tag:blogger.com,1999:blog-34323687.post488201893138296270..comments2024-03-28T00:23:22.838+00:00Comments on Macro Man: RootsMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger35125tag:blogger.com,1999:blog-34323687.post-1710529055418559902009-10-23T13:07:01.946+01:002009-10-23T13:07:01.946+01:00What can I say but "Nice trade"!What can I say but "Nice trade"!Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-23955041727346178852009-10-23T11:20:56.663+01:002009-10-23T11:20:56.663+01:00"And in the London morning, China leaked its ..."And in the London morning, China leaked its September industrial production figure, due to be released tomorrow, at a better than expected 14.1%. You could almost literally hear the risk longs shouting "hip hip hooray!"<br />Regular readers will know that Macro Man has been (incorrectly) fairly sceptical of the green shoots phenomenon and has fought the equity rally (if not position-wise, at least intellectually) for much of the way up. " - Macroman, at least you admit when you're wrong. I'll give you credit for that. And to anticipate the vitriol that I received last time - yes I did buy Chinese equities on Oct 08 and sold June 09 on PA (for better or worse my professional mandate is not macro). Money was squarely where my mouth was.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-9911919993097070282009-10-22T10:32:09.545+01:002009-10-22T10:32:09.545+01:00Thanks Nemo,
I guess no.2 is the most likely way...Thanks Nemo, <br /><br />I guess no.2 is the most likely way that it may unfold? Is China like Japan in the 1980s? hmmm...Skippynoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-52641558978825620772009-10-22T10:22:07.989+01:002009-10-22T10:22:07.989+01:00I've seen a couple of crappy real estate cycle...I've seen a couple of crappy real estate cycles now and the games not over until 1) Banks can't raise capital (Kazakhstan 07) and thus can't continue pyramiding up 2) Assets can't service interest payments (Japan early 90s) or 3) Some external shock in banks balance sheets (exporters getting seriously hit in a trade war?) causes flow on effects. I don't think we're at 1 by any means, 2 seems to be skinny but ok for now and 3 hasn't happened yet. I think the most important thing is to just know what to look for as the margin of safety gets thinner and thinner.Nemo Incognitohttps://www.blogger.com/profile/07345185457108156269noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-53000450616383551162009-10-22T10:12:51.472+01:002009-10-22T10:12:51.472+01:00Good point Nemo, I guess it is pretty obvious that...Good point Nemo, I guess it is pretty obvious that China's growth is driven by FAI, construction and exports. But it is (from memory) the only country in the world apart from LAOS that doesn't publish expenditure-breakdown of GDP. And where the consensus is always within 0.1% of the actual outcome. I am surprised that Goldman missed the forecast by 0.6%<br /><br />I guess the important point (for equity and commodity markets) is if or when China's property market might correct? Or if the policymakers choose to tighten loan growth? Or if the SOE's property and infrastructure investments are going to implode into bad loans?Skippynoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-16190041199695580172009-10-22T06:21:18.769+01:002009-10-22T06:21:18.769+01:00Looking at the FAI number in China it is pretty da...Looking at the FAI number in China it is pretty darn clear where this growth is coming from (SOEs, government). I'm already hearing pretty retarded stories viz a viz RE lending in Beijing: 55% LTV (LTV is nuts to start with) on the asset, another 25% at the single asset corporate holdco. Last time I saw this kind of stuff I was in Kazakhstan in early 2007.Nemo Incognitohttps://www.blogger.com/profile/07345185457108156269noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-53230736427212342172009-10-22T03:38:01.831+01:002009-10-22T03:38:01.831+01:008.9%...hmmmm
Carbonsink. Completely agree, it is...8.9%...hmmmm <br /><br />Carbonsink. Completely agree, it is disturbing that the RBA and the Treasury believe so strongly in regional growth diverence. If Michael Pettis is even half right they may be in for a rude wake-up call...one day.Skippynoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-9055577859036309252009-10-22T01:18:52.614+01:002009-10-22T01:18:52.614+01:00Skippy, unfortunately the cheerleading types inclu...Skippy, unfortunately the cheerleading types include Glenn Stevens and <a href="http://news.brisbanetimes.com.au/breaking-news-national/skills-shortage-issue-looming-henry-20091021-h91z.html" rel="nofollow">Ken Henry</a>. If only they read some <a href="http://mpettis.com/2009/10/china%E2%80%99s-september-data-suggest-that-the-long-term-overcapacity-problem-is-only-intensifying/" rel="nofollow">Michael Pettis</a> occasionally.carbonsinknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-43644129976866739932009-10-22T00:25:42.487+01:002009-10-22T00:25:42.487+01:00Nasty close on the S&P.
The reaction to Chin...Nasty close on the S&P. <br /><br />The reaction to China's Q3 data may be interesting out here in Asia today (no doubt the cheerleading types will celebrate the remarkable recovery). It is rumoured to be 9.1% year-on-year and that's probably what it will be. Of course, there is no breakdown on the expenditure side, so we have no real idea what the underlying trends in the economy are. <br /><br />Is there any private sector investment?Skippynoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-88742286951804115782009-10-21T23:55:15.183+01:002009-10-21T23:55:15.183+01:00MM 9PM
As I said in post 2 on the thread the volu...MM 9PM<br /><br />As I said in post 2 on the thread the volumes over the last week suck of distribution.<br />The weak dollar play is very heavily concentrated in the comms and will not necessarily support broad stocks at this point when that very action is going to result in higher input costs for alot of sectors and in an economy which is struggling to find any pass through on those costs.<br />I'd say seasonlity this year is going to be stood on it's head once again.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-70766984838904505132009-10-21T21:21:47.489+01:002009-10-21T21:21:47.489+01:00Check out that last hour volume, ursine dudes...Check out that last hour volume, ursine dudes...leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-47277342248402338462009-10-21T21:16:40.698+01:002009-10-21T21:16:40.698+01:00On the S&P drop, weak dollar / bonds may be hi...On the S&P drop, weak dollar / bonds may be hitting critical mass. Also I think you can link consumer confidence to crude, which is up $10 MoM.Stevenoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-47466024890107160642009-10-21T21:12:11.462+01:002009-10-21T21:12:11.462+01:00Pay limits at TARP recipients spoiling Xmas plans ...Pay limits at TARP recipients spoiling Xmas plans on Park Avenue. Dick Bove downgrades WFC. NY State is broke. Or the old SPX 1100 EUR 1.50 technical levels. <br /><br />Take yer pick, me old China.leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-51594109438012507902009-10-21T21:00:18.550+01:002009-10-21T21:00:18.550+01:00WTF? Seriously, I eat my dinner and the spooz dro...WTF? Seriously, I eat my dinner and the spooz drop 17 points. What gives?Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-36333870951906252232009-10-21T20:53:02.641+01:002009-10-21T20:53:02.641+01:00OOOH, Macro Man, they are throwing ALL the toys ou...OOOH, Macro Man, they are throwing ALL the toys out of the pram here in New York this afternoon.<br /><br />This might call for a song later...leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-23105273856394209162009-10-21T20:39:27.824+01:002009-10-21T20:39:27.824+01:00It's begun. Pay limits. Merv the Swerve talkin...It's begun. Pay limits. Merv the Swerve talking about bank break-ups. SELL 'EM LLOYD....leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-58631784501850491812009-10-21T20:33:42.825+01:002009-10-21T20:33:42.825+01:00darth trader: No idea if I'm right or not, bu...darth trader: No idea if I'm right or not, but it's that widespread belief (that the downside was so bad, that the upside will be so good) that's giving me comfort in holding the opposite view.<br /><br />I think the previous drops were business cycle recessions, which have a natural end (which was generally aided by some debt and auto/home buying) to help produce the charge out of those recessions. If this one's a result of credit issues (as opposed to a normal business cycle), then I'm not sure using the previous recessions is a good guide.Our Man in NYChttps://www.blogger.com/profile/05354882944509890790noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-2807440379084537752009-10-21T20:19:38.560+01:002009-10-21T20:19:38.560+01:00Here's another newbie question for the blog:
...Here's another newbie question for the blog:<br /><br />When a market strategist says the S&P500 (or whatever index) is priced to assume 4% growth next year...<br /><br />How is that 4% (or whatever rate) calculated? Why does 1000 S&P imply the market is pricing in any particular rate of growth?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-13051655658733048782009-10-21T19:14:53.606+01:002009-10-21T19:14:53.606+01:00This new government in Tokyo could find itself the...This new government in Tokyo could find itself the spark that lights the fuse for the next crisis. How do you say: "bond vigilante" in Japanese?leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-25179238428128359692009-10-21T18:33:08.091+01:002009-10-21T18:33:08.091+01:00MM, any thoughts on short JGB/JPY trades? There i...MM, any thoughts on short JGB/JPY trades? There is a noticeable momentum in the last 3 weeks that has built up (in terms of "smart money" betting on this). Do you think that the market is at a point where it just "accepts" that Japan is in perma-deflation and 10yr JGBs yield 1.5% or wherever they are atm, without noticing how bad the government fiscal position is now and how quickly it will get worse? <br /><br />My own personal thought is that apart from keeping an eye on the salient charts and long dated vols you could wait a while for the "recognition point" when the P&L starts ringing. But, having been wrong on most things for several months....I best keep those opinions to myselfAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-62300529733471748292009-10-21T17:55:15.142+01:002009-10-21T17:55:15.142+01:00Not complaining because I'm in it, but those E...Not complaining because I'm in it, but those EM high inflation prints could be coming sooner rather than later (and i should probs be taking some risk off as per MM's post today on the equity side). Is is just me or did cycle get compressed?Nemo Incognitohttps://www.blogger.com/profile/07345185457108156269noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-49559070910797600662009-10-21T17:27:56.465+01:002009-10-21T17:27:56.465+01:00Chinese industrial production doncha know, Nemo. ...Chinese industrial production doncha know, Nemo. It's up, so the Wangs eat more, so they import more of Indiana's finest, so corn and wheat are up 3%, overnight. All very logical.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-1822261485720930572009-10-21T16:56:54.155+01:002009-10-21T16:56:54.155+01:00Agriculture. WTF. Again.Agriculture. WTF. Again.Nemo Incognitohttps://www.blogger.com/profile/07345185457108156269noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-19641975544137419592009-10-21T16:15:30.544+01:002009-10-21T16:15:30.544+01:00Dave Rosenberg makes the point today that the rece...Dave Rosenberg makes the point today that the recent PPI print, declining 0.6% MOM, could be a sign that margins are actually being squeezed, given recent -$ and +commod moves. PPI ex food and energy was weak too.<br /><br />Another economic boutique argues for a continued rally in SPUs due to increasing margins, the reason being a 2% drop in labor costs. I question the reasoning though, seems they are "econometrically" holding all else equal, and a 2% drop in labor costs could be a harbinger of nasty effects elsewhere.Stevenoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-66449265930812518112009-10-21T15:25:47.881+01:002009-10-21T15:25:47.881+01:00thanks.thanks.Nemo Incognitohttps://www.blogger.com/profile/07345185457108156269noreply@blogger.com