everyone has transformed into Newts.

OMG the market has totally lost it's brain and can't comprehend anything potentially positive about the UK and as we have reached that state of maximum pessimism, cable has slowly rallied and probably has formed a bottom from what I can see. Unlikely there will be another Brexshit tomorrow, Cameron resigns again or there is another downgrade tomorrow. The bad news does seem to be largely out there. Even if Cameron got shot tomorrow, that probably wouldn't have a huge effect either, perhaps cable would go back to 1.31, but unless there is further calamity, I think it rallies on slowly over the bodies of those poor longs who got in too early. Right now, if a H2 recession, BOE further easing are significantly priced in, that could be a pleasant surprise if they don't occur.

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Eddie
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June 29, 2016 at 1:56 PM ×

@TheBondStrategist: where did you get the news from? A quick search didn't reveal anything.

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Anonymous
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June 29, 2016 at 1:57 PM ×

The only thing that has happened is there was a vote to leave. Anyone making "projections" of what the future holds is a CHARLATAN. It will take years to find out, if in fact England leaves, the full benefits or repercussions of the decision.

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June 29, 2016 at 2:03 PM ×

@eddie: on bloomberg, now also in ZH

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Eddie
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June 29, 2016 at 2:14 PM ×

Thanks. Bad news for Italian retirees.

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Booger
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June 29, 2016 at 2:43 PM ×

US T-Bond looks very overbought to me. I think I will start selling some.

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Adrem
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June 29, 2016 at 2:50 PM ×

Anon has it. A lot of the comment on the future post-brexit is simply econ/financial phantasmagoria. One thing is for sure: european business has more to fear immediately than we do since they have been selling far more into the UK than we to them. Uk spendng on their exports accounts for the £30bn or so current account deficit we are carrying, so post the drop in Sterling that spending should turn inwards. Also UK foreign trade is split about 50/50 EU/Non-EU so where is this collapse in the UK economy coming from? Then there is oil: Brent is the biggest Euro oilfield, no slick. And the City. If there is one golden rule about the UK it is never sell the City short. If all tthose clients prefer to do buiness in Paris or Frankfurt they would have done so years ago. And now we have the Ankara atrocity. If ISIS can do that to a country that is Sunni what do you imagine their sleeper suicide bombers might do in Europe? They have lost Falujha but they are going to make damn sure the don't lose the terrorist war. ....Which brings us to immigration.

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June 29, 2016 at 3:03 PM ×

Mkts euphoria and volatility slammed...
2016 results YTD: active managers, HFs and multi assets are useless, benchmarks are unbeatable! never seen an higher level of underperformance in general

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CV
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June 29, 2016 at 3:07 PM ×

"One thing is for sure: european business has more to fear immediately than we do since they have been selling far more into the UK than we to them."

True, but this is not a decisive bargaining chip. After all, only 7% of German exports go to the U.K. ... that is all. The problem is this; right now; there is no coherent response from Westminster. If you're not on the field, you're not playing. If the Tories don't present something soon, they will get steamrolled. Which effectively means that it will be a clusterf'ck for BOTH the EU and the UK. Merkel is smart, though, she understands that they need time, but waiting until September?! That is bonkers.

First things first.

Are you invoking article 50? If yes, then you also need a proposal for a new deal and negotiations can begin. If not, then the EU will assume you're staying, which is fine, but you need to send a clear message on this given that you, uhm, voted to LEAVE.

Just doing nothing is like pissing your pants to get warm. It will lead to a domestic and EU backlash eventually. My understanding the Article 50 is that it IS indeed irreversible, but I don't think it precludes membership in the single market or anything else. We have never done this, so I think anything is possible. That is why I have said that the most likely new deal is a bilateral treaty, a new treaty!, between the EU and the UK.

For now though, the EU has reacted exactly like I expected. Hollande, Juncker etc pissing all over the yard, while Merkel has been quietly sending the right and correct signals.

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mi pa
admin
June 29, 2016 at 3:20 PM ×

@Adrem "One thing is for sure: european business has more to fear immediately than we do since they have been selling far more into the UK than we to them."

Funny statement, proportion of each export is more relevant don't you think so? It is really fun to read comments from brits these post brexit days. Lots of full Trump rhetoric...

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Cityhunter
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June 29, 2016 at 4:01 PM ×

@thebondstrategist

Why HFs underperformance is market euphoria? THere are so many funds doing SIMILAR stupid trades which seem to me is just what they shout get.

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Anonymous
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June 29, 2016 at 4:03 PM ×

As I said above, buy risk. US equity indexes will go back to ATHs. Crude is rallying, sterling is rallying, Brexit is a sideshow (like the Greek crisis non events in prev summers).

In modern finance you just need to understand one essential principle: BUY STAWKS !!!

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June 29, 2016 at 4:13 PM ×

@cityhunter: i'm not connecting the two points (at least not directly).. i'm only stating that now Us/em mkts are euphoric today. Hfs undeperformance sometimes is due to bad trades, sometimes to risk management excess, sometimes to irrational mkts...

i'm only stating that some benchmark are reaching epic level.. just think to japanese govies in yen for a usd/eur based investor... they're a big size in every global bond index.. i don't know anyone who's overweight

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abee crombie
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June 29, 2016 at 4:28 PM ×

As always, US markets have a short memory. Q2 earnings here we come. NKE didnt start so hot but my guess is companies will be OK as they were still rebounding from really dire forecasts in Q4/Q1. Likely Q3 is where we get disappointments.

Anyone watching BRL now... super strong!

As the anons said yesterday, vix slammed. wow. HYG like nothing happened

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Cityhunter
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June 29, 2016 at 4:31 PM ×

@TheBondStrategist

OK, fair enough. But I wouldn't call benchmark indices and EM euphoria, yet. This rally is exactly what should be expected in -/0 interest environment. CBs are digging bigger and bigger hole but I suspect it will only be CBs themselves that can trigger the collapse and bury themselves.

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johno
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June 29, 2016 at 4:47 PM ×

Betting on GBP here seems hard. I suppose people are coming up with targets based on various macro equilibrium models. Betting on such models and the myriad assumptions that go into them isn't a game I want to play. UK business investment will be hit hard, but that's about the only clear thing. This doesn't seem time to bet on EU or eurozone disintegration. We'll hear "whatever it takes" rhetoric and a very hard line with the UK. No way they start negotiating a trade agreement until Article 50 is invoked. The worse things go for the UK, the better the prospects for an EU-friendly government prevailing in next year's elections, especially France's. I wonder whether this weekend's Spanish election results had something to do with people seeing in the UK referendum result that extremists can actually deliver worse outcomes than the status quo. That includes extremists to the left. (aside: progressive, urban Labour voters, how are you liking Corbyn now?)
World growth will probably slow, but I don't see a recession. In the near-term at least, EMFX seems a decent bet as people look for carry. I've been shorting USDCOP, for instance. That's an implicit oil bet too, but oil doesn't seem obviously mis-priced to me in the short-run.

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Anonymous
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June 29, 2016 at 4:49 PM ×

LOL @ shorts

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Anonymous
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June 29, 2016 at 4:51 PM ×

Despite the equity rally, TLT just keeps going up ... ATH @ 140 this morning. And gold also just continues to be bid. Are they signalling Independence Day Weekend worries post end-of-quarter window dressing?

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Anonymous
admin
June 29, 2016 at 4:57 PM ×

@anon 4:49 - Yes, exactly. FTSE has recovered it's entire Brexit fall. SPX is rallying exponentially. JBTFD.

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Anonymous
admin
June 29, 2016 at 5:20 PM ×

Any bears left? Only I'm trying to add to my long positions and need someone to take the other side of the trade? Bwahahaha

So funny to see this "worse than 2008/9 crisis" turned around in 2 days of algo buying.

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Macro Man
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June 29, 2016 at 5:31 PM ×

You guys must really have small P/Ls to be spend this must time bragging and guffawing...or perhaps you're compensating for something else that's small? If you haven't got anything more to add than LOL SHORTZ ARE FULZ, this really isn't the place for you.

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Anonymous
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June 29, 2016 at 6:21 PM ×

MM - i think the btfd guys took Fri & Mon off. I don't recall reading their posts until Tues afternoon.

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johno
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June 29, 2016 at 6:45 PM ×

To those who are more clued into UK politics than me: do you think a sufficiently large group of Tory MPs (20?) could break ranks and vote down a motion to submit an Article 50 request?

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Polemic
admin
June 29, 2016 at 6:47 PM ×

Yawn re permabus and perm sells. the skill is to do both .. at the right times..

I have no greater killer for crowers of doom nor boom than a range.

The day that nothing happened. As Monty Python's Ralph Mellish experienced
http://polemics-pains.blogspot.co.uk/2016/06/ralph-mellish-and-markets-day-nothing.html

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Anonymous
admin
June 29, 2016 at 7:08 PM ×

MM - I take it you are short? Don't be wrong, get long. Your account balance will thank you.
Anon 6:21 - You need a dip before you can BTFD. Hence hard to buy before Tue. Just sayin'...

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June 29, 2016 at 7:57 PM ×

About jbtfd and co: it's really easy to notice that you are practitioners, serious guys haven't only a trade, buy or long spoos but manage a portfolio of trades/ book . So be careful to judge

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abee crombie
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June 29, 2016 at 8:13 PM ×

hey jbtfd/anon crowd, go trade eurostoxx for a month and then come back on this board ;-)

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Anonymous
admin
June 29, 2016 at 8:15 PM ×

SCHAEUBLE: EU MINISTERS, G-7 AGREED TO AVOID MARKET CHAOS

(Basically admitting Central Banks have been backstopping and bidding this risk rally).

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Anonymous
admin
June 29, 2016 at 8:27 PM ×

so uk going into recession and eu chance of recession increasing significantly is worth 30 points on spuz? mmmmmkay. color me skeptical. curious move in bonds as well. v surprised the pension rebalancing didnt take bonds lower.

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Anonymous
admin
June 29, 2016 at 9:13 PM ×

15 consecutive green hourly candles on ES (because equities are crashing due to brexit) bwahahaha

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Anonymous
admin
June 29, 2016 at 10:04 PM ×

One more Brexit style crisis and SPX will be at 3000.

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Anonymous
admin
June 29, 2016 at 10:06 PM ×

Bank buybacks and Divs. +$30bln. What perfect timing.

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Anonymous
admin
June 29, 2016 at 10:16 PM ×

The bearish brigade here now seriously wishing they'd gotten off their high horses and listened to the BTFD 12 yr old hedge fund mgrs who have produced more alpha in the last 48 hours buying SPX than the aforementioned have in the past 12 months lol.

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henner
admin
June 29, 2016 at 10:17 PM ×

somewhat off-topic question to the experts here... but what do you guys think of investing in infrastructure companys ? (investing for a long term portfolio, not trading) basically I think we will stay in a very low interest world for quite a while, so pension funds, insurers, everyone with long term payables will be looking for relatively safe and stable investments which pay out a fair amount of dividend. a bond replacement so to say. optimally something which isn't affected too much by an economic downturn like other high yielding stocks (insurers, banks, etc.) and where some of the returns are protected to inflation.... i see a pretty good match in infrastructure companies. power, gas, oil networks, toll companies, and so on. what do you guys think of that? good investment? cheers

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Anonymous
admin
June 29, 2016 at 10:26 PM ×

Did i say 30bln, make that 47bln

Btfd fella. Anyone who was bearish was short into brexit. They made bank.

The bounce has been blistering in Emini and Ftse. Spoos doing what it does, ftse rally needs to be currency adjusted but also factors in global companies.

Dax and esx have not been as strong.

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Anonymous
admin
June 29, 2016 at 10:42 PM ×

Based on the taunts, we must be near the top. I'm using it as a sign to liquidate some of my gains.

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Macro Man
admin
June 29, 2016 at 11:09 PM ×

If you have nothing constructive to say, you're going to get deleted. I am utterly uninterested in hearing anyone brag in the manner anons are doing. My vote counts 100%, yours counts zero, so you will be deleted if you don't have anything more interesting to say. Yahoo message boards are this way ------>

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hipper
admin
June 29, 2016 at 11:10 PM ×

If someone who hadn't followed the news had been in a hammock for a week after the brexit vote event he would've probably thought bremain won. It's easy to get that equities stay relatively competitive because of NIRP demolishing alternative investment returns but even near back to SPX highs was a surprise. Q2 earnings are coming soon, but are they getting any better? Growth expectations are getting taken down, valuations are high so is it based on anything else than the magic house of cards called NIRP?

But if you simply screen for stocks, like decent past revenue growth, ROIC, P/E and maybe high net cash to market value you might still be able to occasionally find some gems (including outside USA) even though they are getting quite rare. I do believe markets are efficient and they should eventually acknowledge the gems that work out, but the problem is no one knows how long it takes to actually happen. Sometimes even years.

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Anonymous
admin
June 29, 2016 at 11:18 PM ×

F*** brexit. Fade of the millenium. Fundamental macroeconomic conditions ARE IMPROVING. Political event impact short term nearly always are a fade. Long term more significant but harder to evaluate.

What matters is that inflation is rising slower than expected because unlike in 30s and 40s, no Hitler to fight and stimulate economies in sufficient scale through investment. But it's coming alright. See services, house prices etc. And when it comes, a LOT of people will look like idiots holding assets yielding <1%. Until then, all that matters for markets is that CBs will pay more than they did, irrespective of price.

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Polemic
admin
June 29, 2016 at 11:28 PM ×

While I have had my head down a Brexit hole I can only assume that other things have been trundling on as usual. And I would suggest that beneath all the brexiblx life goes on around the world and GDPs expand and all that.

What about Usd/jpy? I assume the last dump was Brexit shock but not much jump (yet). It could all be ratchet effect and stuck here now and going lower but a global rebound 'should' see it bounce towards 105 but hey its the yen.

Russia /Turkey relations. Thats an interesting one to watch. As a guy who has been through Ataturk airport many a time I feel their pain, but where Turkey has ended up re ISIS attacks is as predicted. Can't work out whether Erdoqanhas or hasn't apologised to Russia or not or retracted. But they are similar in the way they govern their countries and I wouldn't be surprised to see some form of cordiality be acquired. To the chagrin of NATO, which itself is suffering a lack of cohesion.

think Russia are going to start playing mr nice guy again after flirting with every airspace in Europe. Maybe just a run up to another physical push somewhere. Ukraine I have feeling the western Jo Public have lost interest or patience in with the western part not exactly coming across as legal decent honest and truthful recently.

Lots going on and would be nice to move away from Brexiblx for a while..

And for the record.. I have bought every low and sold every high in every product that is out there because I am a trading God ned dee ner dee ned and am now worth the GDP of a large futuristic alien planet and am writing this from my time machine because though I need none of you I want you all to fawn at my feet. Yours.. Anon



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Anonymous
admin
June 30, 2016 at 12:03 AM ×

Pol - Europe falls out with Turkey, Erdogan makes nice with Israel and sends a love letter to Russia, followed by a call. All he ever had to do was pick up the phone.

Erdogan will be a big play on the global front. Might take ten years.

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washedup
admin
June 30, 2016 at 12:20 AM ×

@henner I've been thinking about that infrastructure theme a bit - feels like the climate change theme in the 90's in that its probably an investable theme but not in the here and now - the kind of frying pan to the face type shock you would need to jolt policymakers into global infrastructure stimulus would need to occur first, and the time to buy would be after, not before, yes? also, devil's in the details - roads and bridges vs broadband vs tax credits lead to very different outcomes - massive renewed push into solar and wind may not be happy clappy for traditional companies, and so on. I suppose you can't go wrong with US steel makers and a construction co. like cat or joy in a situation like that - we will see.
Milken conference had some interesting discussions on the theme, so I suggest you check their website out the videos should be posted.

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Anonymous
admin
June 30, 2016 at 12:37 PM ×

from a comment in the ft- brilliant

So, let me get this straight... the leader of the opposition campaigned to stay but secretly wanted to leave, so his party held a non-binding vote to shame him into resigning so someone else could lead the campaign to ignore the result of the non-binding referendum which many people now think was just angry people trying to shame politicians into seeing they'd all done nothing to help them.
Meanwhile, the man who campaigned to leave because he hoped losing would help him win the leadership of his party, accidentally won and ruined any chance of leading because the man who thought he couldn't lose, did - but resigned before actually doing the thing the vote had been about. The man who'd always thought he'd lead next, campaigned so badly that everyone thought he was lying when he said the economy would crash - and he was, but it did, but he's not resigned, but, like the man who lost and the man who won, also now can't become leader. Which means the woman who quietly campaigned to stay but always said she wanted to leave is likely to become leader instead.
Which means she holds the same view as the leader of the opposition but for opposite reasons, but her party's view of this view is the opposite of the opposition's. And the opposition aren't yet opposing anything because the leader isn't listening to his party, who aren't listening to the country, who aren't listening to experts or possibly paying that much attention at all. However, none of their opponents actually want to be the one to do the thing that the vote was about, so there's not yet anything actually on the table to oppose anyway. And if no one ever does do the thing that most people asked them to do, it will be undemocratic and if any one ever does do it, it will be awful.
Clear?

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