tag:blogger.com,1999:blog-34323687.post7720386058759092675..comments2024-03-28T12:22:11.704+00:00Comments on Macro Man: You wonder why macro isn't making any money?Macro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger34125tag:blogger.com,1999:blog-34323687.post-43577569387985325972014-08-15T17:38:06.923+01:002014-08-15T17:38:06.923+01:00Gordon Bennett, exiting US equity long punt yester...Gordon Bennett, exiting US equity long punt yesterday now appears to be inspired, when it was actually just lazy (take Friday off). <br /><br />To put in perspective what is happening in Eastern Europe, it's a bit like Texas and Oklahoma going to war over the panhandle areas, or Cheshire and Shropshire having a spat over Whitchurch. It simply doesn't make any sense.<br /><br />It's just hard to believe this is sustainable by the Ukrainians alone, unless of course someone else (COUGH: CIA) is out there as "advisors" and the Black Ops crew are supplying the ammo.<br /><br />As a result, bad day for the Treasury shorts. Must be a few of those coming out in body bags by now. I suppose this will also help distract the media from covering US police militarization etc...<br /><br />Expect CNN to leave Ferguson quickly, and to focus on the struggle of the "plucky" Ukrainians as they battle against the might of the "tyrannical" Russian bear, aided and abetted by "freedom-loving" 'Murkins.<br /><br />Effing hell, this is just such a bad and cheaply made re-run of Vietnam, you'd think they could be more creative than this. Fast forward to the last helicopter flight out of Kiev in about ten years as the puppet government finally falls.<br /><br />Total 60s re-run this week. Ferguson looking like the inner city riots of the 60s, Ukraine looking like Vietnam, Iraq just a complete shit-show.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-65778140534283518622014-08-15T17:18:53.981+01:002014-08-15T17:18:53.981+01:00Yup Nico .. in the league of financial poker hands...Yup Nico .. in the league of financial poker hands, WWIII beats a SHS Polemichttps://www.blogger.com/profile/05985506596290073453noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-43476216393594575392014-08-15T16:30:12.628+01:002014-08-15T16:30:12.628+01:00so much for reverse SHS 101...so much for reverse SHS 101...Nicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-13538198359408733222014-08-15T16:18:48.772+01:002014-08-15T16:18:48.772+01:000.968% on German 10yr ... German 3yr now negative ...0.968% on German 10yr ... German 3yr now negative yieldAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-20355630941851038532014-08-15T15:55:03.480+01:002014-08-15T15:55:03.480+01:00C .. I put up a cynical post on my other place th...C .. I put up a cynical post on my other place this morning <br /><br />http://polemics-pains.blogspot.co.uk/2014/08/innocent-aid-secured.html <br /><br />and Bingo .. Looks like the last few minutes have this playing out.<br /><br />Finland may feel a bit like Chamberlain after Putin's visit Polemichttps://www.blogger.com/profile/05985506596290073453noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-42955024781224683412014-08-15T15:45:32.386+01:002014-08-15T15:45:32.386+01:00Fair point C.
WhammerFair point C.<br /><br />WhammerAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-72507988921254596502014-08-15T09:14:43.315+01:002014-08-15T09:14:43.315+01:00C Says
Pol , I was thinking something similar. I d...C Says<br />Pol , I was thinking something similar. I don't think the guys in the armour are on their way to the beach for a little sunbathing. Looks to me like running interference for quarter back does it not? In other words the aid convoy is coming in whether you agree to it ,or not.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-37059595891955307912014-08-15T09:11:37.952+01:002014-08-15T09:11:37.952+01:00C Says
Actually Whammer I wasn't trying to be ...C Says<br />Actually Whammer I wasn't trying to be diplomatic . I actually think that a lot of people misunderstand the role of Central banker speak. Overtly ,it's about transparency ,but implicitly it's about achieving their goals and if latter means taking the market listeners in opposing directions from time to time then I get it. I also get why the listeners might take that to be lying as opposed to goal resolution. The two are not mutually incompatible.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-65566900874682912842014-08-15T07:22:26.262+01:002014-08-15T07:22:26.262+01:00mr LB.. this uberbull has just flattened out exces...mr LB.. this uberbull has just flattened out excesses bought on that dip. I was a sceptic of Ukrainian Convoy panic but with it sitting there and personnel carriers going in ahead i just think that something smelly is possible in the next 24hrs..Polemichttps://www.blogger.com/profile/05985506596290073453noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-1331935411824009502014-08-15T07:11:49.455+01:002014-08-15T07:11:49.455+01:00Haha, C, you are quite diplomatic :-) He is only ...Haha, C, you are quite diplomatic :-) He is only a liar when his lips are moving...<br /><br />- WhammerAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-72169897939330071852014-08-15T06:44:36.348+01:002014-08-15T06:44:36.348+01:00C Says
Carney "liar". Well that depends ...C Says<br />Carney "liar". Well that depends on what you think he is trying to achieve when he does open his mouth. If you think it transparency then the "liar" label would be understandable.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-38329761274482467892014-08-15T02:05:18.146+01:002014-08-15T02:05:18.146+01:00I feel sorry for all of those folks who may have s...I feel sorry for all of those folks who may have sold their homes listening to Carney who kept on promising higher rates when he had no intention of raising them..should have listened to LB instead!From Canada with dovenoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-62362330000175205772014-08-14T23:25:27.362+01:002014-08-14T23:25:27.362+01:00'Kenny G said...
He is a total fraud. Either h...'Kenny G said...<br />He is a total fraud. Either he is clueless (entirely possible) or a complete liar. His record of lying in Canada was pretty good. No reason why he'd stop doing it here'...<br /><br />Exactly my thoughts and basically what I wrote here when Carney when to England from the colony:-)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-23177402647761984642014-08-14T14:31:43.212+01:002014-08-14T14:31:43.212+01:00LB, I respectfully disagree. There are lots of pla...LB, I respectfully disagree. There are lots of places in 'Blue Collar' america where slack is low, just try to find skilled oil field workers in any of the shale plays. Are there also places where it is high, for sure, but at the MARGIN (and this is what always counts for markets) slack, overall is decreasing<br /><br />With respect to Yellen, I think the market is way too complacent assuming she is a dove. If she or stan fischer start changing their tune about slack, that will cause the stampede that 'real' money gets caught up in. Real money has been looking for an excuse for higher rates for a long time<br /><br />abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-55382951814653681312014-08-14T13:58:19.507+01:002014-08-14T13:58:19.507+01:00watch decreasing corporate buy backs - they've...watch decreasing corporate buy backs - they've been the main force pushing equity higher, and are decreasing at present<br /><br />folks that think they could have 30% upside in 2013 AND keep H1 2014 gains by end of year are nowhere near reasonable<br /><br />if i were long i would lock profits here - Q4 will be one hard bitchNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-22236312833560497572014-08-14T12:52:38.899+01:002014-08-14T12:52:38.899+01:00Among those people we can presumably include the O...Among those people we can presumably include the Old Lady herself, given the inflationary track record of the last 5 years. This is the problem with modern central banking. They start with the conclusion (unched rates at ZIRP) and then cherry-pick increasingly contorted and inconsistent narratives to justify their stance while being cheered on by the buy and hold crowd.<br /><br />The counterfactual ("Have you got ANY IDEA what rate hikes would do to housing???") is then held over dissenters' heads like the sword of Damocles.Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-51715691909766050112014-08-14T12:29:04.719+01:002014-08-14T12:29:04.719+01:00"The true market pricing of the probability o..."The true market pricing of the probability of a 25bp rate hike by Dec-14 prior to Mansion House was c.40% but Miles’ saw it as 10% which is consistent with using unadjusted SONIA. The chances of SONIA trading back to flat to bank rate by the end of the year is minimal (and not the market expectation, which is closer to a 4-5bps spread) so the BoE’s methodology is naive. Indeed the announcement that the BoE would allow broker dealers and CCPs access to BoE liquidity framework may speed up the drift back to bank rate but this information is already in the market and its pricing of SONIA-bank rate basis."<br />From a much smarter colleague.<br /><br />Despite the unpleasantness of mansion house it has been a decent yr in short£ land. Small fades put on this mng which I may regret come GDP tom.<br />Wages & prod still the central issues - no wage growth no inflation. Ppl seem to forget CB primary mandate is inf not growth.<br />Cheers MM,<br />JLAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-57261087489831100772014-08-14T09:15:43.381+01:002014-08-14T09:15:43.381+01:00MM said: "I reject the view, taken as axiomat...MM said: "I reject the view, taken as axiomatic in some quarters, that Anglo-Saxon economies cannot raise interest rates without causing the world to end."<br /><br />In theory I agree with you but evidence drawn from real behaviour (actions, not declarations) says the opposite. <br /><br />They bark a lot to keep their credibility intact but their actions? <br /><br />One day they WILL raise rates. saying when... more difficult.<br /><br />ciao fAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-6879756360803102692014-08-14T08:02:05.366+01:002014-08-14T08:02:05.366+01:00C Says,
LB,
Double bow from the waist.
Anon 4.51,...C Says,<br />LB,<br />Double bow from the waist.<br /><br />Anon 4.51,<br />Sounds fine except for the facts. Equity buying by retail has been in decline well back into the 90's. It has never recovered so baby boomers are not loaded up on equities. If anything they have bought fixed income in increasing amounts.<br />As for 'smart one's , wishful thinking. Inter-Generational transfers will happen and the skew will benefit the upcoming 20-40 year olds simply because wealth eventually does trickle the family tree. Think about it.<br /><br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-6834968645475688472014-08-14T01:04:17.538+01:002014-08-14T01:04:17.538+01:00@LB, there is at least one other reason to use QE ...@LB, there is at least one other reason to use QE to prop up asset prices, and you alluded to it in your point about demographics. Many of us baby boomers don't have pensions, instead we have our 401(K) plans littered with our "buy and hold" strategic investments in CSCO and SUNW and socks.com that we made in 1998, and our WAMU and Countrywide stock from 2006. We bought a bigger house than we needed in 2003, and our home equity lines allowed us to heat our bathroom floors and put marble and granite everywhere. We're coming to the realization, if we still have jobs, that we can't work forever, and we basically have no way to retire except by selling our houses to some young fools. Meanwhile we are all holding on to those houses as we wait to get back above water, and this time we will be the smart ones and sell at the peak, unlike all the other poor dumb bastard baby boomers, who will get caught in the stampede for the housing exits. <br /><br />Shorter -- we're about to have a whole crapload of retired people with no money if we don't watch out, even people who are comparatively well-off (top 30%, say).<br /><br />- Whammer<br /> Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-64415911418703313072014-08-14T00:34:26.258+01:002014-08-14T00:34:26.258+01:00To the extent it's true, why are CB's buyi...To the extent it's true, why are CB's buying equities? Can we all at least agree that there is no disagreement on what "buying equities" does (or in this case does NOT do) to real wages and AD?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-74576730696184603602014-08-13T23:56:40.418+01:002014-08-13T23:56:40.418+01:00I am anonymous 4:50 (from above). I appreciate all...I am anonymous 4:50 (from above). I appreciate all your thoughtful comments, but I think several of you are wrong. US equity indexes will push higher... this is a BTFD situation. We will easily exceed 2000 on the Sp500 before year-end. CBs aren't just printing money - they are now actively buying equities. Professional investors are blinded by their knowledge of free markets - they fail to realise we no longer have free markets. That's what's different this time.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-23307490251127760472014-08-13T23:25:18.266+01:002014-08-13T23:25:18.266+01:00He is a total fraud. Either he is clueless (entir...<br />He is a total fraud. Either he is clueless (entirely possible) or a complete liar. His record of lying in Canada was pretty good. No reason why he'd stop doing it here. <br /><br />He still hasn't realised that the Uk operates just fine under a high currency regime (they don't sell low value items, but what they do sell is relatively price insensitive. You don't walk into an Aston Martin dealership in HK and moan about the ccy effect on its price!).<br /><br />Emergency rates for emergency situations. These guys will be totally fuked if they need ammo in the future.<br /><br />@Anonymous at 4:50pm ... if you want to buy something you are better off buying fixed income. Stocks are in la-la land and don't realise that Russia is still very much on the agenda. Who gives a shit what some Russian Security Advisor says - really they rallied 50 handles on that??!! Not 24 hours earlier they banned all EU (and others) food exports ... for a year!! Mr Putin is settling in just nicely in the full knowledge that winter will be here soon, and that bavaria in December gets awfully fuking cold.... particularly with no heating!Kenny Gnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-30529298937758788062014-08-13T21:23:39.446+01:002014-08-13T21:23:39.446+01:00Wotcher, lads.
Look, I think there are all kinds ...Wotcher, lads.<br /><br />Look, I think there are all kinds of mistakes one can make in looking at the economy. One mistake is "location bias", where you play what you see. Pol looks at the UK economy around him and says Cor, there ain't half a lot of inflation 'ere, innit? He's right. It's the same when he visits San Francisco.<br /><br />But the UK is still cruising on an enormous bout of QE and sterling devaluation on the heels of the crisis, plus the fact that the UK (London) housing bubble never really deflated b/c of foreign hot money. In the US it's also a Tale of Two Nations. Silicon Valley is Hot, the Appalachians are Not.<br /><br />Btw, LB has been long the Spoos this week for a bounce, but is not going to wait around for The Top. It can get icy up there above the tree line, Pol, so we're going to relax and sunbathe at the mid-mountain restaurant for a bit.<br /><br />Abee, the measurements of "slack" in the labor market are dependent on which segments you look at. There never was any slack in software engineers, but there's plenty of slack in factory workers and other grunt occupations. Again, the vision of the US depends on where you sit, and we can actually see Blue Collar Middle America quite easily from our perch, even though it is located not far from Financial Services America. <br /><br />Slack is one thing. Wages are another. Pol, the segment of the US population paid in stocks etc. is minuscule and just doesn't register. That's why I obsess over "hours worked" in the jobs report (and so do others). With wages per hour more or less pinned for now, total wages depend on hours, and that measure also hasn't budged. These are the data that matter to us, because wages drive demand. Did we mention that we aren't fans of "trickle down" Supply Side economics? This is why QE doesn't affect wages. It doesn't trickle, and so doesn't stimulate aggregate demand. The bond market is in fact continuing to forecast reduced inflation in the US in the months ahead, all we have to do is listen.<br /><br />So QE isn't working? It depends on what you think it was intended to do. We would suggest that it was never intended to increase employment or wages, but to protect asset (housing, equities) prices from the scourge of deflation. It has been argued here by MM that QE in fact serves mainly to enrich exactly the same class of Americans who benefitted the most from TARP. Once again, it's crony capitalism at its "best".<br /><br />Abee, finally, I'm not sure that it is Yellen or Hilsenrath that "move markets" in the end. Once large amounts of Real Money begin to flow in one direction, the market will do whatever it wants to do, and the narrative attached to the fund flows will be irrelevant. As MM has said many times, keep an eye open for the elephants b/c once they start running you don't want to be in the way.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-37802242129640749342014-08-13T20:10:17.894+01:002014-08-13T20:10:17.894+01:00LB, you make a good point. Growth in the US econom...LB, you make a good point. Growth in the US economy hasnt really showed up in the numbers yet. But I think slack is much less than some at the Fed think. The Fed has been given the go ahead bc inflation is low and unemployment is high. But what happens when neither of the two are abnormal. Will the Fed get another mandate to target real GDP, productivity? or maybe nominal GDP like some wanted. <br /><br />Remember how the market moved on 'tapering' talk. well what do you think will happen if Yellen/ Hilsenrath/etc start talking about wage pressure /reduced slack. A giant U-turn, yes of course, but look at the data and its no so far fetched. abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.com