tag:blogger.com,1999:blog-34323687.post1624770629846460924..comments2024-03-29T12:26:35.581+00:00Comments on Macro Man: Is the Aussie Safe to Short?Macro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger105125tag:blogger.com,1999:blog-34323687.post-65259340024031711612013-05-02T14:03:58.965+01:002013-05-02T14:03:58.965+01:00It would seem that the laughing gas was saved for ...It would seem that the laughing gas was saved for a later time. From what I gather only rate cuts and pep talks to improve cost competitiveness and effectiveness. That's pretty much no support at all.<br /><br />Nice note on the PMI Mr. C. I would guess that, when you look at how much the public sectors in the EU countries account for the GDP (over 50% in many countries), any downsize tinkering with the public sector will hugely affect the real economy. And this is what has been happening all along. <br /><br />A vicious circle of downward spiral through austerity which is affecting consumer spending in a huge way. And the solution seems to that seems to be absent, as a mean 'ol granny who is worried about the elections doesn't help the situation at all.<br /><br />There's just no way around it, public debt and spending it in stuff is ultimately the backbone driver for private consumption.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-12436204896057292632013-05-02T09:39:16.315+01:002013-05-02T09:39:16.315+01:00c says
http://www.markiteconomics.com/Survey/Press...c says<br />http://www.markiteconomics.com/Survey/PressRelease.mvc/ad71cdaa9bb8426ab3bf5aaddfb0418b<br /><br />The concluding commentary is well thought through as a summary of the position. Within the context of todays' ECB I would have to say that a rate cut would be like pissing in the wind.Primary problems will be inreasingly entrenched behavioural change in consumer behaviour.Consequent falling demand for credit and general monetary contraction. Against that a small change in the cost of finance is irrelevant. Indeed we've seen this before at earlier stages in the Uk for example where confidence leads people to retrench and paydown debt rather than borrow more simply because of a marginal change in rates. Indeed such changes have until recently failed to find their way through the banking system anyway.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-25338688954386464642013-05-01T20:31:48.857+01:002013-05-01T20:31:48.857+01:00If you re too scared to sell carry currencies or s...If you re too scared to sell carry currencies or short mining stocks, just go DOUCHBAGBS<br /><br />DOwn Under Climbdown to Hell. Buy AGBs.<br /><br />DDAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-13344250110904047282013-05-01T18:59:17.605+01:002013-05-01T18:59:17.605+01:00A really nice piece by Chris Kimble (via Doug Shor...A really nice piece by Chris Kimble (via Doug Short) on lumber prices, with falling lumber prices often a signifier of trouble ahead for the housing industry and other markets:<br /><br /><a href="http://advisorperspectives.com/dshort/guest/Chris-Kimble-130501-Lumber-Update.php" rel="nofollow"> Chris Kimble on Lumber </a>Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-69834108038862923892013-05-01T18:23:30.479+01:002013-05-01T18:23:30.479+01:00Leftback interesting thoughts on Australia. I cann...Leftback interesting thoughts on Australia. I cannot believe that PMI number. Well done by the way TMM seems your research on the ground is being reflected in the data. A lot of folks shorted AUD/YEN last week, which just broke the 100 handle, but I agree with DD, the real indicator of AUD weakness is the AUDCAD which is just coming off the range top. She'll have to break below parity to signal a downward range breakout, and more weakness to come. I just cannot stand how well this currency holds up sometimes, I'm always hesitant to short it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-87202560191394233492013-05-01T17:02:04.670+01:002013-05-01T17:02:04.670+01:00Of course Matthew Lynn is still looking for the ne...Of course Matthew Lynn is still looking for the next crisis to emerge EXACTLY where the last crisis was:<br /><br /><a href="http://www.marketwatch.com/story/five-places-to-expect-a-crisis-this-summer-2013-05-01?link=mw_home_kiosk" rel="nofollow"> Matthew Lynn Bangs On About Predictable Things In a Predictable Way </a><br /><br />So the nex problem is going to be in Europe. Imagine that! Cor, guv, Slovenia is going tits up next, innit, 'cos it's near Greece an' tha' .... but it's funny how that isn't what usually happens, b/c when there is a crisis some bloke comes out with a bazooka or a fire hose full of liquidity and drenches the area. Sorry, this is just a dull hack following the news and recycling conventional wisdom.<br /><br />Matthew, you have just earned your 3rd Knob Of The Week title. Retrospective analysis of your previous calls has shown you to be almost 100% fallible. Pretty soon you will be in the Knob Hall Of Fame.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-8708073824534680292013-05-01T16:54:10.577+01:002013-05-01T16:54:10.577+01:00Maybe the time really has come to short the p*ss o...Maybe the time really has come to short the p*ss out of Australian equities. This PMI number was quite unbelievable:<br /><br /><a href="http://www.bloomberg.com/news/2013-04-30/australia-manufacturing-gauge-plunged-to-four-year-low-in-april.html" rel="nofollow"> Australian PMI Plunges </a><br /><br />Once we see Aussie unemployment spike, there will already be lots and lots of pain cemented into the housing sector and in the banks. Investors aren't going to wait around to see how bad it is going to get. There is absolutely no reason why Aussie banks won't get completely taken to the cleaners in the next 6-12 months. They haven't exactly skimped on leverage in their exposure to The Lucky Country, that's for sure.<br /><br />Long yen is the safety trade for all things Asian, look for a lot of JPY carry trades to start unwinding. I bet nobody thought the next big blow-up would be in Australia....?Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-61300750349968353522013-05-01T16:43:54.918+01:002013-05-01T16:43:54.918+01:00A possible short-term contrarian indicator, here. ...A possible short-term contrarian indicator, here. Über-bullish Knob comments on the market, from the historical epicenter of Knob Commentary:<br /><br /><a href="http://www.marketwatch.com/story/sp-500-will-be-at-1700-on-halloween-2013-05-01" rel="nofollow"> Some Knobs Already Banging On About SPX 1700 </a><br /><br />It's a bit like counting Abby Joseph Cohen sightings on TV, usually means things are a bit toppy, whereas if you see David Rosenberg + Gary Shilling on CNBC on the same day = a bottom, sell Treasuries today.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-7287270886255564022013-05-01T16:34:06.115+01:002013-05-01T16:34:06.115+01:00C Says
Looking now at the global data flow there w...C Says<br />Looking now at the global data flow there was little out of the US today to help Asia tonight and our friend Yenny is tottering with about 65b of equity inflows behind it (hope they're not held on margin ..I lied) and if that's not good enough you get the opportunity to wake up tomorrow to a pile of EU data and after IR and NL can there be anybody out there wanting to take the upside for that?<br />Of course this is all as nothing for the bearded one.The master of the tide !Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-11562533120349619492013-05-01T14:52:48.864+01:002013-05-01T14:52:48.864+01:00Rally caps on today, no doubt, as today's weak...Rally caps on today, no doubt, as today's weak employment data means the chance of FOMC tapering any time soon is zero. So QE forever, dudes, until one day we will wake up to find there is no POMO. That day is not today.<br /><br />But.... at the end of the day, we will have to return to the disappointing Q1 earnings of many US companies, slower growth in China, Europe still a mess, and good old seasonal slowdown that promises to make the Q2 earnings even more underwhelming. <br /><br />Today is one thing, but once the FED is out of the way for another month we'll see whether anyone wants to Curb their Enthusiasm a little. The consensus number for Friday was +153k and that looks over-optimistic now. We were at +135k, but after ADP it could even be as low as +50k now.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-24397040198202592292013-05-01T14:51:23.236+01:002013-05-01T14:51:23.236+01:00The euro appears to be looking for the Beard to be...The euro appears to be looking for the Beard to be dovish. But the sharp falls in the shiny stuff, Mr. Bond yield and oil (pre FOMC) suggest a more deflationary interpretation of growth (and profits). As noted by C, it might imply more QE, but 'more policy' is not doing much for earnings.Skippynoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-74934543981653057002013-05-01T13:58:47.565+01:002013-05-01T13:58:47.565+01:00C Says
The ADP number and the lower revision of la...C Says<br />The ADP number and the lower revision of last months awful number put employment on the backfoot. Might be good for QE extending,but it's not supportive of growth and top line is already a problem in earnings.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-85311330797141089582013-05-01T11:13:58.681+01:002013-05-01T11:13:58.681+01:00C Says
We come out of the monthly sweetspot seeing...C Says<br />We come out of the monthly sweetspot seeing those auto reinvested moneyflows which were more or less positive for most stuff. Henceforth we get back to the data,earnings etc .Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-82053721675114842152013-05-01T05:11:59.905+01:002013-05-01T05:11:59.905+01:00Bloomberg: US mint sales of gold coins at 3-year h...Bloomberg: US mint sales of gold coins at 3-year high. DUMB MONEY?WellRednoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-11748972441413399582013-04-30T21:56:48.963+01:002013-04-30T21:56:48.963+01:00This market reminds me of 1995, where the spoos w...This market reminds me of 1995, where the spoos went up in a straight line, every day, none-stop, for 12 months! <br /><br />Back then, Greenspan was busy doing what Bernanke is doing now. I guess the old saying "don't fight the Fed" is still true. <br /><br /><br />1995:<br />http://stockcharts.com/h-sc/ui?s=$SPX&p=D&st=1994-12-01&en=1995-12-31&id=p75691987360<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-72888732339586629222013-04-30T17:53:47.969+01:002013-04-30T17:53:47.969+01:00Vol sellers at it again, but the VIX hasn't re...Vol sellers at it again, but the VIX hasn't revisited those depths of 11-12 this time. Perhaps after the market gets its methadone tomorrow?<br /><br />Not messing with this until the FED is behind us.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-71855111519467080822013-04-30T17:09:39.545+01:002013-04-30T17:09:39.545+01:00ECB monetary policy is so tight it should be crimi...ECB monetary policy is so tight it should be criminal. Amazing to think how much misery one country has brought over the course of a century or so...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-24414054448493400712013-04-30T16:29:49.405+01:002013-04-30T16:29:49.405+01:00Europe are squeezing your nuts for grins, Anon, as...Europe are squeezing your nuts for grins, Anon, as everyone (me included) is expecting the rate cut. It also seems that the usual seasonal US economic weakness is becoming more apparent now, and so the ubiquitous stronger USD trade (buy US equities, real estate, Treasuries, anything American) is probably on its last legs here, for a while at least. <br /><br />Once we get a decent flush of over-priced assets, it is probably going to be a decent time to look around at values in the emerging markets, consistent with a short period of declining USD. The stronger dollar trend will resume once we digest the usual spring/summer slowdown and approach the all-important German elections in September.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-92056300979246600102013-04-30T16:05:04.652+01:002013-04-30T16:05:04.652+01:00C Says
"Europe" are basically imploding ...C Says<br />"Europe" are basically imploding that is what they are doing although looking at some of the equity plays you could be forgiven for thinking otherwise. <br /><br />I'd love to see the net migration numbers for say Spain to put some context onto their "employment" numbers. I suspect what is happening there is the debt is moving up and some of the people who could pay it in the future are moving out which summarised means the story is actually even worse than it appears.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-76635137773168821822013-04-30T15:50:46.884+01:002013-04-30T15:50:46.884+01:00WTF are they doing in Europe? They actually want ...WTF are they doing in Europe? They actually want a stronger Euro or sumthing? Buncha puffs.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-38721177356587707572013-04-30T14:57:57.106+01:002013-04-30T14:57:57.106+01:00Chicago PMI in recessionary territory at 49, addin...Chicago PMI in recessionary territory at 49, adding to the weak US econ data deluge we have seen in recent weeks. If we got a number like that out of China blokes would be throwing everything out of the window, yet here everyone is, waiting to suck on the mother's milk of QE from the FOMC teat.<br /><br />Wonder whether we see any reflection of this in the week's jobs numbers? Not yet is my answer. Initial claims are telling me we will see a modest bounce back from last month, so our bet is on a tepid +135k on Friday. By the time the lagging indicators catch up with the slowing economy we will be in a much different market. This is going to be a very tricky week indeed.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-84688701593903331082013-04-30T14:28:49.367+01:002013-04-30T14:28:49.367+01:00agreed DD, take a look at CS Fear Index, basically...agreed DD, take a look at CS Fear Index, basically the same thing. Put option vol is cheap. But in the past few years, cheap call vol has been associated with sell offs.<br /><br />ASX new highs, off strength from Financials. Dont run into that trade too quickabee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-72944636682722670782013-04-30T14:23:20.556+01:002013-04-30T14:23:20.556+01:00C Says
When the data goes one way and the mom trie...C Says<br />When the data goes one way and the mom tries to go the other way through what I see has a roughly sideways range then I treat the mom as the squeeze staying patient and not overly aggressive. Little pings about "new highs" are irrelevant as far as I am concerned.<br />In essence the economic data is broadly deteriorating along with earnings. There are media sentiment games ,but you have to decide if that is really the game you are in and if so what is your signal to get out.<br />The breadth is showing a squeeze,but as it stands the margin for that to go sour is quite narrow and worth waiting for to determine the next tilt on the portfolio.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-36137284034610941982013-04-30T14:19:39.667+01:002013-04-30T14:19:39.667+01:00It's quiet. Too quiet......
Too many of the f...It's quiet. Too quiet......<br /><br />Too many of the following outcomes and trades have been counted out at this time as "not plausible". <br /><br />Stronger yen, for example (howls of derision)<br />FED mention of tapering QE (the hawks are dead!)<br />Some semblance of recovery in Europe's economy<br />US underperformance in Q2-3 (or indeed ever!).<br />Large bank reorganization/s, capital requirements.<br /><br />Everyone has their money on:<br /><br />Unabated Abenomics<br />QE infinity<br />ECB rate cut on eternal economic weakness<br />Cash is trash<br />"Stocks are cheap relative to bonds"<br /><br />..and that means almost everyone is going over to the same side of a small number of boats.<br /><br />This is one of those times when it isn't smart to be standing on the other side of the boat on your own, but it might be a great time to be sitting in your own little lifeboat with some provisions and a massive stash of cash. Why? Because experience has taught us that it is hard to make money at those times when everyone has forgotten risk.<br /><br />Did we mention we hate trading Fed week, ECB week etc? We closed a bunch of longs yesterday, and are more than happy to sit this out for a few days. When "it's easy to make money in this market" we get very nervous.<br /><br />Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-7959207206033153572013-04-30T11:41:35.451+01:002013-04-30T11:41:35.451+01:00But the probability of "seeing 1480 first&quo...But the probability of "seeing 1480 first" probably priced in as much (if not more) than "getting to 1700 in a year's time". So, there, SPY risk reversals for those inclined to own upside risk at decent prices.<br /><br />On a sidenote, not macro, but still fascinating.<br />"VOW, part deux" price action in Elon Musk. Serious pain for some shorties in that one.<br /><br />DDAnonymousnoreply@blogger.com