tag:blogger.com,1999:blog-34323687.post4132655254129241124..comments2024-03-28T12:22:11.704+00:00Comments on Macro Man: The world as it is, not as we'd like itMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger29125tag:blogger.com,1999:blog-34323687.post-55549997617642505992015-10-16T07:20:29.611+01:002015-10-16T07:20:29.611+01:00Nico - Anon 9:14 here.
I agree with half of what...Nico - Anon 9:14 here. <br /><br />I agree with half of what you say: it is possible to make some money shorting (Aug this year for example). I also agree that I know no-one who rode this entire equity bull market all the way up (I remember many thinking it would crash big time in 2011). <br /><br />My point is that I think that most major governments and central banks (who are all politicized) have totally lost their way. We face massive structural problems but governments are incompetent & just want central banks to print their way out of this mess. As a result I think we face ZIRP and QE forever (like Japan). Going short is basically trading against that and seems to be financial suicide. If we get a major down-turn, I expect: more QE, negative rates, and a ban on all shorting. How can you win against that?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-56376299763157726182015-10-16T00:06:01.675+01:002015-10-16T00:06:01.675+01:00Damnit. Zerohedge has covered my opex short. There...Damnit. Zerohedge has covered my opex short. There goes that one...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-45295577640067711872015-10-15T22:48:19.581+01:002015-10-15T22:48:19.581+01:00Anon 9:14
spare us the triumph you are still 5% ...Anon 9:14 <br /><br />spare us the triumph you are still 5% from the high<br /><br />competent shorts operate very fast (brief or larger) counter trend - you'd be surprised how much you can scalp off shorting a bull market, and the truckload of money you make swinging sideways/high volatility as of late<br /><br />yeah sure, you can frontrun both CBs and buy backs trail profits and switch off your machine. Where is the fun in all that? Unless you have another job of course<br />. <br />After 6 years or so of bull market it will only boils down to WHEN you took your longs out. We cannot say bulls are monster smart until they have cashed on their profit<br /><br />i was long on and off between sub-700 and 1540 on spoos. Of course i got out too soon. I do not know anyone retail who is riding this bull since march 2009. NO way.<br /><br />I am absolutely convinced we'll go back to 1540-1600. Not because i have been missing out since lol - just because that legendary break out will have to be tested, so bare it in mind when you are long should it occur within your timeframe.Nicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-51634957163832662322015-10-15T22:14:20.732+01:002015-10-15T22:14:20.732+01:00Nico G @ 7:21 - Except we are not. US Median CPI i...Nico G @ 7:21 - Except we are not. US Median CPI is now @ 2.5% and likely will keep rising. "Stagflation" isn't a new term but many folks (including our precious Fed) have forgotten.Marshall Junghttps://www.blogger.com/profile/01494663748081037987noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-1226846481121104322015-10-15T21:38:30.216+01:002015-10-15T21:38:30.216+01:00Meh. Op ex tomorrow.Meh. Op ex tomorrow.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-59713498404814832292015-10-15T21:14:18.202+01:002015-10-15T21:14:18.202+01:00Let's face it shorts are not very intelligent....Let's face it shorts are not very intelligent. Short equities = betting against central banks (a poor bet). We will be back to all time highs in US equities before year end.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-22663939139949373092015-10-15T20:53:39.305+01:002015-10-15T20:53:39.305+01:00Strong ramp by equities here; if Draghi brings the...Strong ramp by equities here; if Draghi brings the goodie bag next week, I fear for the health of Mr. Shorty, I really do. Short-term punters will understandably be starting to sniff for a counter move, but I wouldn't be too cute here. I think it has legs. CVhttps://www.blogger.com/profile/16843402165210120665noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-91268678526047619582015-10-15T20:34:05.464+01:002015-10-15T20:34:05.464+01:00MASSIVE equity buy programs in progress...MASSIVE equity buy programs in progress...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-2333376770694001042015-10-15T19:21:05.641+01:002015-10-15T19:21:05.641+01:00EVERYONE is dealing with an outright deflation as ...EVERYONE is dealing with an outright deflation as we speak. it is worldwide<br /><br />regarding USDJPY it is as much an undervalued yen as it is an overvalued dollar<br /><br />a long term position thoughNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-9575228841574414142015-10-15T19:09:09.644+01:002015-10-15T19:09:09.644+01:00@NICO,
Do you think that BOJ is going to sit ther...@NICO,<br /><br />Do you think that BOJ is going to sit there while USDJPY drops to 100? They have an outright deflation in front of them if they do not do anything soon.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-85364059572548066802015-10-15T18:53:30.594+01:002015-10-15T18:53:30.594+01:00the irony here is amazing. It is your (Nico) belov...the irony here is amazing. It is your (Nico) beloved ZIRP to NIRP Riksbank that gives the prize in economics. They just call it "in memory of Nobel". <br /><br />Some critics argue that the prestige of the Prize in Economics derives in part from its association with the Nobel Prizes, an association that has often been a source of controversy. Among them is the Swedish human rights lawyer Peter Nobel, a great-grandson of Ludvig Nobel.[28] Nobel criticizes the awarding institution of misusing his family's name, and states that no member of the Nobel family has ever had the intention of establishing a prize in economics.[29]<br /><br />According to Samuel Brittan of the Financial Times, both of the former Swedish ministers of finance, Kjell-Olof Feldt and Gunnar Myrdal, wanted the prize abolished, saying, "Myrdal rather less graciously wanted the prize abolished because it had been given to such reactionaries as Hayek (and afterwards Milton Friedman)."[26]Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-5911472552845154492015-10-15T18:39:43.715+01:002015-10-15T18:39:43.715+01:00shit who's gonna tell Scholes it was a prankshit who's gonna tell Scholes it was a prankNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-83558579603750730542015-10-15T18:31:07.368+01:002015-10-15T18:31:07.368+01:00The Nobel committe does NOT give a prize in econom...The Nobel committe does NOT give a prize in economics.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-61741126810051961932015-10-15T18:25:52.616+01:002015-10-15T18:25:52.616+01:00Goldman bonus pool down 30%
this is deflationaryGoldman bonus pool down 30%<br /><br />this is deflationaryNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-62732662132882142142015-10-15T16:51:33.110+01:002015-10-15T16:51:33.110+01:00@ Down, don't get your hopes up too high...the...@ Down, don't get your hopes up too high...there isn't an exhaustive modelling of the macro impact of ZIRP in the offing. What I would suggest however is that the impact of a rate rise <i>should</i> be dulled relative to history because in may cases, the price of money has little to do with the allocation of credit, because of (seemingly) structural shifts in particularly the supply curve for credit. Where credit is freely dispensed on the basis of price, on the other hand, a very good argument could be made that it has been oversupplied, and thus could do with a higher price to curb demand.Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-67274843051337642222015-10-15T16:02:33.454+01:002015-10-15T16:02:33.454+01:00MM-
What are the advantages of looking through th...MM-<br /><br />What are the advantages of looking through the current troubles and raising interest rates? <br /><br />Prices are heading the wrong direction and wages are not growing much, while spreads are tight-ish and equities are expensive-ish. Under these circumstances, if rates were 3% (as an example) no one would be arguing to raise them to 3.25%.<br /><br />If a stock is trading at $100 is it expensive? Well $100 is a lot of money, but the stock is pretty cheap if it earns $20/share a year. The unease with zero rates seems analogous. Zero is just a number. It's too low under certain circumstances and too high in others. <br /><br />I wish inflation were running hot and wages were rising. It would be better for everyone and the Fed's course would be clear. Sadly that's not what's happening. Some action on the fiscal side is sorely needed, but we all know that isn't in the offing. Why then would it be better to raise interest rates? Wouldn't that result in fewer new jobs, declining prices and an increased risk of recession?<br /><br />You hinted that your response if coming in a post tomorrow. Looking forward to reading it.DownWithTheBeanCounternoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-90237211577706536362015-10-15T16:01:10.645+01:002015-10-15T16:01:10.645+01:00"had a similar double top before ".Your ..."had a similar double top before ".Your only mistake then was not getting LB to run his skillset over it ;)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-46619905862060486172015-10-15T15:27:23.046+01:002015-10-15T15:27:23.046+01:00..and surgery is incredibly more costly than a pac.....and surgery is incredibly more costly than a pack of advilNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-1227408213355349382015-10-15T15:09:22.172+01:002015-10-15T15:09:22.172+01:00Anon, the analogy I like is that of sore knees (sp...Anon, the analogy I like is that of sore knees (speaking from personal experience.) With tendonitis, a bit of painkiller/ice and some time taking it easy, and your knee is good as new. If you tear your ACL, you can give it all the painkillers /time in the world...it still won't repair the damage. Prescribing more Oxyctonin just gets the patient hooked on opiates. At some point, if you want to properly fix the problem, you need to get in and perform surgery. The problem is, the surgeons are currently all in the break room having a punch-up over their fantasy football league... Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-33689712530212149252015-10-15T14:58:45.013+01:002015-10-15T14:58:45.013+01:00Time for fiscal policy, for a change. Clearly, mo...Time for fiscal policy, for a change. Clearly, monetary policy is dysfunctional now, as I've pointed out at this forum before. The Central Bankers know this, but one can't blame them for wanting to persist with their policies any more than one can blame a witch doctor for wanting to cure everything with herbs and a prayer... That's all they know. And they'll keep trying it until capitalism itself *fails* (some might argue that this has already happened :)). i^iAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-74825050256479089612015-10-15T14:51:39.209+01:002015-10-15T14:51:39.209+01:00Good questions, Adrem, and that uncertainty is a b...Good questions, Adrem, and that uncertainty is a big reason why the inertial model is favoured. That having been said, regardless of how much of the LF partic. rate is cyclical rather than structural, it is difficult to escape the conclusion that 'substantial progress' has been made.Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-7319351041114580022015-10-15T14:47:34.034+01:002015-10-15T14:47:34.034+01:00Lovely post. But can one really taking any model ...Lovely post. But can one really taking any model seriously that takes the current unemloyment rate of 5.1% as being in any sense meaningful in Phillips curve terms when the U6 cohort is at 10%, the labour participation rate is a 40-year low of 62.4%, and a large mass of the new jobs in this recovery have been education, health and hospitality. As Volcker once said, we cannot run on an economy flipping burgers for each other, or for that matter sticking needles in each other. So what use is this unemloyment ratio as a measure of anything? Anything to do with setting monetary policy? Adremhttps://www.blogger.com/profile/09031356872212265769noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-6735453000543826402015-10-15T14:07:28.441+01:002015-10-15T14:07:28.441+01:00fully sympathise with your rates views....i have f...fully sympathise with your rates views....i have for the second time been stopped out within the last few months...still think this move is exhaustive but thought that 25 bps below as well....had a similar double top before so who knows<br />re impact on equities i just dont think this his plays out like the past few years, valuations already stretched a lot of balance sheet arb done ,faith in CBs shaken. as long as 200d in spoos not taken convincingly i think we make new lows in US equities<br /><br />long dollars i stick with for now esp aud <br /><br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-47510457747756703452015-10-15T14:01:37.653+01:002015-10-15T14:01:37.653+01:00extremely helpful and thoughtful post. is it poss...extremely helpful and thoughtful post. is it possible you can post the actual models you were using (the formulas). Many thanks!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-61443022089768378352015-10-15T13:56:03.557+01:002015-10-15T13:56:03.557+01:00The Kurdia piece may be intellectually interesting...The Kurdia piece may be intellectually interesting, but it just underscores the limits of monetary policy in a stagnant aggregate demand situation coming out of a financial crisis - the solution here is patently not to take rates to -3% and hope that everything is A OK, but to scare congress into doing something in the fiscal arena. Oh who TF am I kidding - on with the chemotherapy.<br /><br />The rates debate is a bit like the gun debate - the vast majority knows the rational solution, and yet everyone believes we are more likely to see elementary school teachers armed with assault rifles before we see a mature discussion on the 2nd amendment. washedupnoreply@blogger.com