tag:blogger.com,1999:blog-34323687.post8192851066764112747..comments2024-03-28T12:22:11.704+00:00Comments on Macro Man: Telefonica: Where are Activist Hedge Funds When You Need Them?Macro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger54125tag:blogger.com,1999:blog-34323687.post-37218569606335149482012-06-06T18:20:08.965+01:002012-06-06T18:20:08.965+01:00"The Compression" trade is on.
(Long Sp..."The Compression" trade is on. <br />(Long Spain 10y or 2y bonds: Short bunds/Schatz)<br /><br />Spanish two-year notes advanced for a third day even after a report showed the nation’s industrial production fell the most in more than two years in April and after Draghi indicated another round of three-year funding for banks wasn’t imminent.<br /><br />The yield on the securities tumbled 17 basis points to 4.55 percent. The nation’s 10-year rate declined three basis points to 6.28 percent.<br /><br />Squeeze, anyone?Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-37197245774295237602012-06-06T17:41:20.617+01:002012-06-06T17:41:20.617+01:00LB wishes to nominate this guy for his prestigious...LB wishes to nominate this guy for his prestigious Knob of The Week award. Basically, he is completely clueless, yet highly opinionated on Europe. If it is a down day he runs a EU collapse, sky falling, headless chicken, TEOTWAWKI column and then if it is an up day he tells you to buy, in this case, blue chip European shares, in other words, all the stuff that we were telling you to buy last week.<br /><br /><a href="http://www.marketwatch.com/story/5-ways-to-trade-europes-game-of-chicken-2012-06-06" rel="nofollow"> Matthew Lynn Is A Bit of a Knob </a>Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-9497169152330762112012-06-06T16:58:20.899+01:002012-06-06T16:58:20.899+01:00Good point on China.
Who's bending over this ...Good point on China.<br /><br />Who's bending over this morning? A few of the London-based hedgies may have been over-enthusiastic of late in shorting Italy and Spain.<br /><br />Fed chatter suggests they will announce a non-unwinding of Operation Twist, always one of the most likely scenarios for dealing with a summer swoon in the States. This means they retain the option of sinking a big QE into the MBS market if things were to really go pear-shaped in US housing/banking again.<br /><br />Never short European equity markets going into a major international football tournament. This is an entirely empirical, yet apparently immutable law of markets. We all want to watch without having massively leveraged positions melting down during the game.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-50590319901613006132012-06-06T14:19:52.517+01:002012-06-06T14:19:52.517+01:00The true "tail risk" is in China. Regar...The true "tail risk" is in China. Regardless of how the EU ponzi scheme is dealt with the market is not prepared for anything but a soft landing in China.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-69595435370128657022012-06-06T12:54:40.773+01:002012-06-06T12:54:40.773+01:00c SAYS'
"ECB leaves benchmark interest r...c SAYS'<br /> "ECB leaves benchmark interest rate unchanged at 1.0 percent"<br /><br />I don't know if that is accompanied by anythingelse ,but in isolation it's enough to send me into paroxyms of laughter.<br /><br />Best taken with a mouthful of Weetabixs bent over a chart of the Euro ;)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-38136819824977892852012-06-06T06:55:57.391+01:002012-06-06T06:55:57.391+01:00C says'
In this period of political hiatus the...C says'<br />In this period of political hiatus there have only beeen limited number of market outcomes.The meltup prior to a Greek ref was the least likely and remains that way for my money. A covering rally though is easily possible looking at how so called oversold we got and how the various key events are laid out prior to that ref.<br /><br />As it stands though we are back in a position yet again where you have to think what is the likeliest option and a meltdown from here is not imo the most likely outcome because the market is once again too prepared for that judging by the moneyflow over the last couple of months.More likely in my view would at last be the sideways action posited earlier by Tmm.I mean if you wanted to sell out of European political mayhem how much notice do you need?Surely most people who wanted to have already 'run' to where they want their money to be.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-73865059744299269072012-06-06T04:00:27.800+01:002012-06-06T04:00:27.800+01:00Well stated, Charles.
Now, enough of our pontific...Well stated, Charles.<br /><br />Now, enough of our pontificating about what the ECB will or will not do. We should, I suppose, all remember that the ECB has been massively behind the curve ever since Trichet's spectacular error of judgment when he hiked rates in 2008 in a panic over the spike in oil prices, even as interbank lending was freezing all over the world. That was indeed Tricky. They are behind the curve again here.<br /><br />Not to flog a dead horse but I feel I have to point out to the assembled Austrians, austerians, and advocates of latter day gold standards etc, that governments are frozen, firstly by gridlock in the US Congress, and secondly by a complete lack of understanding in Europe (especially Germany) about the nature of balance sheet recessions. The Germans are apparently completely unable to understand their essential complicit role in the Spanish housing boom, via easy money policies and their own banks. <br /><br />In addition, the inflation-averse Germans now seem unable to understand that the imposition of austerity policies on their Southern European friends has resulted in a bank run, with the hot money flow ending up - in Germany, where it is likely to do what hot money does - contribute to domestic inflation!<br /><br /><a href="http://www.bloomberg.com/news/2012-06-05/u-s-and-europe-have-no-excuse-for-next-recession.html" rel="nofollow"> US and Europe Have No Excuse </a><br /><br />So with governments clearly unable to think their way out of a paper bag, it is clear that the only adults remaining are the central bankers. One can only hope that Draghi is able to think more clearly and act more decisively than was his hubristic and frankly feeble-minded predecessor.<br /><br />Oh by the way, by the time you wake up you will all know that Hilsenrath has been told to "take a leak" about the Fed being "likely to do something..."Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-4952788276841632712012-06-05T22:57:04.317+01:002012-06-05T22:57:04.317+01:00Price action? - a numerical representation of the ...Price action? - a numerical representation of the spread of gossip within a mob.Charles Butlerhttps://www.blogger.com/profile/00486529931043507880noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-25121552270495459092012-06-05T20:28:46.302+01:002012-06-05T20:28:46.302+01:00Economics may not be physics, but so what? Price ...Economics may not be physics, but so what? Price action is far more fractal than not, I'd argue, which in turn suggests market "behavior" is far more in tune with, and related to other natural phenomena than with the so-called "science" of economics.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-78152008903656679922012-06-05T19:35:29.078+01:002012-06-05T19:35:29.078+01:00Can't remember if it was mentioned here before...Can't remember if it was mentioned here before or not... Was watching Krugman this weekend - the German word for debt is the same as the word for guilt..go figure. <br /><br />Regarding the ongoing debate and stating the obvious, seems the bar has been set pretty high on this one. I'm holding out hope of being pleasant surprise, but I think the most likely outcome is one that is good, but not good enough. I mean it would be a new precedent if CBs prevented a crisis, wouldn't it?Coreynoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-82303355998403241262012-06-05T18:38:17.536+01:002012-06-05T18:38:17.536+01:00C says'
LB,
No one is treating you as though y...C says'<br />LB,<br />No one is treating you as though you are an illiterate fool which is how your post reads. having ssid that, you will get no apology just a suggestion that you reread your own posts and consider have you accuately communicated your own views in line indeed with your last post. I for one don't think so which is why i advise you to have a reread.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-91786074358969522132012-06-05T18:10:10.658+01:002012-06-05T18:10:10.658+01:00Anon, C, I understand the concept of reinforcement...Anon, C, I understand the concept of reinforcement, but I agree w/ LB in that if they print (not just jawbone) then the liquidity has to go somewhere. Some asset will get bid up. I think to underestimate the need for institutions to meet mandated returns by putting the new liquidity to work in some risky way is to fight a losing battle.Marshall Junghttps://www.blogger.com/profile/01494663748081037987noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-13889507091281095792012-06-05T18:05:26.602+01:002012-06-05T18:05:26.602+01:00One of the things that I find most irritating in t...One of the things that I find most irritating in this world is people treating me as though I have the imagination and intellect of a 5 year old. I think you can assume that I have in fact already considered the bloody obvious fact that the market is ready to whack peripheral equities again with a 2 x 4 if there were to be a lack of fudge, or more likely an underwhelming petit Eurofudge.<br /><br />I am very familiar with the topic of conditioning, far more than you might believe. So familiar, indeed, are all of us these days with the concept of such conditioning in the markets that I think we all agree that a really enormous bazooka will be what is required AT SOME POINT to ultimately set off the absolutely inevitable market melt up. <br /><br />Whether the big one is unveiled here or not isn't at all clear. However, we do know that there is going to be a vulnerable period between the ECB meeting and the Greek election. If there were to be a gradual unveiling of the nature and scale of the weapon under discussion, followed by a modest period of absolutely nothing deteriorating further, we might well see the markets reflect the process of shorts closing their trades and going away to enjoy the summer doldrums, as the spreads between "safe" and "unsafe" bonds begins to compress once again.<br /><br />The fact that nobody thinks this is possible without some massive dislocation is extremely interesting. Tail risks are called that for a reason.....Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-89635289879029357162012-06-05T17:02:02.926+01:002012-06-05T17:02:02.926+01:00Here you go.Bit basic,but it will give you the ide...Here you go.Bit basic,but it will give you the idea.<br /><br />http://en.wikipedia.org/wiki/ReinforcementAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-61582907913105615842012-06-05T16:59:20.540+01:002012-06-05T16:59:20.540+01:00C says'
As an addendum,if you are interested y...C says'<br />As an addendum,if you are interested you might do some reading on the concept of reinforcement and how it applies to this ongoing process of patchwork intervention and of course note how it can break down.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-20174606761431481972012-06-05T16:54:04.039+01:002012-06-05T16:54:04.039+01:00C says'
LB,
Please note Anon is not citing any...C says'<br />LB,<br />Please note Anon is not citing anything to with "Physics".Not quite sure wher you got that from. he is alluding to Behavioural psychology and the breakdown in conditioning. There is nothing mystical about this at all. Indeed the process he refers to must surely have been observed by all by now.How the 'pacebo' effect of intervention in whatever current form has been chosen has had increasingly transigent after effects. There really is no guarantee that further attempts at intervention that the market continues to perceive has inadequate will result in further RORO. As I have said before it appears to me that it is harder and harder to get Rovers attention using using 'bone' lookalikes.He wants the real thing, or woof off I'm not coming out of my kennel.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-49131896730523770422012-06-05T16:46:06.172+01:002012-06-05T16:46:06.172+01:00i am getting worried about this ECB meeting. Dragh...i am getting worried about this ECB meeting. Draghi seems bent on saying he has done enough and now it is the politicians turn. I agree. But no news on Thursday's meeting I think could start a heavy selling stampede again.<br /><br />We are not even at 30 on the VIX yetabee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-65345144729179711602012-06-05T16:40:24.052+01:002012-06-05T16:40:24.052+01:00That's an interesting point of view, anon, and...That's an interesting point of view, anon, and I have seen that in many places. The idea of liquidity desensitization is interesting, but it just isn't very logical, and there isn't any evidence to support your frankly rather touchy-feely doomy-gloomy idea. <br /><br />If there is real liquidity pumped into the financial system, it has to go somewhere. Some of it is likely to go into riskier and/or more productive assets, rather than all absorbed into Treasuries, JGBs and bunds. <br /><br />Economics isn't physics (and to think it is in any way similar is sheer folly) but it does obey some laws of logic. If you think that massive waves of global printing will not elevate the levels of commodity and risky asset prices then you may be reading the book upside down.<br /><br />By the way, I am by nature fairly bearish and risk averse, but I am not buying into theories and strategies that are primarily emotionally based, especially those based on fear, which manifest most often at short-term tops (fear of missing out) and bottoms (fear of greater losses).Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-40327437868630721512012-06-05T16:13:47.171+01:002012-06-05T16:13:47.171+01:00It seems we're assuming the reaction to LTRO3/...It seems we're assuming the reaction to LTRO3/recap/QE 'whatever you want to call it' will be the same as it's always been, though in hindsight the reactions to every bout of so-called 'easing' have been less and less one could argue.<br /><br />To this end, I remember reading some time ago that the brain oftentimes begins to feel the effects of soon-to-be administered narcotics seconds BEFORE they are actually administered. Likewise, I fear for the day when massive QE or even coordinated monetary policy is quickly SOLD by a market already hopped up to its core as it realizes that there is no new, designer drug in the pipeline.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-15035474733349509682012-06-05T15:54:12.585+01:002012-06-05T15:54:12.585+01:00There is always a part of the summer where you get...There is always a part of the summer where you get to go and play golf. LB is hoping they do something in time for us to all watch the footy.<br /><br />I mean, priorities, meine Freunde .... you can get back to stuffing it up the impoverished masses of the mediterranean economies AFTER the tournament, right? Surely there is a need to make quite sure that Deutsche and SocGen don't go belly up in the middle of a match b/c of a Southern European bank failure? What if Schweinsteiger was about to take a penno against Spain and you had to deal with a margin call?<br /><br />That would be quite absurd....... come on, bring on the rate cut, the promises of LTRO-3 and the new banking integration plans and recapitalization package. Then we can all reverse recent RORO positions, go and watch the telly and wonder about how to pay for it later....Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-15500856749245545432012-06-05T13:34:34.758+01:002012-06-05T13:34:34.758+01:00Confidence is wearing thin, I feel,they can keep p...Confidence is wearing thin, I feel,they can keep parading out in the print more initiatives , but its dawning upon them, finally, that the only way to keep the shitshow going due to an inadequate policy implementation and supervision in tandem with weak underlying growth is to intervene in areas of the market that players probably would have least expected.... now I don't know enough of how the Europe financial system operates, but there is no doubt these guys are holding back.<br /><br /><br />The Macro front in my 2012 view didn't expect the level of deterioration that we're at now until latter in the 3rd Qtr, and was expected to last throughout the remaining year.This was thought to be a due to limited intervention in 2012, all but PBOC.<br /><br />Therefore the future seems to have caught up to the market quite aggressively when one was of the hope of staying quite literally isolated from world markets and the attention thats needed to be ahead of key global crisis when trading ...it would've been so much easier had the prior plan worked, where you could've sold where ever the dart landed and gone and played golf.....Amplitudeinthehousenoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-70982474398258930342012-06-04T20:28:34.675+01:002012-06-04T20:28:34.675+01:00Reversal signals? Friday the MEFF introduced a 10-...Reversal signals? Friday the MEFF introduced a 10-year bono contract. Their blurb practically touted it as a way to get long the 'risk premium'.Charles Butlerhttps://www.blogger.com/profile/00486529931043507880noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-7357040764145747202012-06-04T19:38:20.060+01:002012-06-04T19:38:20.060+01:00lb, great link and interesting observations . Ther...lb, great link and interesting observations . There will be rip roaring bounce at some point. but just how much lower that is, well who knows...<br /><br />looking like '98 again (wait wasnt that this past summer). we need a turn around tuesday to get some of those shorts squeezedabee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-89330750909102709582012-06-04T18:26:42.950+01:002012-06-04T18:26:42.950+01:00Dollar, Dow, Gold and TLT all falling at the same ...Dollar, Dow, Gold and TLT all falling at the same time.....<br /><br />Marc Faber told me there would be days like this. Actually I think this is the kind of low volume, correlation breakdown stuff that you tend to see near to an abrupt turn.<br /><br />Euro rate cuts, printing and rescue, and an overnight global melt-up. You read it here first.<br /><br />Watch out Mr Shorty. One day you will wake up in the proctology suite...Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-12067002264948466002012-06-04T17:37:22.663+01:002012-06-04T17:37:22.663+01:00oh the pain continues
we appear to be in free fal...oh the pain continues<br /><br />we appear to be in free fall mode in the US equity markets.abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.com