tag:blogger.com,1999:blog-34323687.post7260722920786313595..comments2024-03-19T03:05:57.184+00:00Comments on Macro Man: Getting a fix on the VIX Macro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger45125tag:blogger.com,1999:blog-34323687.post-50652527804095934072017-02-28T10:56:40.640+00:002017-02-28T10:56:40.640+00:00Actually would kids of today know what PTO means? ...Actually would kids of today know what PTO means? never have to do it with an email. Polemichttps://www.blogger.com/profile/05985506596290073453noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-21849632299305872922017-02-28T10:55:19.232+00:002017-02-28T10:55:19.232+00:00Posted
.. PTOPosted<br /> .. PTOPolemichttps://www.blogger.com/profile/05985506596290073453noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-62321906004640371202017-02-28T10:40:58.394+00:002017-02-28T10:40:58.394+00:00Get it up ;)! Get it up ;)! CVhttps://www.blogger.com/profile/16843402165210120665noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-45373384491640679532017-02-28T06:57:02.458+00:002017-02-28T06:57:02.458+00:00Hey guys,
I left a new post with MM and Abee yest...Hey guys,<br /><br />I left a new post with MM and Abee yesterday by email, assume both are busy - can someone (Pol?) get it posted for me while I am in transit today? Like most chart pieces, it is a bit time-sensitive... TVM!<br /><br />LBLeftbackhttps://www.blogger.com/profile/07728096415928915882noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-21089982288893861982017-02-28T04:58:15.680+00:002017-02-28T04:58:15.680+00:00Highest VIX close since 1/19/17. First time VIX 8 ...Highest VIX close since 1/19/17. First time VIX 8 dsma crossed over and closed above 50 dsma since 11/16/16.IPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-17725399956764709172017-02-27T21:05:31.582+00:002017-02-27T21:05:31.582+00:00How are your equity shorts looking guys?
Enjoying...How are your equity shorts looking guys?<br /><br />Enjoying your margin calls??? lolAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-64657814435951670432017-02-27T20:11:54.276+00:002017-02-27T20:11:54.276+00:00Some weeks ago, I pushed back against the long bon...Some weeks ago, I pushed back against the long bond thesis, pointing to obvious momentum in the ultra-long end in Japan and Germany. Can't really make that argument any longer. 30Y JGB looks to have broken its trend. Some attributing to the seasonal pickup in lifer's purchases into fiscal year-end. Also, BoJ upped its 10Y+ purchases a bit. I suppose French polls are the ready explanation for the bund breaking its trend.<br /><br />At the time, I also pointed to momentum in US inflation break-evens. While the short-end continues to price higher inflation, it's worth noting that the 5Y 5Y forward break-even rate has also lost momentum. Real rates meanwhile peaked out in December.<br /><br />What might "reciprocal taxes" mean for rates? Higher break-evens, but lower real rates, IMO. Bannon's "economic nationalism" may work for a developing country (if done right, like Korea did it), but it's probably likelier to make a developed country more like Argentina.<br />johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-20562153508577261782017-02-27T08:20:43.606+00:002017-02-27T08:20:43.606+00:00great post johno
and yeah if you want to short US...great post johno<br /><br />and yeah if you want to short USD you might as well long one of the worst destroyed currencies around: TRY. USD might not come down but TRY has a lot to retrace upNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-20207992847749030942017-02-26T22:29:35.088+00:002017-02-26T22:29:35.088+00:00So, what we know is 1) House's BAT is a hard s...So, what we know is 1) House's BAT is a hard sell and the White House has its reservations, 2) Trump favors some form of border tax, 3) Mnuchin this morning told Fox News they're looking at a "reciprocity tax." OK, so how do we define reciprocity? There are tariffs and there are VAT tax regimes.<br /><br />JPM's Feb 22 Eye of the Market had a great graph plotting tariff applied by the US and tariff applied to the US ("simple average of tariffs on traded goods). The line where the two are equal is the "reciprocity line." Viewed this way, countries like CAD, CLP, ILS, JPY, NOK, EUR, TUR, SGD are on the line or aren't too off-side. RUB, IDR, KRW, COP are modestly off-side. THB, CNY, INR, BRL, ARS are all way off-side. To the extent a country does lots of trade with the US and is more off-side, you'd expect more currency depreciation versus those countries' currencies, no??<br /><br />If reciprocity taxes account for countries with VAT taxes (with rebates for exports), then Europe (20-ish, both in the eurozone and countries like GBP, NOK, SEK) is coming under the cosh. China too, at 17%. TWD, THB, KRW are moderately off-side with VATs are 5,7, 10%, respectively. JPY is at 8% (consumption tax). MXN has the IVA at 16%.<br /><br />So, if countries with larger bi-lateral surpluses with the US (as % of the country's GDP) and higher tariffs/VAT taxes are going to have to adjust most, then you can do some ranking. Anyone seen a good analysis along these lines? Anyone think the above approach is too facile and have a better way to look at this?<br /><br />On a related note, some have said, "It's obvious that Trump wants a weak dollar," and seem to think that settles the matter. There's only so much jawboning Trump can do, and if he realizes this, then his best option may be a "fiscal devaluation" through "reciprocal taxes" that ironically cause nominal appreciation of the dollar. Just a warning to the "Trump equals weak dollar" folks -- you could be right but get killed on dollar shorts.<br /><br />As for me, I was thinking US trade objectives might be solved in part by nominal appreciation of managed currencies, but last week's comments had me close out that trade, luckily in-the-money. My only dollar short is -USDTRY.<br /><br />johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-65091342472751797272017-02-26T16:46:39.937+00:002017-02-26T16:46:39.937+00:00Crickets...
We've discussed this at length he...Crickets...<br /><br />We've discussed this at length here, but things may be picking up in a bad way for lower end shopping malls. JCP announced it will close 140 stores. It's a huge tenant and this will demolish any hope of stabilization.<br /><br />Also, it looks like the wheels are about to come off the multifamily construction wagon. The conventional bank lending is down big time over the last few months and the developers are now scrambling to find alternative funding for the new projects. Saturation is the main reason. Some guys are saying it's the worst they've seen since 2008. Let's not forget about how important the multifamily construction has been for plugging the hole a single-family downturn created. <br />Speaking of which, Friday new home sales report was a miss and three previous months were revised lower. Also, anecdotal evidence now strongly suggests that Chinese buyers have completely dried up in California.<br /><br />AIA architectural billings index contracted in Jan (sub 50). Need a few more down months though in order for the trend to develop. CRE space may be starting to tell us something here. Where are the animal spirits and the anticipation of new infrastructure spending? Could be a combination of higher interest rates, fear over possible loss of tax credits (due to upcoming tax reform), and waning demand. It would be ironic if the sector which president specialized in takes a dive during his tenure.<br /><br />Back to sleep, fantasy dream...<br />IPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-50433062407616055122017-02-25T15:47:17.019+00:002017-02-25T15:47:17.019+00:00Trump called stock market a "big, fat, ugly b...Trump called stock market a "big, fat, ugly bubble" on several occasions in summer/fall of 2016. Now he talks/tweets about Dow records every day (including this morning) and hires an economist who said back in 1999 that it's going to 36K within a few years. What could possibly go wrong?<br /><br />http://www.vox.com/policy-and-politics/2017/2/25/14728622/kevin-hassett-cea-economic-advisersIPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-87763834408837943172017-02-25T06:56:44.963+00:002017-02-25T06:56:44.963+00:00abee, agree with you, they are a roll-up waiting t...abee, agree with you, they are a roll-up waiting to blow up. Chambers has been buying shit for pretty much everything new they sold for years. Current CEO will do the same until they swallow something toxic. It does not look like a bad time to sell. The stock is peeking its head above 2007 highs and I think there are massive (I sound like Trump) stops above. When those clear and price suffocates above monthly upper bb and runs into the upper trend line of the channel going back to 2011, the gravity will pull it down to the bottom of the channel. It's gonna hurt ;)<br /><br />Even more confusion over BAT.<br /><br />http://www.investors.com/politics/white-house-opposes-house-gop-border-tax-plan-retailers-rally/<br /><br />Does not look like Rex got a warm reception south of the border.<br /><br />http://www.newsweek.com/donald-trump-mexico-border-wall-wall-border-tax-560696IPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-3250767082961926442017-02-25T06:23:17.549+00:002017-02-25T06:23:17.549+00:00IPA, re Csco they just buy shit for saas. They are...IPA, re Csco they just buy shit for saas. They are a dinosaur, imo. Just a matter of time before sdn makes all their expensive switches obsolete. But timing is tough bc it's still seen as a value stock and they are managing to beat. When they start missing it will get fun. I need to stay short otherwise I lose track with the million other things going on in the market. Like Japanese long rates going up and up along with small cap stocks there. Along with India I think those are 2 good equity markets this year, and for a few years still. <br /><br />Commodities slowly looking like they are turning but tough to tell. Xle getting hit and big cap miners taking a breather at least. Maybe we need to wait till after China congress. abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-26828296919246071732017-02-25T00:38:56.925+00:002017-02-25T00:38:56.925+00:00While buybacks are still the lynchpin to the bull ...While buybacks are still the lynchpin to the bull market IMO, I did find the points made in this week's Flows and Liquidity piece by JPM interesting. In a nutshell, retail flows via ETFs have been driving the markets YTD (flows at annualized rate 6x larger than last year). In light of the end-of-day run-ups we've seen in the market, I also found this observation interesting: "Passive funds typically rebalance at the end of the day because transacting at the closing price better aligns the performance of passive funds to the performance of the index they track.... Indeed YTD 37% of the NYSE trading volume took place during the last 30 mins of trading."<br /><br />W/r/t long rates, LB will find an excellent commentary that probably fits his view here: https://globalmacrotrading.wordpress.com/<br /><br />IPA, thanks for the heads up on the Cohn breakfast comment. Wonder whether this just means the White House will have its own version of BAT, but a BAT nevertheless.<br /><br /><br />johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-84052805515727811772017-02-24T20:45:52.777+00:002017-02-24T20:45:52.777+00:00abee, agree about NTAP and CSCO. Datacenter space ...abee, agree about NTAP and CSCO. Datacenter space is very crowded and extremely competitive and they were behind on their product refresh. Supposedly, both are about caught up with what is going on and probably why their stocks are out of the gutter. Cloud storage is going to give NTAP a lot of trouble in the future. CSCO SaaS strategy keeps them going for now, but there are many players that are better and more advanced in the space. I see some future consolidation in that whole part of tech industry, and probably benefiting CSCO more out of the two we are discussing. I have no position in either one.IPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-19336792224720850182017-02-24T19:44:39.101+00:002017-02-24T19:44:39.101+00:00IPA, I am short NVDA from much lower. Think its to...IPA, I am short NVDA from much lower. Think its too much hype (deep learning etc is for real but most of NVDA's earnings are for gaming still) they have margins and PE that is unreal for a semi. Its more of an intellectual bet for me. Though I should have added at the double top.. <br /><br />you follow NTAP? along with CSCO they are IMO doomed but for some reason the market wants to pay up for them now<br />abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-80369543919292196642017-02-24T18:26:38.586+00:002017-02-24T18:26:38.586+00:00johno, when I am speaking of BAT coming I mean the...johno, when I am speaking of BAT coming I mean the nasty congressional debate and Ryan proposal of it and not the actual passage. As you can see today, the retail stocks are rebounding on some pushback this morning by Cohn. Do we know that Cohn is speaking on behalf of Trump or just for himself? This is so confusing already and we are not even sure what the whole thing is going to look like. I say longs have to be worried if BAT is DOA then the whole tax reform may be in trouble, especially if Ryan and Trump are at odds and a fight breaks out.<br /><br />abee, NVDA double top trade was a blessing. A big short publicly covered this morning and it gave the stock a brief relief. I say it goes lower still, last scaleout target is 87. This said, if Naz decides to really fall out of bed one day, there is a juicy gap below @ 68. Half of that gap fill coincides with 200 dsma @ 73.IPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-10130315041876058312017-02-24T17:31:24.478+00:002017-02-24T17:31:24.478+00:00@Thud - in theory the dollar should track capital ...@Thud - in theory the dollar should track capital flows (i.e. demand for US assets) in the short term and real rate differentials in the long term - the latter is what I would call the fundamental underpinning and the former the flow, or speculative underpinning.<br /><br />Given that background, if a BAT is imposed it could cause re-shoring leading to demand for USD from a capex perspective - but thats not even 25% of the total picture - what would be the impact on inflation? If we are at full employment and productivity stays low then its highly inflationary which keeps real rates down - if there is more automation then it defeats the entire purpose and trump gets treated like a rag doll eventually. Dodd frank unwinds could sharply reduce the demand for treasuries as collateral at banks globally - these repressive requirements have in my opinion been responsible for a full 100 bps underpricing of 10 yr yields relative to fair value. That would have valuation consequences, which would then impact the demand for US assets also.<br /><br />Thats a very long way of saying no one has a f@#ng clue what the dollar would do, and the assumptions that ryan's crew is making are laughably simple minded - bear in mind there are only 2 places left in the world where capex can actually lead to both higher real growth and higher inflation, and those are India and africa - they both have hosts of other issues. For OECD the only hope for that kind of reflationary growth was skilled high income migration, and the prospects for that don't look that great politically do they?<br /><br />The way I see it Trump's economic plan (if one can call a series of brain farts a plan) results in stagflation with higher bond yields and whatever else that may imply.washeduphttps://www.blogger.com/profile/16030821372993949213noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-61826731742137549262017-02-24T17:16:46.128+00:002017-02-24T17:16:46.128+00:00thud, I don't have a view on that, yet. Bank r...thud, I don't have a view on that, yet. Bank research I've read argues for a smaller adjustment in the USD than that theoretically required to keep import prices unchanged. As for speed, who knows. The Reuters article suggests Trump buys the argument that this creates jobs and that he's for border taxes in some form. Markets have dismissed that (Asia was more focused on Mnuchin's comments on China and talk-down of growth expectations/rates), perhaps reflecting the difficulty getting this passed in the Senate. However, let's say it's not part of the tax plan. Trump still has the authority to implement tariffs, although there are limitations on broad across-the-board tariffs as I recall. NY Fed, by the way, was out with research today showing that BAT will raise the prices of everything. But then, does Trump care, or like Michael Gove, has he "had enough of the experts."<br /><br />Jadot throws support behind Hamon. Melenchon saying he's open to talks with Hamon, but hardly seems genuine. Still seems very unlikely Hamon can make 2nd round. Someone asked recently why German rates are rallying so hard. Zerohedge summarized a Citi report, talking about the required buying by the ECB this year. The other explanation is the market pricing re-domination risk. Where does new DEM trade versus EUR? Let's say +50%. So, you buy scahtz today near -1% and you have a bet that pays 25-to-1 if eurozone breaks up in the next two years. Maybe not ridiculous. I will note however that odds of Le Pen winning *and* gaining a parliamentary majority are seen as extremely low.<br /><br />Celeraiac1972, thanks for that article. How much the still heavy pace of buybacks can push the market is going to depend on fund flows too, which certainly have NOT been driving this market up. All this said, I'm not advocating getting long the market here. China will slowdown by 2018 and Trump may cause a recession the same year by pursuing Bannon's "economic nationalism."<br /><br />johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-42335083851963839562017-02-24T16:36:57.385+00:002017-02-24T16:36:57.385+00:00@johno (re: currency plays in a BAT scenario) - Wh...@johno (re: currency plays in a BAT scenario) - What's your view on the speed of USD appreciation following a border tax? I think this is something that's relatively overlooked, as a rapid appreciation presumably offsets the tax on importers. Too simplistic to leave it as such, but that's how it's being sold to the committees (and the public). Obviously the big retailers are opining that a currency offset won't happen soon enough.<br /><br />I guess this is really a question for everyone here... johno just introduced the topic.thudhttps://www.blogger.com/profile/12646899230431035396noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-3148265751894901162017-02-24T09:52:59.057+00:002017-02-24T09:52:59.057+00:00WSJ has a good piece on buybacks: https://www.wsj....WSJ has a good piece on buybacks: https://www.wsj.com/articles/economy-up-stocks-down-dont-be-surprised-1487684070<br /><br />Key points:<br />1. Factset data shows buybacks declining for several quarters<br />2. A company now has to spend about $1.34 of its earnings to repurchase as many shares as $1 did in February 2012<br /><br />My sense is that we don't need to wait for a spike in rates and/or recession. There are enough factors in place already.Celeriac1972https://www.blogger.com/profile/15149056185371253333noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-84650141299292592632017-02-24T09:42:41.486+00:002017-02-24T09:42:41.486+00:00looks like someone was preparing the assassination...looks like someone was preparing the assassination of Geert Wilders<br /><br />http://www.reuters.com/article/us-netherlands-election-wilders-idUSKBN1611LB<br /><br />Nicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-82338930659558490872017-02-24T03:27:40.453+00:002017-02-24T03:27:40.453+00:00To answer you, IPA, I still doubt we're gettin...To answer you, IPA, I still doubt we're getting BAT or "a form of tax on the border." But I edged up my probability after today. With BAT, I'd imagine there would be one heck of a margin squeeze and shakeout in retail, and in the end the survivors will be the ones who adopt "Amazon Go"-like technology. Trump will hasten the firing of millions and millions of retail jobs, and after the convulsion and possible recession (as middle class real incomes are squeezed by import inflation), the dollar will have adjusted to negate exporters' competitiveness gains. And for what? To pursue some manufacturing job fetish that a guys who never worked in the sector (Bannon and Trump ) have. And the re-shored manufacturing is going to be done by robots anyway. Because it's just moronic and "so stupid only an intellectual could believe them" (as Sen. Cotton said), I thought BAT would surely be stopped by Cohn/Mnuchin/Ross and we'd only see targeted tariffs, but p(wrong) is now higher. Of course, I could probably be wrong about the whole chain of events following BAT. After all, nothing that bad could possibly happen? (paraphrased from my favorite line in the Big Short when someone was asked whether there could be housing crash)<br /><br />There will probably be phase-ins and/or some mess of exemptions to "border taxes." Trump has enough intelligent people in that administration who will object to some tax plan that would send the economy into recession.<br /><br />On the US stock market, a favorite topic here, I saw a great chart in a DB "Asset Allocation" piece from earlier this month. It's of (cumulative since Dec '09) US fund flows and net equity buybacks. Basically fund flows have been flat all these years while net equity buybacks are a straight line from lower left to upper right. To those who are short the market, Green Day (not especially a fan, but a catchy song) asks "Do You Know Your Enemy?" Buybacks. When do buybacks end? Spike in rates and/or recession. Just keeping the conversation balanced here.<br /><br /><br />johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-33624406361581557622017-02-24T01:55:16.033+00:002017-02-24T01:55:16.033+00:00Ipa did you see Nasdaq today. Nvda short term doub...Ipa did you see Nasdaq today. Nvda short term double top. Same with tesla. Expensive stocks have topped ? But financials still strong. Crazy. Meanwhile retail is crazy. L brands guiding down big time. Something not right. <br /><br />For materials Chinese related commodities still making new highs so I am cautious. Insane imo. But not jumping the gun. abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-83237779275407042602017-02-24T00:31:03.499+00:002017-02-24T00:31:03.499+00:00Anyone still thinking we get no BAT? Sell retailer...Anyone still thinking we get no BAT? Sell retailers hard and systematically. Sell retail REITs like crazy too. End of story. You know its coming. They are out there in Mexico putting the fires out. Trump talked to Canadian pretty boy today. XRT is gonna make some noise in the next few weeks. Can it take the whole market down with it? Transports are scared as s#!t. XLY daily outside reversal.<br /><br />Oh, and no infrastructure plan this year. What a surprise :) Sell materials, XLB is gonna puke. Check out the daily engulfing on it and XLI. This should get pretty interesting fast.IPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.com