tag:blogger.com,1999:blog-34323687.post5279405446164144973..comments2024-03-29T12:26:35.581+00:00Comments on Macro Man: Party like its 1999 - A Late cycle resurgence Macro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger145125tag:blogger.com,1999:blog-34323687.post-28653916022295539542017-02-16T03:42:15.779+00:002017-02-16T03:42:15.779+00:00there seems to be a lot of gamma shorted above 230...there seems to be a lot of gamma shorted above 2300<br /><br />http://www.zerohedge.com/news/2017-02-15/multi-billion-trade-meltdown-here-reason-markets-inexplicable-surge?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29Nicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-38221800334850655482017-02-16T03:18:48.731+00:002017-02-16T03:18:48.731+00:00well done on the yankee financials Abee! As you sa...well done on the yankee financials Abee! As you saw banks are still dead money in Europe but the US counterparts have already priced in Reagan 2 deregulation and all-out white collar crime for next half term. It's very stretched and whether a 10Y at 4% will help them make money more than it will screw the entire US capital system remains to be debated.<br /><br />on that same note, seeing Goldman perform that much since Trump's election is well, ironic. Didn't they ban their top employees from donating to his campaign? Hell everyone at GS with stock options and vested shares owns him diner. More generally, it sickens me that so many liberals who tweet vomit on Trump are making so much money on current rally. <br /><br />is it ethical to make money on Trump when you call him a prick a maniac and a treator? haha o tempora o mores Nicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-64219392030813385792017-02-15T21:43:58.837+00:002017-02-15T21:43:58.837+00:00@johno: If the tax plan isn't deficit-neutral,...@johno: If the tax plan isn't deficit-neutral, there will be trouble getting it through the Senate (and we're not even talking Democrats at this point, but rather the GOP fiscal conservatives). Perhaps a simpler BAT is still in the framework, because I assume that's an easy way to offset budget impacts.<br /><br />I'm curious how much House and Senate Republicans actually know about Trump's plan.<br /><br />The problems within the administration also warrant some thought as to how much time and effort will be spent on press control/spin, and how much will be spent on campaign promises. I believe a previous poster here mentioned similarities with the Bill Clinton administration... apologies for forgetting his/her name. thudhttps://www.blogger.com/profile/12646899230431035396noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-23315650326225428992017-02-15T20:59:46.416+00:002017-02-15T20:59:46.416+00:00Oh I remember the words "positive" and &...Oh I remember the words "positive" and "productive" coming out of the DTJ's (then pres elect) meeting with tech co's only to be followed by the travel ban affecting those companies and the ensuing open letter/lawsuits/disgust by them about the H1B visas and their affected employees.<br />XRT is up indeed with the whole market cheering the nirvana of impotent Fed and perpetual daily promises of something "phenomenal" in the making. I'll just watch the charts and I am leaning against the aforementioned daily BB/ 50 dsma laminate now on XRT. Discounters are not participating much today, scared of BAT. <br />WMT, BIG, DLTRIPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-2403129593281613632017-02-15T20:45:32.150+00:002017-02-15T20:45:32.150+00:00Lots of ppl asking me lately about financials. Why...Lots of ppl asking me lately about financials. Why aren't we recommending them, should I buy them etc. I expected this last push up and will look to start selling out of a big part of my long term financials position soon. They are just getting expensive. Not time to abandon ship just yet, but me thinks you should be scaling out. Buy low, sell high. <br /><br />Johno, yes MA is heating up, some decent spreads too. LNKD last year was a layup but not many ppl wanted to play it. MJN looks interesting too. abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-23181368939895039632017-02-15T20:07:22.992+00:002017-02-15T20:07:22.992+00:00Answering my own question with the words of AZO...Answering my own question with the words of AZO's CEO, the meeting was "very positive and productive." Not much I could read from his or other CEOs body language, but XRT is +0.75% as I write. Trump also said the tax plan they're working on is "much simpler" and let's recall that he previously described BAT as "too complicated" (though had those comments walked back later). Trump is also under siege, as seen in the Flynn case and now Pudzer. I suppose it's possible BAT is included in the plan being drafted, but not something I'd bet on. In fact, I'm running the least USD exposure currently since 2010.<br />One implication of no BAT would be difficulty getting the tax rate down to the 15-20% rate previously mooted. Analysis I've seen suggests base broadening, etc., can only get the rate down to 25%. Given the S&P's effective tax rate is around there, are taxes really much of a catalyst to stocks? We'll find out. While I'm not short the market here (in fact, my FX exposures make me net long that factor), I'd think it's just better to do merger arbitrage at this point in the cycle than be long. Buy Mead Johnson and go to the beach?<br /><br /><br /><br /><br />johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-7985708095711246792017-02-15T17:20:42.399+00:002017-02-15T17:20:42.399+00:00Dunno johno, sold my tv to cover a margin call. Ju...Dunno johno, sold my tv to cover a margin call. Just watching the charts. Went red after the meeting adjourned. If retailers can't rally on good retail sales report then there must be a lot of pain for them ahead.IPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-40526400565443725572017-02-15T16:29:00.005+00:002017-02-15T16:29:00.005+00:00Anyone have color on how Trump's meeting with ...Anyone have color on how Trump's meeting with retailers is going/went? Body language? Smiles coming out of the meeting? XRT trading up in-line, so nothing untoward there.<br />Big reversal in USD today following the CPI, retail sales data.<br /><br />johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-58137110392291630362017-02-15T11:52:34.723+00:002017-02-15T11:52:34.723+00:00@Nico - you've said a couple of times about &q...@Nico - you've said a couple of times about "retail involvement" in short volatility. Just looking at the 'mug punters' tool of choice....igindex, their client info suggests only 95% of 11-50 of their punters have a long position in the short vix etf svxy. A further 16% of 51-250 customers are short the long vix etf vixy. <br /><br />I suggest this is one of those areas where, if there does get to be a build up of increasing retail involvement, one bad experience will cull the numbers back pretty pronto. Retail is not known for its ability to accept drawdowns. Alhttps://www.blogger.com/profile/14381013196081166483noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-89042578922977242202017-02-15T05:01:58.490+00:002017-02-15T05:01:58.490+00:00#7 Trump administration is considering a plan wher...#7 Trump administration is considering a plan where the US Secretary of Commerce can designate FX manipulation as an unfair subsidy, which to me, means the mercantilists will allow their currencies to appreciate versus USD (anyone who thinks otherwise, PLEASE counter-argue this point as I don't care about being right, but having the right trade on).<br /><br />...am in a bit of a dilemma around this one... the broad arguments you outline make sense... yes, the current US administration fully understands the necessity of having a weak dollar (else all their other policies get negated)... yes, TWD, KRW, THB are most vulnerable because of the size of their current account surplus/GDP ratios... and yes, they can't resist beyond a point because they ignore the US and pivot to China like a PHP did - too much of history there... <br /><br />but the fact remains that none of these countries have a domestic consumption story... so they need the export driven growth... and a stronger currency hurts them... so much as they need to maintain the perception of non-interference, they cannot afford to let specs run away with their TWI... at what point do they say enough is enough... 10.00 on JPYKRW is not an insignificant level...<br />also... at some point the phenomenal (or not) tax plan will come through... fiscal plans and probably border tax as well... and market reaction to that will depend on positioning... unless one has 'Nico-levels' of conviction (I don't, for any trade) one will get stopped out...<br /><br />so yes, I am fairly convinced the logic works... and the trade works... I am just not fully convinced it works today at 1140/30.60/35.00... koolbonghttps://www.blogger.com/profile/09366394948600760367noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-7733889811533696732017-02-15T00:11:53.479+00:002017-02-15T00:11:53.479+00:00You may be turn out right, Nico, but I'm not s...You may be turn out right, Nico, but I'm not sure I'd take "anecdotal evidence" of retail involvement in one ETF as a sign of classic late stage retail euphoria. Looking at the # of units outstanding of XIV, it doesn't look to be bubbling to me. The same Daily Shot publication where XIV was mentioned showed Yale's "one-year confidence" and "buy on dips" readings, and in both cases, institutions are WAY more bullish than retail. Also mutual fund data doesn't show much enthusiam for equities by retail either. I can certainly see a steady corporate bid and easy money continuing to squeeze stocks higher. That said, when the next recession comes, corporations will be highly indebted from buybacks undertaken and we'll likely have a Fed that won't entertain more of the academics' "innovations," like negative rates or money-printing to buy stocks (Cohn, who's already interviewing Fed candidates, thinks that stuff is "absolutely horrible").<br />johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-6519481267971176242017-02-14T23:57:05.760+00:002017-02-14T23:57:05.760+00:00can someone create a new post just to re set the c...can someone create a new post just to re set the comments thread shorter ? thanks Rosscohttps://www.blogger.com/profile/18218092677103028057noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-13098715671926875222017-02-14T23:56:21.416+00:002017-02-14T23:56:21.416+00:00@nico, I totally agree and that is an interesting ...@nico, I totally agree and that is an interesting tidbit on vol<br /><br />to me at least, the relentless drawdown in spot vix and concurrent performance of near month curve trades (rolling down) is even more abnormal that the relentless bid in spoos<br /><br />personally, I only think equity indices become interesting post the afore mentioned reversal in vix<br /><br />a reversal in higher beta credit indices would be a strong confirmation also. When credit turns, given the terminally damaged market microstructure post Volcker, I really wonder who the f they sell it to ??!!<br /><br /> <br /><br />Rosscohttps://www.blogger.com/profile/18218092677103028057noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-681818263220377252017-02-14T23:09:35.365+00:002017-02-14T23:09:35.365+00:00Anecdotal evidence suggests that short volatility ...Anecdotal evidence suggests that short volatility trades have made their way into the retail world. It seems that mom & pop investors are loading up on XIV – an ETN that shorts near-term VIX futures (just as bigger investors have apparently pulled out). The short vol bets have done well. The fact that it’s a derivative contract that lost over half of its value in 2015 over a couple of days doesn’t seem to bother anyone.<br /><br />They're doing it again. Everything is lining up to hurt retail. The young Harrys are actually needed at the end of every bullish cycle, young guys who started traded after last correction and only know up. Considering both time and price, i've changed campaign to 30% correction during Trump's first term. Moving bid down to low 1800s (spoos), buying a house in Hawaii and wishing everybody great luck. <br /><br />At this point it does not matter if we hit 2400 or 2500 and should market press up without one healthy correction, you are getting a serious accident down the road. I was originally playing a 'healthy' 5-7% correction around inauguration date, but we've reached full euphoria now and as the old wolves here know the aforementioned elevator will go down almost EMPTY.<br /><br />Nicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-43648026655348678492017-02-14T22:57:51.115+00:002017-02-14T22:57:51.115+00:00Market takes the stairs up and elevator down. The ...Market takes the stairs up and elevator down. The twits may be bleeding now but the elevator is coming. dfdsfiolhttps://www.blogger.com/profile/09424903490091670724noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-63751450353896492892017-02-14T22:08:31.039+00:002017-02-14T22:08:31.039+00:00Can't believe how many f*ckwits here are still...Can't believe how many f*ckwits here are still short equities and bleeding...<br /><br />Over the past few years I keep reading how macro is under-performing just about everything - judging from many of the comments here I can see why. Incredible.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-1272144137850303962017-02-14T21:45:45.498+00:002017-02-14T21:45:45.498+00:00Quick thoughts on the retailers tomorrow. DJT is m...Quick thoughts on the retailers tomorrow. DJT is meeting with the retail big wigs in am. So they bought them today, naturally. I expect the retail sales before the meeting tomorrow to miss the expectations. This opens an opportunity to short right after the meeting is adjourned unless something "phenomenal" is announced. Thinking is they dump them as they walk out, or at any remote mentioning of BAT, and/or simply for the fact that retail sales are not going to get better no matter what DJT does with corp tax and infrastructure plans. I am already short, but should they ramp up into a laminate of upper bollinger band on daily and 50 dsma I will add to it. <br />For example, the airlines are now retracing back to closes on their meeting day with DJT. Grounded :)IPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-54216992165059526472017-02-14T20:58:09.511+00:002017-02-14T20:58:09.511+00:00Donald started this rally, so it's his to kill...Donald started this rally, so it's his to kill. This Flynn mess is picking up some steam among the ultra-conservative GOP (never mind dems who are all over it now). Who knew what and when? They are scared as shit of contagion, I bet. You can be a bear or a bull here, but you can't be ignorant. Anyone here traded back during the Nixon days? I was too young... As the noise gets bigger, you gotta watch XLF, and most importantly, GS and JPM. The idea is the cabinet gets completely devoured by defending the presidency and loses the fight on everything else.<br /> <br />Interesting is that materials (XLB) have not confirmed the new market highs here and have not gotten back to their respective high made on Jan 26th. I smell a double top.<br /><br />HH, buy a dishwasher. Preferably US made (make America great again).IPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-15265275356339103612017-02-14T20:54:17.910+00:002017-02-14T20:54:17.910+00:00current Paris riots pave the way for le Pen's ...current Paris riots pave the way for le Pen's win - who already met French central bank boss to let him know that Banque de France will be required to print money to facilitate EU exit. La merde is getting realNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-12176963108630634442017-02-14T20:35:36.920+00:002017-02-14T20:35:36.920+00:00One thing I didn't address above: BAT. Bloombe...One thing I didn't address above: BAT. Bloomberg running a story citing a "senior Canadian official" following Trudeau's meeting as saying BAT "coming more from" Ryan than Trump/White House. Frankly, BAT seems VERY risky to me and I question whether Trump/Cohn/Mnuchin are going to trust some economists' views that it'll all work out nicely just because it's beautiful on paper. There's also the issue that it may violate WTO rules and generate a fine that wipes out much of the revenue benefit to Treasury. A VAT plus payroll tax reduction accomplishes the same thing and doesn't violate rules, although brings its own issues.johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-63906513464226143792017-02-14T18:18:21.838+00:002017-02-14T18:18:21.838+00:00Re USD, 1st off, let's get Yellen out of the w...Re USD, 1st off, let's get Yellen out of the way. Market moved up March probability 4% to 34%. The most interesting remark, to me, was the reply to some senator's pointed questions on March, where she said "it" could come in March, May or June. Sounds like she has in mind to raise ONCE in that range of meetings, which doesn't really suggest a much faster pace than expected. EDZ7 is rallying a bit from the lows, seeming to confirm that read.<br />More generally, thinking about the USD, I note a few things. #1 the modal outcome priced by markets is 2 hikes this year. #2 in the SEP, the 5th dot which I take to be Yellen is at 2 hikes. #3 average weekly earnings and ECI both don't suggest much/any pickup in wage inflation. #4 the "dollar shortage" as proxied by LIBOR-OIS or xccy basis swaps is not happening. #5 Gary Cohn is interviewing Fed candidates and I read his March 2016 remarks to mean that the Fed should effectively target a stable dollar and not follow some Taylor-like hard-money path. #6 there is "no daylight" between Mnuchin and Cohn views, so you'll have those guys, probably along with Bannon, arguing against the fiscal/monetary hawk types. Two versus one wins. #7 Trump administration is considering a plan where the US Secretary of Commerce can designate FX manipulation as an unfair subsidy, which to me, means the mercantilists will allow their currencies to appreciate versus USD (anyone who thinks otherwise, PLEASE counter-argue this point as I don't care about being right, but having the right trade on). #8 one corollary of #5 would be a Fed on hold/going slow until global growth converged enough for other global rates to rise. #9 if the Fed goes gangbusters with hikes this year, it will surely look political (especially with average weekly earnings not breaking much higher) and jeopardize its independence at a vulnerable time (Trump plus Republican house and senate!).<br />For all these reasons I'm running my TRY, KRW, TWD, THB against USD.<br /><br />In other news today, Renzi stepped down which means Italian event/election risk is pushed out to the fall, at the earliest, and probably 2018. I would not want to be short EURUSD if Hamon fails to make the 2nd round in France.<br /><br />Oh, my guess is while Abe is saying Trump endorsed the monetary arrow or Abenomics, Kuroda is goners next year and his replacement will quickly undo negative rates.<br /><br /> <br />johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-73411481454638780032017-02-14T17:20:48.818+00:002017-02-14T17:20:48.818+00:00
Henrietta Hindsight is awesome! Sounds like a clo...<br />Henrietta Hindsight is awesome! Sounds like a clown back in 2001 and 2007 at the peak. HH, I hope you know how to take profits. dfdsfiolhttps://www.blogger.com/profile/09424903490091670724noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-6098468472411141702017-02-14T16:50:38.143+00:002017-02-14T16:50:38.143+00:00Stocks unmoved by Yellen's comments, or rates/...Stocks unmoved by Yellen's comments, or rates/USD rise. Equity markets are telling us that if rates rise, equities will keep rising. To put it another way, the market is once again proving me right.<br /><br />Summary: the bears here will lose all their money and much more besides. I will grow rich and if you're lucky will spend some of it providing the "trickle down" effect Yellen hopes for. Now, who wishes to clean my dishes?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-79166146943698468352017-02-14T15:44:19.764+00:002017-02-14T15:44:19.764+00:00Still wanna buy TLT @ 115. GTC order is in.Still wanna buy TLT @ 115. GTC order is in.IPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-75054030456897857122017-02-14T15:14:39.425+00:002017-02-14T15:14:39.425+00:00funny how this wasnt in the red headline on bloomb...funny how this wasnt in the red headline on bloomberg... "As I noted on previous occations". Waiting too long to remove accommodation would be unwiseabee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.com