tag:blogger.com,1999:blog-34323687.post675681778546271303..comments2024-03-29T09:24:42.731+00:00Comments on Macro Man: Thoughts from MadridMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger32125tag:blogger.com,1999:blog-34323687.post-77233135635740734502020-06-02T13:45:27.529+01:002020-06-02T13:45:27.529+01:00I liked the way you explained the subject. Really,...I liked the way you explained the subject. Really, your blog has a lot of stuff. Thank you for sharing such valuable information with us. We also provide such information to Audience. You can also check our blog at once for more information.<br /><b><a href="https://topstockstobuytoday.blogspot.com/2020/06/sbi-and-carlyle-group-plans-to-sell.html" rel="nofollow">SBI Cards IPO</a></b><br /><b><a href="https://stockinvestorfinance.blogspot.com/2020/06/burger-king-india-burger-king-india-ipo.html" rel="nofollow">Burger King</a></b><br /><b><a href="https://mayaaaliyah35.wixsite.com/stockinvestor/post/reliance-general-insurance-withdraws-offer-documents" rel="nofollow">Reliance General Insurance</a></b><br /><b><a href="https://topstockstobuytoday.blogspot.com/2020/06/list-of-upcoming-ipos-in-india-2020.html" rel="nofollow">Upcoming IPOs</a></b>Sadhana shttps://www.blogger.com/profile/00701183041666552283noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-84878693189112086202020-04-29T11:06:40.069+01:002020-04-29T11:06:40.069+01:00This is such a helpful description of and guide to...This is such a helpful description of and guide to, identifying and getting to know more. And also need to figure out some topics related to share market.<br /><b><a href="https://stockinvestor.in/consumer-durables-q4-earnings-preview/" rel="nofollow">HDFC institutional equity</a></b><br /><b><a href="https://stockinvestor.in/hul-q4-results-preview-good-growth/" rel="nofollow">Edelweiss Securities</a></b><br /><b><a href="https://stockinvestor.in/axis-bank-q4-result-net-loss-rs-1388-crore/" rel="nofollow">Axis Bank</a></b><br /><b><a href="https://stockinvestor.in/fy21-hard-for-indusind-brokerages/" rel="nofollow">Kotak Institutional Equities</a></b><br />Sadhanahttps://www.blogger.com/profile/11712892634375363934noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-17776702642219735112008-09-23T18:12:00.000+01:002008-09-23T18:12:00.000+01:00RE, 2 points:a) Europe, rather than the US, is now...RE, 2 points:<BR/><BR/>a) Europe, rather than the US, is now China's largest trade partner, a fact that has emerged in conjunction with the steady appreciation of EUR/RMB (itself at least a partial product of PBOC's direct market activities.) In that vein, China's FX policy could, I believe, be construed as mercantilist in the 18th century sense. I will concede, however, that the object of their FX activities has more to do with maximizing employment than wealth.<BR/><BR/>b) The real point of my jibe was decidedly micro rather than macro. The trading style of Voldemort (i.e., the way they execute their business in non-Chinese currencies in the open market) on occasion bears a striking resemblance to that for which Citi was censured a few years ago.<BR/><BR/>True, FX is an unregulated market, so FSA rules don't apply. Still, it's hard to cry too many tears over Citi's behaviour when their and other FX desks have been on the receiving end of similar behaviour from a sovereign entity.Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-85140235082411623872008-09-23T16:34:00.000+01:002008-09-23T16:34:00.000+01:00I presume that the purpose of your supplementary p...I presume that the purpose of your supplementary paragraph was to wind me up, MM. My response is here: http://reservedplace.blogspot.com/2008/09/mad-about-mercantilism.htmlRebelEconomisthttps://www.blogger.com/profile/13241098878248190971noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-49950632049369894422008-09-23T16:18:00.000+01:002008-09-23T16:18:00.000+01:00RE, my memory was faulty; I thought it was the ECB...RE, my memory was faulty; I thought it was the ECB, not the FSA, that censured Citi.<BR/><BR/>In any event, it's hard for me to accept that Citi did anything wrong when Voldemort and pals have done the same thing with regularity (though lss so in the past couple of months, I'll concede) in foreign exchange.Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-20724712061569023822008-09-23T11:13:00.000+01:002008-09-23T11:13:00.000+01:00Thanks MM. I thought you were implying that the G...Thanks MM. I thought you were implying that the German authorities were fixing the bund market (which would be news to me), but I see you were referring to Citi's abuse in 2004. I have not studied the case in detail, but it struck me at the time that it was more a case of anti-social behaviour by Citi's traders than lax regulation (ie they abused MTS rules that were intended to ensure that all market makers played their part in keeping the market liquid).RebelEconomisthttps://www.blogger.com/profile/13241098878248190971noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-23034321805334068822008-09-22T23:59:00.000+01:002008-09-22T23:59:00.000+01:00I keep wondering when the argument will mature pas...I keep wondering when the argument will mature past the just one more hit, just one more hit! Please I need it!<BR/><BR/>As an irish man, I can easily see the problem here. It's called affordability. And it has little to do with interest rates. We've had the british and american economists/press for years telling us that deregulation was the panacea to all ills. Privatise and deregulate. And guess what, we went from having mortgages of 3.8 times income as an average in 1990 to 10 times income in 2007. It's not a surprise we're in the mess we're in. And if we can't handle 4% interest rates it's an even bigger mess than we know.<BR/><BR/>To be honest I think JCT has done the best he can do, which is little at all. Too much tightening and the euro goes stratospheric, too little and well, there's that compass. He's been hamstrung by the FED, that venerable institution run by free market zealots. Drug dealers to monetary parasites.<BR/><BR/>17 years the US dream of rabid capitalism. 17 years longer than the soviet union. But yeah, it's JCT's fault.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-43600810268195406532008-09-22T23:15:00.000+01:002008-09-22T23:15:00.000+01:00Behold the U.S. Treasury, the world's largest hedg...Behold the U.S. Treasury, the world's largest hedge fund. You will never find a more wretched hive of scum and villainy.<BR/><BR/>But seriously, isn't the mission of the U.S. Treasury Capital Mismanagement Partners to lose money on every trade with every counterparty? <BR/><BR/>Heck, I think I could do that job.<BR/><BR/>I wonder what the compensation structure is?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-16786630341182642562008-09-22T21:59:00.000+01:002008-09-22T21:59:00.000+01:00Gramps --- you're missing a consonant. It'...Gramps --- you're missing a consonant. It's EMU that's the issue, not the EU (viz. one-size-fits-none, as Macro Man pointed out today, and as David De Rosa has been pointing out for >= 10 years). <BR/><BR/>Italy's problems seem to me to be more structural in nature; hopefully CV will chip in on that one.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-10821564675384584702008-09-22T21:48:00.000+01:002008-09-22T21:48:00.000+01:00Get the sound up, cover your equity shorts.....par...Get the sound up, cover your equity shorts.....parteeeeee<BR/><BR/><BR/>http://www.rallymonkey.com/oldvideo.phpAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-56958389870760974642008-09-22T21:39:00.000+01:002008-09-22T21:39:00.000+01:00Gramps, any chance of condensing the posts? There ...Gramps, any chance of condensing the posts? There is too much to read these days and, while you make some good points, it's never easy finding needles in haystacks. PS Keep up the good research and I hope you pass your degree.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-1878816223110391482008-09-22T20:13:00.000+01:002008-09-22T20:13:00.000+01:00"Ultimately, this crisis will expose the weaknesse..."Ultimately, this crisis will expose the weaknesses of both monetary union (one size clearly does NOT fit all)"<BR/><BR/>You know, the US is a monetary union as well, and it isn't perfect either...<BR/><BR/>That said, the Euro has it's issues, but the real problem has to do with governments that cannot stomach to regulate their lending practices. <BR/><BR/>Frugal countries with good balance-sheets will make it through this, the others will have to learn!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-72156352591157044702008-09-22T19:57:00.000+01:002008-09-22T19:57:00.000+01:00Like the description that the US Treas will turn i...Like the description that the US Treas will turn into the world's largest hedge fund under the HP plan. Aargh..Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-31895078192856899122008-09-22T19:28:00.000+01:002008-09-22T19:28:00.000+01:00RE, this link provides a bit of background, though...RE, <A HREF="http://www.fsa.gov.uk/pages/Library/Communication/PR/2005/072.shtml" REL="nofollow">this</A> link provides a bit of background, though I'd forgotten that it was the FSA that actually got their knickers in a twist.<BR/><BR/>With respect to JCT, I do think that the ECB has broadly done a better (if more irritatingly smug) job than the US authorities, at least up until a few months ago. <BR/><BR/>However, their recent rhetoric suggests that they are ill-equipped to deal with changing circumstances...at which point their smugness will come back to haunt them.<BR/><BR/>As I have disclosed before, I am short European equities, so it is more than OK with me if the ECB wants to fixate solely on backward looking data.<BR/><BR/>Ultimately, this crisis will expose the weaknesses of both monetary union (one size clearly does NOT fit all) specifically and inflation targeting more generally. I think that guys like Bollard and Stevens have performed much better in the last couple of years than Trichet, and without the simpering displays every month. (I used to gag at Greenspan's lecturing testimonies as well, FWIW.)Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-6652780567546165162008-09-22T19:22:00.000+01:002008-09-22T19:22:00.000+01:00look at october wti contract, what's happing there...look at october wti contract, what's happing there?<BR/><BR/>U.S. CRUDE FUTURES RISE MORE THAN $24 A BARRELAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-77073315734260879542008-09-22T19:10:00.000+01:002008-09-22T19:10:00.000+01:00Macro Man,I am intrigued by your comment: "just as...Macro Man,<BR/><BR/>I am intrigued by your comment: "just ask anyone on Citi's European government bond desk how "free" the Bund market is, for example". Care to at least hint at what you mean?<BR/><BR/>I think you should give Trichet a break. Perhaps he should have raised the ECB repo rate higher to be rigidly true to the ECB's stated principles, but without more political support, the result might well have been the emasculation of the ECB, and even higher inflation. Duisenberg might have done though.RebelEconomisthttps://www.blogger.com/profile/13241098878248190971noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-76567458497885038812008-09-22T18:01:00.000+01:002008-09-22T18:01:00.000+01:00I agree that the FED really needs to overpay to im...I agree that the FED really needs to overpay to improve the banks balance sheets. However it is possible that takeing some of the crap of the balance sheets could also improve the borrowing costs for the banks who do deceide to accept a sale. In other words the loss of selling below bookvalue could be offset by lower credit spreads and higher margins for that particular institution. If your cost of raising capital drops by a whole percent or more it is going to make a difference to your earnings, hence there might be som incentive to get rid of the worst crap at prices that make sence to both parties.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-74292023439296231832008-09-22T17:35:00.000+01:002008-09-22T17:35:00.000+01:00Actually, the BDE building is from the 1880's (ove...Actually, the BDE building is from the 1880's (oversexed Bourbon simpletons by then in control) - a monument to times long past and never to be repeated. You say they're adding on... Don't like the omen.Charles Butlerhttps://www.blogger.com/profile/00486529931043507880noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-18665553712522501542008-09-22T17:29:00.000+01:002008-09-22T17:29:00.000+01:00whoops, I dismissed M2 as a measure of money, but ...whoops, I dismissed M2 as a measure of money, but didn't explain...<BR/><BR/>M2 was a good measure historically of money supply -- but the proliferation of non-bank banks (GMAC, Dietech, GE Capital) and the securitization of loans has completely blurred the line between traditional reserve banking and investment markets.<BR/><BR/>The money multiplier becomes theoretically infinite when you have significant players in the market that do not have to keep a reserve balance at the central bank.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-30753315223264323652008-09-22T17:26:00.000+01:002008-09-22T17:26:00.000+01:00I don't know how many times I will have to say I c...I don't know how many times I will have to say I concede on Trichet.<BR/><BR/>Its great that M2 has grown by whatever rate in the U.S. versus Europe, but the numbers are not very meaningful in either economic region -- and certainly not comparable.<BR/><BR/>My argument was ONLY that Bernanke (unlike Trichet) decided to bail out Bear Stearns in a manner that puts $29 billion of taxpayer money at risk.<BR/><BR/>Bernanke has taking a sterling Fed balance sheet, 100% US Treasuries -- and replaced it with something that is about 45% Treasuries, 55% crap that no one else wants or will even finance.<BR/><BR/>Paulson is now proposing to turn the US Treasury into the world's largest and most speculative hedge fund.<BR/><BR/>The fact that smart money (Buffet, Carlyle, Blackstone) have passed on this "lucrative" opportunity strongly suggests it isn't very lucrative at all. The smart money won't even cherry pick assets out of the crap.<BR/><BR/>The banks are woefully undercapitalized, and investors understandably don't want to lend money to people who have demonstrated such poor (non existent?) risk management skills.<BR/><BR/>Paulson's plan cannot help the banks, unless he overpays for assets-- meaning the taxpayer takes a massive loss.<BR/><BR/>These failed banks stand to get a windfall, to be paid for by taxpayers who acted prudently.<BR/><BR/>Name a successful sports team that promotes its worst players while benching the best and the average players?<BR/><BR/>Paulson's plan defies common sense, never mind economics. It is anti-meritocracy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-62980884771689574422008-09-22T17:12:00.000+01:002008-09-22T17:12:00.000+01:00@gramps: are you really sure about JCT' courage an...@gramps: are you really sure about JCT' courage and intransigence?<BR/>Measured y-o-y at the last reporting date, the FED's balance sheet was larger by 3.1%, the ECB's by 22%.<BR/>The FED, until a few ago, unlike ECB, is shrinking its US goverment securities holdings...ECB is printing...<BR/>Watching M2, the only comparable money aggregate, since 2003 in US has grown 26%, in Europe 51%: it's double!!!!<BR/>JCT is redirecting attention to matters in which he has no control, but he's not acting on its huge balance sheet.<BR/><BR/>About interest rate, i know that 4.25% it's a ceiling, then we can discuss to infinite and anyone can think differently..Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-7888086690511480522008-09-22T17:05:00.000+01:002008-09-22T17:05:00.000+01:00mw- precisely.CB, the thing that actually struck m...mw- precisely.<BR/><BR/>CB, the thing that actually struck me about Habsburg Madrid was a) how exceedingly unpleasant looking Philip IV was, and b) that they must build a new wing to Banco D'Espana with every financial crisis, given the enormous size of the building. I could swear I saw some cranes arriving from Dubai....Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-20959874046037160842008-09-22T17:02:00.000+01:002008-09-22T17:02:00.000+01:00MW: I am not sure what to say about Ireland and Sp...MW: I am not sure what to say about Ireland and Spain -- although I would argue they are a mistake caused by the EU, not by Trichet. Europe's economy is not uniform or integrated (even now). Lowering rates a few years back to promote growth in Germany/France/Italy arguably over stimulated Ireland and Spain -- and now Europe is paying the price.<BR/><BR/>In any event, I already conceded on Trichet. I was only suggesting that he is no where near as bad as Bernanke / Paulson / Cox.<BR/><BR/>My argument is that the U.S. does not need any more debt. We have way way way too much already.<BR/><BR/>The theory behind lowering rates is to stimulate additional economic activity via additional lending at the margin.<BR/><BR/>Well, I don't know about Europe, but the last thing the U.S. needs is more borrowing.<BR/><BR/>More borrowing doesn't make sense unless you have "surplus" income with which to service the new debt... As it is, many U.S. consumers cannot service their existing debt.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-66446207341159879262008-09-22T16:47:00.000+01:002008-09-22T16:47:00.000+01:00As you walked around the Plaza Mayor and the rest ...As you walked around the Plaza Mayor and the rest of Hapsburg Madrid, I guess you were conscious of the interesting parallel of the 1576 default with the current conundrum - an unwinable war, the educated class exclusively dedicated to lobbying, paper shuffling and bookkeeping, the importing of everything, and the betrayal of the future that was the spending of all of the non-infinite production of Potosí.Charles Butlerhttps://www.blogger.com/profile/00486529931043507880noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-45535072268238552422008-09-22T16:40:00.000+01:002008-09-22T16:40:00.000+01:00"I can only applaud Trichet's courage not to promo..."I can only applaud Trichet's courage not to promote ever increasing amounts of debt by lowering rates."<BR/><BR/>So what happened in Spain and Ireland? You're looking at nominal rates and concluding they're high (as Macro Man already pointed out, real rates, at least based on trailing HICP, are not).Anonymousnoreply@blogger.com