tag:blogger.com,1999:blog-34323687.post2131074601317247680..comments2024-03-28T12:22:11.704+00:00Comments on Macro Man: Be Careful What You Wish ForMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-34323687.post-1863603654244601542014-05-16T23:01:36.647+01:002014-05-16T23:01:36.647+01:00back in my box then , thanks back in my box then , thanks rossconoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-38895537392550239162014-05-16T00:45:33.556+01:002014-05-16T00:45:33.556+01:00This is the wrong dataset for that study, as there...This is the wrong dataset for that study, as there have only been 15 months of <1% inflation since 1960- most of which came in 2009. Actually, the return/risk ratio of those 15 months is just above 1- better than that of the 1-1.9% cohort.<br /><br />Obviously, extending the study to the 1930's would change the results dramatically.Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-8347353709252121292014-05-16T00:33:44.710+01:002014-05-16T00:33:44.710+01:00With respect to the performance of US equities und...With respect to the performance of US equities under various states of inflation, what would be interesting is to divide the <2 sub set into <1 and >1<2 <br /><br />I think it would show that at sub 1% inflation US equities have almost never performed well and greater than 1 is the sweetspot. rossconoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-51290939147743176492014-05-15T17:57:08.561+01:002014-05-15T17:57:08.561+01:00Don't look now, Macro, but after the insanity ...Don't look now, Macro, but after the insanity of last week (when we saw Italy trading only 30-40 bps wide of US), BTPs are offered today, 10y up +16 bps today, this trade being the flip side of the bid in gilts and bunds. Could some of the UST buying also be a reflection of a new Risk Off move in Yoorp?Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-22508927260429491772014-05-15T16:20:30.262+01:002014-05-15T16:20:30.262+01:00Remember how strong US data was supposed to drive ...Remember how strong US data was supposed to drive UST10Y rates to the moon? Another large group of bond shorts were completely (toasted/ squeezed/ subjected to Cold Steel/ insert your own favorite metaphor here involving rear entry) this morning, an event almost predictable from the extreme positioning of futures traders.<br /><br />Strong data in the US, big bond buying. Who knew? "Be Careful What You Wish For" indeed. For the media morons, especially our friends @CNBC, who are plaintively asking "why is the market behaving his way?", we know that your tiny minds have always struggled with the bond market. Perhaps your brains are too clogged full of monetarist theory, the principle of American exceptionalism and other forms of neo-con political ideology to be able to parse the price information in the historical record. So here is a little primer from Uncle LB to help you.<br /><br />It works like this, kids, when Fedspeak says this: "we might commence QE" it is a signal to front-run the Fed by buying USTs; "we will commence QE now" is a signal to move out of USTs and out along the risk curve, vacating Ts for the new buyer (the Fed); "we might end QE at some point" is a signal to sell any remaining USTs; while "QE is ending imminently, it really is" is a signal to exit risky assets and move back down the risk curve to the safety of USTs.<br /><br />I realize most of you @CNBC weren't in the top 10% of the class, but is this really so hard to understand? It was all very nicely explained for the Meeja by Tony Crescenzi of PIMCO a few years back, and repeated here on a regular basis by many sage observers.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-33484711077168078572014-05-15T13:46:48.337+01:002014-05-15T13:46:48.337+01:00C Says
We started with a sell in the small caps ,b...C Says<br />We started with a sell in the small caps ,but we've now got a sell going in the Uk250. It's fairly typical for the large caps to be last dominoe.<br />Anyone really want the large cap indices at these highs, be my guest they are all yours.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-59606329463281565622014-05-15T12:41:05.728+01:002014-05-15T12:41:05.728+01:00Nice post. So instead of using outright equities a...Nice post. So instead of using outright equities as my classic inflation hedge, I should be buying some of those newly listed US dvd futures or even deep otm long dated DEDZ calls to protect purchasing power?Anonymousnoreply@blogger.com