tag:blogger.com,1999:blog-34323687.post655490868577139121..comments2024-03-28T12:22:11.704+00:00Comments on Macro Man: TMM’s Guide to Macro TouristsMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger17125tag:blogger.com,1999:blog-34323687.post-56266135284087011032012-09-02T15:41:23.972+01:002012-09-02T15:41:23.972+01:00One other category of macro tourist - the speciali...One other category of macro tourist - the specialist rates/FX RV trader or quasi-arbitrageur who sees some other asset class experiencing a major macro-driven bull or bear market, and tries to hop on board.<br /><br />P.S. quick definition of macro trading - any position where your P&L is driven primarily by macroeconomic factors. E.g. short copper or Italian mid-range fashion brands because China starts slowing down. Anyone who thinks macro is just rates/FX is misunderstanding the term. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-92047728492486237262012-08-21T05:37:52.480+01:002012-08-21T05:37:52.480+01:00Anon @ 1.33 - agree with broad point. I guess what...Anon @ 1.33 - agree with broad point. I guess what this highlights is the difference in strategy/horizon between sell and buy side. I don't just mean HFs tho as of course real money (though often wrong (timing issues), is capable of moving the market much more than fast money...BCPnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-18575531551126872372012-08-20T16:19:13.872+01:002012-08-20T16:19:13.872+01:00But market appears to be driven by hedger's fl...But market appears to be driven by hedger's flow rather than risk taking flow. Polemichttps://www.blogger.com/profile/05985506596290073453noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-81454831831045942892012-08-20T16:16:45.896+01:002012-08-20T16:16:45.896+01:00Not at pub LB.. just don t know what to say.. Not at pub LB.. just don t know what to say.. Polemichttps://www.blogger.com/profile/05985506596290073453noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-77473323420691774602012-08-20T16:06:49.874+01:002012-08-20T16:06:49.874+01:00Macro is a bit less exciting than the action on th...Macro is a bit less exciting than the action on the final day of the 3rd Test match, although I don't expect Mangler is watching. I wonder if TMM have already sneaked off down the pub?Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-37092806881460967402012-08-20T15:34:04.785+01:002012-08-20T15:34:04.785+01:00@ Abee ...
Oh dear no ... that would make it muc...@ Abee ... <br /><br />Oh dear no ... that would make it muck too expensive for Germany to borrow. No, no ... we need a reasonable level of alertness so that the core can borrow cheaply enough to make THEIR economies running.<br /><br />ClausCVhttps://www.blogger.com/profile/16843402165210120665noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-71746946672835840792012-08-20T14:57:20.526+01:002012-08-20T14:57:20.526+01:00off topic, now that everyone seems to think things...off topic, now that everyone seems to think things are back to normal, and spanish yields coming down, shouldn't the schatz trade at a slightly positive number...<br /><br /><br /><br />abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-6233071277990804222012-08-20T13:51:52.183+01:002012-08-20T13:51:52.183+01:00Any average knob can call themselves a macro manag...Any average knob can call themselves a macro manager these days, but it's results that count, innit? Speaking as an average knob, one of the things LB has learned here is that understanding of rates is the bedrock of macro, b/c bond markets are huge, and b/c of the intimate and to some degree predictable association between rates and FX. <br /><br />Given that many commodities are leveraged to FX movements (e.g. CADUSD and oil, ZARUSD and gold, AUDJPY and Cu), then we can infer that bonds, FX and commodities are all highly linked, especially so in the era of central bank arbitrage.<br /><br />So then the smallest and least directly connected vehicle is equities, which at certain times of the year (earnings and silly seasons) seem to disconnect completely from macro, enticing the unwary to dabble and dawdle in its labyrinth, only for macro to reassert itself at the most inopportune moments.<br /><br />These moments of macro re-emergence are always associated with a surge in volume, leaving John E Retail scratching his head and wondering what a carry trade is, and why its unwinding could be causing his holdings of "Aggressive Growth Fund", ETeddyBears and China Pig Farms to plummet early in the morning before he has even had chance to put his pants on.<br /><br />Equities are hence the least rational, often most illiquid, and certainly the most emotional asset class, but also can be the most fun on those few occasions when one sees fit to go BOLIVIAN and make a cheeky 25%, e.g. Spain.... Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-24449023412436402612012-08-20T13:33:07.245+01:002012-08-20T13:33:07.245+01:00@BCP,
I think anon at 1:21am may have been being...@BCP, <br /><br />I think anon at 1:21am may have been being using a wee bit of license there for the sake of a laugh.<br /><br />Nonetheless, I tend to agree his or her point, which I think is that it doesn't really matter how they collectively get there, they set the price..... and Gross aint sell side<br /><br />l-t-lAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-26702159937220883292012-08-20T07:51:20.314+01:002012-08-20T07:51:20.314+01:00I did 15y FICC both Trading and Sales roles in AUS...I did 15y FICC both Trading and Sales roles in AUS and UK - I'm here to tell you not many bond traders trade macro (sell side at least). RV is generally more their style. Sure they have macro opinions, who doesn't, but generally, the busier they are, the less likely they are to have a macro view expressed. ie more likely to have a micro rv trade on that only they can spot, and care about.BCPnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-56259101547294253802012-08-20T07:11:51.135+01:002012-08-20T07:11:51.135+01:00C says'
"these down markets are more ofte...C says'<br />"these down markets are more often than not equity driven at the first hand ".<br />I don't think so. Equity downmarkets are an outcome of deteriorating economic conditions ,not the driver for them.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-83160430825375899152012-08-20T05:03:16.755+01:002012-08-20T05:03:16.755+01:00so size matters - i will write that down as the fi...so size matters - i will write that down as the first rule of "macro"<br />you must be bigAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-29434185884288421852012-08-20T01:21:41.415+01:002012-08-20T01:21:41.415+01:00Anyone who doesn't trade interest rates is not...Anyone who doesn't trade interest rates is not a macro trader. <br /><br />The bond market is the daddy. It sets the price of money for all the tourists. <br /><br />It's full of nasty people who make no friends. The people in it (Gross excepted) generally do not publicise themselves because they are selfish, don't care what others think and have a range of personality issues best kept to themselves. <br /><br />Any newbie is welcomed into the stock market because people want their commissions. Credit is welcoming also because it offers new people a place for banks to dump their risk and the information asymetry is large. FX; a low risk place for sell side parasits to do some quick and easy leveraged fleecing.<br /><br />Only in the bond market does a customer ring up looking for a price in $10m on-the-runs and get told by a trader to **** off and stop wasting their time. <br /><br />Ever wandered into a bookshop (remember those?) and wondered why the "finance" shelves are overflowing with tomes on stocks and commodities etc yet there is nothing to educate yourself about the 10 yr ? Because no one who trades it can be bothered to write a book..... what can you say about interest rates except that they set the price. <br /><br />All these "tourists" can dance around the edges all they like looking for new and inventive ways to "trade the macro" .... bond traders are too busy just doing it. <br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-58826286128111020562012-08-19T18:56:18.443+01:002012-08-19T18:56:18.443+01:00Completely off topic, but, TMM and others, do you ...Completely off topic, but, TMM and others, do you have a book to recommend on fixed income investing? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-8859376914833012182012-08-19T15:04:13.429+01:002012-08-19T15:04:13.429+01:00FWIW folks my background is in credit but EM credi...FWIW folks my background is in credit but EM credit - ie if you don't understand sovereign risk properly you don't last that long. <br /><br />I don't think there's anything in macro per se that can't be learnt relatively easily but you do have to specialize. I don't purport to be any great expert in rates arbitrage and other members of TMM don't do long short or even sector basket trades. <br /><br />The moral of the story is that a little bit of macro helps just about anything - trying to trade something you've been at for 6 months and then make a big fuss about on bloomberg however brings to mind the story of Icarus. Nemo Incognitohttps://www.blogger.com/profile/07345185457108156269noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-71732878958754395442012-08-19T07:34:14.287+01:002012-08-19T07:34:14.287+01:00I would be interested too .. abee crombie
Who has ...I would be interested too .. abee crombie<br />Who has been lucky enough to start off as a pure macro trader without coming from an asset class <br />Now I am sure I may earn some chords of disdain but I always wondered why rates have to be the bastion of macro - an equity index background i thgt may be of equal if not higher macro standing - in particular the education in hedging against a crash which more often than not is generated first hand in the equity sphere <br />The power of macro and what sets it apart from other styles is our ability to hedge and perform in down markets - and these down markets are more often than not equity driven at the first hand - an education in index risk reversals (aka the tiny puts)as a hedge has to be one of macros most valuable school boy lessonsagreenoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-25067441472845264372012-08-18T16:17:20.094+01:002012-08-18T16:17:20.094+01:00Seems like quite a bit of disdain for anyone who i...Seems like quite a bit of disdain for anyone who is not singularly a macro man... but what exactly is a macro manager. Does he have to work at the world bank and have a PhD like Dow? An obviously bright guy but whose performance has been blah...<br /><br />Watching the old Tudor video, reading soro"s books, and listening to the edge that Caxton had by fed exing European papers to NYC each morning the old school macro guys, IMHO weren't doing anything that couldn't be learned.<br /><br />So today it is different. Hire 30 bank prop traders in different rates and fx and call yourself a macro shop.<br /><br />Trading is all about adapting which u do point out but I don't really know what great skills the current macro champions have ( say bridge water, bh, pharo, comac, Moore, Tudor, Caxton) that can't be learned with a small team of economists, technical traders and rates<br /><br />Perhaps you could fill us in?abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.com