tag:blogger.com,1999:blog-34323687.post1528870552820140132..comments2024-03-28T00:23:22.838+00:00Comments on Macro Man: Friday Roundup: CNY Internationaliztion (not), Another FOMC One-Off Excuse, and Oil DemandMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger19125tag:blogger.com,1999:blog-34323687.post-70889486530499778482017-10-23T04:57:10.652+01:002017-10-23T04:57:10.652+01:00Eddie, I'm no economist, but I suspect there&#...Eddie, I'm no economist, but I suspect there's something wrong with Hoisington's logic on pages 2-3 where they assume M2 is a fixed ratio of M0 (and then use some fixed or declining ratio of GDP to M2, V, to estimate growth effects). Isn't this the kind of Ec 101 thinking that's been debunked, say, here: http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf<br />I do think there's something to their argument about income growth and borrowing constraining the US consumer, however.<br />Ah, the PTJ documentary. Seeing that, I was like, "man, if he's a 'Great' then I really have a shot at this game!" Still, HUGE respect for the passion and intensity, and no arguing that his methods worked for him then.<br />johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-17732908994848792122017-10-23T04:00:09.647+01:002017-10-23T04:00:09.647+01:00@IPA thanks for the line on the video bro!!!! No i...@IPA thanks for the line on the video bro!!!! No idea what he was tripping about it being released...it's perfect. It's an honest cut IMO. Good traders are cut-throat (generally)they will definitely be humbled, and its inside look at how traders placed trades in the open outcry exchanges. Fucking hat tip @IPAsdot54https://www.blogger.com/profile/15849714548471331301noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-43812780811647067412017-10-23T02:22:00.351+01:002017-10-23T02:22:00.351+01:00@Shane, watch it quickly before PTJ tells them to ...@Shane, watch it quickly before PTJ tells them to take it off their site.<br /><br />http://documentaryvine.com/video/trader-the-documentary/IPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-6955343437173671162017-10-22T11:26:32.165+01:002017-10-22T11:26:32.165+01:00@TMM, I say , that about sums up the shit men down...@TMM, I say , that about sums up the shit men down south. Good luck. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-90269002620774628952017-10-22T11:24:20.098+01:002017-10-22T11:24:20.098+01:00@Buystocks, for being the commentate of the year y...@Buystocks, for being the commentate of the year you get to keep Team Macro Man's furniture , and do as you please. You may donate it to charity , or you may hang on to it and use it as leverage one day in case of the need of an emergency. Just don't call me, and don't bother me. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-27583230149541177282017-10-22T02:14:39.772+01:002017-10-22T02:14:39.772+01:00@Buystocks, thank you again. I remember being eigh...@Buystocks, thank you again. I remember being eight years old when some Eastern European nutter down the street chased me and my friend around the block offering shares in a greyhound racing syndicate. I passed his offer to my father, and he was down there at his front door within a minute, no questions asked. The guy was a nutter. Have a go this lot. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-77053064224466598242017-10-21T23:48:36.815+01:002017-10-21T23:48:36.815+01:00Wow, my fault I must have been in a hurry. I was s...Wow, my fault I must have been in a hurry. I was simply saying that much of China'a wealth is very concentrated relative to the the other 1.2 billion in that country. That (IMO) won't end well. And again China is claiming they're going very automated in their factories (I dig the idea so we can sell them the robots) Now, this is CRAZY IMO because all of those hungry people will eventually say enough is enough. The democratic revolution haunts the party leaders sleep. So they think they want to create a S.S. trust fund as a safety net for the hundred's of millions....yeah...that will loose their jobs. That is where the math steps in and stops that fairy tale. Impossible to pay for...so I' just don't think its the future leader of the galaxy like everyone else does. It doesn't mean I don't have respect for Chinese people or China itself. It is very important in the world. Just not ready to say, "yeah I could see it in 30-50 years." So yeah that's what i meantsdot54https://www.blogger.com/profile/15849714548471331301noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-37344954484066007312017-10-21T23:21:14.384+01:002017-10-21T23:21:14.384+01:00Shane, when you said "Very highly concentrate...Shane, when you said "Very highly concentrated wealth that leaves a billion people hungry." Is this metaphorically speaking or literally? <br /><br />LB, agree with your thesis on long term bond yield, but as always, I think you are a little bit early, again.zjhttps://www.blogger.com/profile/00471708200800450178noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-87136109085120378902017-10-21T22:12:46.379+01:002017-10-21T22:12:46.379+01:00Here is a ZeroHedge (I still sift through it from ...Here is a ZeroHedge (I still sift through it from time to time) article out today describing exactly what I was describing in my argument about the genesis of the GFC. It was the last post before this thread. In case anyone thought I was making shit up...cuz ol boy thought I was nuts. We were just missing eachother, something...<br /><br />On Wednesday, we noted the renewed tightness developing in dollar funding markets. Ignoring embryonic signs of stress in the financial “plumbing” can be dangerous. The divergence of LIBOR from Fed Funds on 9 August 2007, which occurred two months prior to the peak in the Dow, always comes to mind. ZH<br /><br />http://www.zerohedge.com/news/2017-10-18/dolar-funding-shortage-it-never-went-away-and-its-starting-get-worse-again<br /><br />I agree with you LB regarding the China touchiness. It's bizarre. The Yuan has fallen in usage via SWIFT data tracker. The fact of the matter is they are very poor in china, but obviously they have a growing middle class, and now some super wealthy. Very highly concentrated wealth that leaves a billion people hungry. They face awful demographic challenges as well. <br />In the US however, the birth rate is rising rapidly again. Researchers discovered it was the fact that high-school girls weren't get pregnant and women were waiting about 3 years later to have kids. People claim that Chinese leadership will create a safety net or S.S. fund for all the Chinese citizens. This is literally impossible due to something as simple as basic math.<br /><br /><br />I'm not hating on China by any means. I'm just looking at the facts. I'm well aware of America's misgivings as well. The influence peddling, vote buying, and the legislation gridlock in D.C fucking pisses me off to no end. The Fed is the enemy no doubt. <br /><br /><br />TAX REFORM is a game changer for the US. I'm talking specifically about the 50% of Americans who get refunds and pay no tax, but should. Tax Policy showed that 40% of the 50% could pay a few thousand minimum (with the other income tax breaks it wouldn't hurt them) I mean half of US taxpayers paying nothing then paying a few k is like an annual 1.2-1.4 Trillion boost to the revenue at the Treasury. The US is also the only nation without a VAT. Just those two streams of revenue would be huge. We could begin paying debts down, funding healthcare/medicare, interest on debt, S.S. etc. So in my view the US is not the proverbial boxer wobbling up against the ropes like everyone else thinks.<br /><br />long vol and I own a piece of the "SVXY crash" trade also. Just took a position in the Canadian mess that's brewing. I'm long USD/CAD<br /><br />P.S. anyone the Paul Tudor Jones movie making the twitter rounds again? I'm a bit younger so I had never seen, but I'd heard of it. I thought it was pretty dope <br />sdot54https://www.blogger.com/profile/15849714548471331301noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-84376589182272165202017-10-21T17:51:27.662+01:002017-10-21T17:51:27.662+01:00LB finds himself sharing Shawn's skepticism ab...LB finds himself sharing Shawn's skepticism about Trump's ability to deliver significant pieces of legislation. It is fairly likely that the tax reform bill will be held up, amended in the House or will simply die because of the lack of ability of this White House to work with the legislative branch. In any case, this seems like a great Sell The News set up, as most of the potential profit enhancements of tax reform have probably been priced in at this point. <br /><br />A quick word about fixed income. The 2.40% level in the 10y held up well the last few weeks - this in the face of all manner of "reflationary" rhetoric. If you read the mainstream media you would think that the yield curve was steepening to benefit the banks etc… when in reality the curve has continued to flatten for months. Bond shorts are desperate for the long end to blow out, but it simply hasn't happened. There is a fantasy that Trump + John Taylor = 4% GDP and 5% 10y, to which I say LMFAO.<br /><br />Read the Lacy Hunt article above (thanks Eddie) for a discussion of the yield curve, with which we completely agree. [Btw, regular readers will know that we called most of the important turns in the long bond over the last ten years. E.g. Spring 2010, December 2016…] We are long TLT, for the record, and have been adding to the position over the last 2-3 weeks.<br /><br />“Intellectual deleveraging cycle”. That’s brilliant. You gotta trademark that.<br /><br />Agreed. Brilliant. Expect to see it reproduced in the mainstream media without appropriate citation…. ;-)<br /><br />It's interesting how hostile people are when Chinese data and truth are juxtaposed in the same sentence. Nobody questions the scale of the Chinese economy or indeed of social progress in PRC. but that's not the same as saying it is a good place to invest. Chinese money continues to exit for other locales (Vancouver, Sydney etc.. ) precisely BECAUSE they know that the Chinese financial system is a house of cards that will fold like a cheap tent when the wind blows hard enough.<br /><br />The levels of debt are remarkable for a country that has already entered a demographic downturn. It's intellectually dishonest at this point to pretend that most of the official US economic data are real, so why should we expect this from China? , where a limited understanding of statistics and probability reveals that the official growth numbers are extensively massaged, if not simply completely invented by Beijing, i.e. "model-generated".<br /><br />Keep half an eye on Catalonia, people. Things could get ugly there in a hurry, and that will have potential for contagion. We are for the time being also long vol, short IWM and have a piece of that "SVXY collapse" trade idea discussed here by others.Leftbackhttps://www.blogger.com/profile/07728096415928915882noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-8489470602820500022017-10-21T17:19:54.203+01:002017-10-21T17:19:54.203+01:00Lacy Hunt on Inflation and more...
https://www.cm...Lacy Hunt on Inflation and more...<br /><br />https://www.cmgwealth.com/wp-content/uploads/2017/10/HIM2017Q3.pdfEddiehttps://www.blogger.com/profile/18011114950206155472noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-45771608197706801562017-10-21T11:49:26.390+01:002017-10-21T11:49:26.390+01:00@Buystock, thank you very much for your comment. I...@Buystock, thank you very much for your comment. It was always there, but that kick it out. I'm going back to being a mug punter, thank you very much. Now you know why some them just go drifting. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-88884252257738051512017-10-21T11:40:53.568+01:002017-10-21T11:40:53.568+01:00“Intellectual deleveraging cycle”. That’s brillian...“Intellectual deleveraging cycle”. That’s brilliant. You gotta trademark that.<br /><br />Trademark nothing, not in this lifetime. @Buystocks was spot on. If you haven't made coin the last 7 years than forget this market. Forget trying to jump in now. Fuck that, who'd want to have to come on the trading desk now starting a career on Wall Street and bringing a family up in that environment. Fuck that. Not at my age. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-91245460686829857532017-10-21T00:29:12.285+01:002017-10-21T00:29:12.285+01:00Shawn, thanks for that visual on oil demand. Today...Shawn, thanks for that visual on oil demand. Today is the highest weekly close since the 4/10 week (on both NYMEX pit and GLOBEX). I would like to point out that XLE daily is looking like it's flagging here. Pole distance is $7. While the momentum studies are getting oversold the price is totally nonchalant. I think it challenges $70 next week and probably goes well north of that by the end of the year, like $75-ish maybe. Crude should follow. IPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-3883714958896273582017-10-20T23:27:08.915+01:002017-10-20T23:27:08.915+01:00“Intellectual deleveraging cycle”. That’s brillian...“Intellectual deleveraging cycle”. That’s brilliant. You gotta trademark that. EM Inflationistahttps://www.blogger.com/profile/13376753485910252234noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-42778927163512381972017-10-20T19:54:28.688+01:002017-10-20T19:54:28.688+01:00https://www.ft.com/content/0f534aa4-4549-11e7-8519...https://www.ft.com/content/0f534aa4-4549-11e7-8519-9f94ee97d996<br /><br />Africa after that... <br />Nice and quietly China is buying continents.<br />North Korea my ass. Skrhttps://www.blogger.com/profile/15637819137472818789noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-83150781552467893902017-10-20T19:08:35.760+01:002017-10-20T19:08:35.760+01:00Johno,
good call on the TOPIX/Yen correlation be...Johno, <br /><br />good call on the TOPIX/Yen correlation being broken. It's wild really. IMO it's due to the face the BOJ has purchased 85% of total Japanese ETF stock. So even when the Yen strengthens the TOPIX is not affected. In fact it seems to get a boost from the strong Yen. Those ETF's trapped at the BOJ won't allow the TOPIX to drop and recouple with the Yen.sdot54https://www.blogger.com/profile/15849714548471331301noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-87433326080528114652017-10-20T18:57:53.759+01:002017-10-20T18:57:53.759+01:00Nice post, Shawn.
My weekend parting shots list:
...Nice post, Shawn.<br /><br />My weekend parting shots list:<br />1) Re US hegemony, let's not forget that the US (and its brand image) has long attracted much of the world's best and brightest. Consider a country of 0.3b taking, a totally pulled-from-ass, 25% of the rest of the world's best and brightest. That's (7.3b x 25%) / 0.3b = 6x leverage, i.e. the US is 6x levered to the work product of the world's top minds. Look at the % of Silicon Valley companies started by 1st generation Americans as exhibit A. Now consider what Trump is doing for that brand image. My guess is America is beginning an intellectual deleveraging cycle.<br />2) A glance at CHIQ says AsiaProp is right about the Chinese consumer. Price always wins the argument.<br />3) The UK is toast, going by Martin Wolf's FT assessment today.<br />4) Trump rips up the Iran deal. Expect him to do the same with NAFTA, especially with votes to win in 2018. I feel truly awful for Mexico.<br />5) If China marks down its official growth target to the rate skeptics call "real," I bet Chinese stocks double. Financial markets are ironic that way.<br />6) What's going on in Japan? TOPIX/yen relationship signals regime change.<br />7) Earlier this year, I could hardly find a currency I didn't want to own against USD. Now I like USD more than a slim majority. In FX, the standout for me is EURCHF. Very long in option formats.<br /><br />johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-90925268408783468662017-10-20T18:46:07.214+01:002017-10-20T18:46:07.214+01:00Shawn, a little light reading for the weekend...
...Shawn, a little light reading for the weekend...<br /><br />https://www.buildaustralia.com.au/all-projects/<br /><br />Massive recruitment drives ongoing/coming for Australia. 10-15 years of this ahead. <br />Could we get the loop? With all the planned diversification from mining in Oz, I think it will actually kick start the mining sector. <br />Australia - the new mini China boom to keep everything ticking over. Funded by China... Cough. (consider the last 5 years as a consolidation. Next 12-18 months to see it clearly). Skrhttps://www.blogger.com/profile/15637819137472818789noreply@blogger.com