tag:blogger.com,1999:blog-34323687.post8638805263923920297..comments2024-03-29T09:24:42.731+00:00Comments on Macro Man: Rate Traps and Mortgage Twists. Macro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger55125tag:blogger.com,1999:blog-34323687.post-21782051776927284242013-03-21T16:04:35.494+00:002013-03-21T16:04:35.494+00:00Really interesting post, thanks for sharing it.Really interesting post, thanks for sharing it.Summit Capital Mortgageshttp://www.summitcapitalmortgages.co.uk/noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-56682656190324468492013-03-13T15:25:28.475+00:002013-03-13T15:25:28.475+00:00Now, we are obviously talking our book here, but i...Now, we are obviously talking our book here, but it sounds to us that there is a not unreasonable case to be made that we need less rent and more activity/investment, and that fiscal incentives should be geared towards that goal.<br /><br /><a href="http://presswire.com/monitoring.php" rel="nofollow"> Media Monitoring</a>Anonymoushttps://www.blogger.com/profile/14055400903924385698noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-37039175245562966502013-03-13T08:52:54.454+00:002013-03-13T08:52:54.454+00:00Also, agreed with HY points above. Long dated non ...Also, agreed with HY points above. Long dated non callables should work well from the short side if you have a 2-3yr horizon.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-60285639384292325852013-03-13T08:27:28.866+00:002013-03-13T08:27:28.866+00:00We have discussed them here before but worth repea...We have discussed them here before but worth repeating how strong UK linkers have been this year (true there was event risk but still).<br /><br />Now front and center in the mainstream press ("infl exp at 2008 levels!!" yada yada yada), it looks like expectations in Carney are well on their way to Eriksson-Capello-Osario levels, to name only three highly touted, but ultimately disappointing (vs. unrealistic hopes) high profile foreigners hires.<br /><br />DDAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-16174451439743197122013-03-12T15:57:25.509+00:002013-03-12T15:57:25.509+00:00Another bad day for Betty, and is it just me or ar...Another bad day for Betty, and is it just me or are yields diving a bit in US, Germany and the UK?<br /><br />Usually when yields crash in the middle of the trading day, it's either a POMO (10-11am) or "something just happened" in a credit market somewhere in the world.<br /><br />Probably nothing. Market Going Up Forever. JBTFD*<br /><br />* engage irony detector.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-76636282589271431442013-03-12T15:13:19.398+00:002013-03-12T15:13:19.398+00:00C says
Yes,I see a junk a loser whichever way we g...C says<br />Yes,I see a junk a loser whichever way we go from here,at least immediately. That is,were bond yileds to rise they reduce the spread with junk making it look even less attractive in risk adj. If we get a decent risk sell off in equity it's highly likely to be interpreted as an increase in default risk so junk looks and follows equity...etc etc.<br />Why I exited whilst I thought there was still seemingly enough ready buyers out there. All I kept was some very short maturity stuff.<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-48365681969614431512013-03-12T14:43:39.104+00:002013-03-12T14:43:39.104+00:00LB loves the way the media trumpet Bill Gross'...LB loves the way the media trumpet Bill Gross' "latest moves" by saying "PIMCO sold Treasuries in February". Maybe so, but that was 2-3 weeks back, which is eons ago. I bet they were buying on Friday, after the 10y spiked on the jobs report.<br /><br />A common misunderstanding among the populace, which is fostered by the media, is that there is always either "bonds" or "stocks". So money can only flow from bonds into equities. What they fail to mention is that the credit markets are huge and most of the flows are internal, which is to say, the vast majority of the money stays in the credit markets and flows between the higher risk (US junk bond, dodgy EM credit and lower-rated sovereigns) and lower risk pools (US Treasuries and German bunds, etc...)<br /><br />It's been a long time since we saw the effects on the capital markets of wider US credit spreads, and when it happens a lot of people who should know better will act surprised. People are looking for the wrong bond market bubble. The bubble isn't in Treasuries, it is in junk.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-83388627148305968692013-03-12T14:31:56.923+00:002013-03-12T14:31:56.923+00:00The last few days there is an explosion of this ki...The last few days there is an explosion of this kind of stuff in the media:<br /><br /><a href="http://blogs.marketwatch.com/thetell/2013/03/12/jeremy-siegel-makes-the-case-for-the-dow-going-to-18000/" rel="nofollow"> Jeremy Siegel Dow 18,000 </a><br /><br />A few people we know who wouldn't touch stocks during "Europanique 2012: Les Investuers Miserables" and "The Cliff: A Fiscal Pantomime" are getting itchy feet and want to "get back in" b/c of "the recovery" and b/c "the improving economy" will "kill bonds" and b/c they want to "get more yield".<br /><br />Alarm bells....Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-33664428040782196762013-03-12T13:29:17.165+00:002013-03-12T13:29:17.165+00:00Always remember:
Whether the market goes up or do...Always remember:<br /><br />Whether the market goes up or down is a matter of whether there are more idiots than stocks or vice versa.<br /><br />EddieAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-11820887706534488402013-03-12T11:22:42.336+00:002013-03-12T11:22:42.336+00:00C Says
This is the market !
"Shares in the F...C Says<br />This is the market !<br /><br />"Shares in the FTSE 100 miner jumped 5pc as it recommend a 90 cents a share final dividend, amounting to $887.3m - of which the controlling Luksic family will receive around $530m. <br />The payout is made up of a 12.5 cents final dividend and 77.5 cents special dividend, up from 36 cents the previous year and giving a total dividend for the year of 98.5 cents payable on June 13. <br />Antofagasta reported an 11pc rise in revenue to $6.74bn, although profits fell from $3.08bn to $2.75bn after a 10pc fall in average copper prices over the year and a $500m impairment relating to its Antucoya mine."<br /><br />To summarise this business sold more product and made less money from it than previously.However, the business hikes the divi which en masse accrues to the 'insider entity',but obviously makes that business that much 'cash' weaker. However, this 'swap' which basically prifts the 'insider entity' the most is seen as rational to improve the stock price by nearly 5%.<br />I can only stand in awe of an education system that turns out people with such sharp economic insight.<br /><br />There's a sound reason why i do not like my money incompanies with majority family controlling interests.<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-42840607731496631652013-03-12T10:03:00.056+00:002013-03-12T10:03:00.056+00:00C says
So much for my GBP outlook.A salutory remin...C says<br />So much for my GBP outlook.A salutory reminder why initial positions are the way to go!<br /><br />Saying that I am not impressed by the so called fundamental story, although the mom story is undeniable.<br />What was always clear to me was that Uk gilts and sterling attraction were symbiotic to Euopean woes. The worst the latter,the better the former became. Hence,it was always also clear to me that the market would be quick to change it's target when sentiment changed.<br />Where i disagree fundmentally here is that the UK is somehow worse than Europe going forwards,but that's a disagreement to put money on when the mom story has completed it's unfolding.<br /><br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-1375601850176494142013-03-12T08:22:10.014+00:002013-03-12T08:22:10.014+00:00C Says
LB be comforted.Shanghai already believes y...C Says<br />LB be comforted.Shanghai already believes you and given that exchange was the so called ignition flame for the "China recovery" it's already spluttering.<br />Given I don't really believe in decoupling,just lagging, I expect at some point this will be reflected across the region and then across the Pacific etc etc.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-70091237896476480042013-03-12T04:05:31.873+00:002013-03-12T04:05:31.873+00:001) the vix is being extrapolated, it aims for a 30...1) the vix is being extrapolated, it aims for a 30d maturity, but also uses the two front months of sp&500 options<br /><br />2) skew is not necessarily cheap when normalized to atm vol level<br /><br />3) BRIC+SAfrica looking shaky, each in their uniquely unhappy wayAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-61108091778272921232013-03-12T01:43:48.111+00:002013-03-12T01:43:48.111+00:00The Bill Gross top? LOL. You can take the boy ou...The Bill Gross top? LOL. You can take the boy out of the surf, but not the surf out of the boy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-80670587245791144812013-03-11T19:45:59.731+00:002013-03-11T19:45:59.731+00:00Bloody hell, volume just completely disappearing a...Bloody hell, volume just completely disappearing and the VIX under 12, at a 5 year low.... SPX closing in on all time highs. What could possibly go wrong?<br /><br />Time to grab some protection. Fill yer Boots...!!!Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-25160786857467127762013-03-11T18:45:58.113+00:002013-03-11T18:45:58.113+00:00For those of you who believe the income theme is n...For those of you who believe the income theme is not dead, just resting, there is some good downward action in the muni stuff (retail rotating to stocks I suppose).<br /><br />Good bargains to be had especially if this follows through to the seasonal ex dividend swoon.<br /><br />DDAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-47728851289572015772013-03-11T17:31:15.523+00:002013-03-11T17:31:15.523+00:00Indicator Monitoring Time on another dull Monday. ...Indicator Monitoring Time on another dull Monday. <br /><br />LB baiting is definitely on the up. Well-to-do and hermetically sealed US neighborhood real estate chatter is up. Daffodils are up. "The market" is up. Yields are up, well a bit, I suppose. Surely, Gary the Angry, an Important portfolio manager, will be back at any moment to berate LB and Bill Gross and Jeff Gundlach or anyone else who likes Treasuries, or who ever did, at any time.... <br /><br />Yes, the SPX is up. But Dr Copper, not so much. This happens, we are told, b/c "roro" is dead, and so FX correlations decline and we are now in a "whole new investing paradigm" as the "stock market reaches a permanently high plateau". [Insert your own favorites here].<br /><br /><a href="http://www.nicholasolesen.com/blog/wp-content/uploads/2013/03/2013-03-11-Commentary.008.jpg" rel="nofollow"> Copper Decouples From Spoos </a><br /><br />Commodity stockpiles are big and they are growing. Nice graph here of the ratio of SPX to the commodities index:<br /><br /><a href="http://www.bloomberg.com/news/2013-03-11/equities-beat-commodities-as-surpluses-mount-chart-of-the-day.html" rel="nofollow"> SPX v S&P Commodity Index </a><br /><br />This isn't the stuff of an overheated global economy, we are not looking at a HOT TOP like 2007-2008. We are looking at the end of a COOL-AID rally, as global growth cools, thereby ending a QE-modified economic mini-cycle that has been sustained by IV liquidity.<br /><br />How can this happen, in the face of QE infinity? Simple. Demand for goods and materials is low. In the US, and especially around the world. You can mine it, make it, market it, Like it on Facebook, and tweet about it – but if you can’t sell it, inventories will grow (already seen in commodities, coming soon if not as we speak to US retailers) and sooner or later you will cut production (already going on in China, and coming to a factory near you soon). Banks will begin to tighten credit to business at this time, credit spreads will widen and other loans will become more difficult to obtain. Manufacturerd will idle machinery and lay off workers. This is what happens in any business cycle, and it is also why employment measures are the last sign of what is going on in the economy.<br /><br />As for the impact of the Sequester, it's only 0.5% of GDP we are told. But more people work directly or indirectly for government than is appreciated. All of these folks have some experience of furloughs and government shutdowns, and they are all saving and not spending a dime right now. We will see that show up in the US economy very soon. It isn’t the austerity itself that hurts the economy, as much as the anticipation of cuts, and then there all the secondary businesses that are hurt as a consequence. Now think about an economy that was sputtering along at 0.4% or so, and subtract 0.5% and what do you have? <br /><br />A very very angry and vindicated Mr Achuthan?Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-71528072210461861802013-03-11T08:04:23.237+00:002013-03-11T08:04:23.237+00:00Something a little more long-term but interesting ...Something a little more long-term but interesting nonetheless.<br /><br /><a href="http://www.hussmanfunds.net/wmc/wmc130311.htm" rel="nofollow">Hussman: Two Myths and a Legend</a><br /><br />EddieAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-71460239539355561072013-03-10T19:48:38.656+00:002013-03-10T19:48:38.656+00:00And also LB " blue collar America...where mos...And also LB " blue collar America...where most of the economy occurs". Really? Data please.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-78129334069112634812013-03-10T19:36:55.829+00:002013-03-10T19:36:55.829+00:00LB,
M2V is perfectly correlated with the increase ...LB,<br />M2V is perfectly correlated with the increase in federal deficits over the last decade. That may be all its saying. Falling Obama poll numbers=compromise=strong dollar=falling commodity prices=maybe actual progress toward debt reduction=higher future M2V? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-59564129433369193842013-03-10T00:15:13.605+00:002013-03-10T00:15:13.605+00:00Let' try to be data-driven shall we? Strong do...Let' try to be data-driven shall we? Strong dollar, falling commodity prices, and then there is this:<br /><br />http://research.stlouisfed.org/fred2/series/M2V/<br /><br />Is this a recovery, chaps? M2V is falling rapidly. This often occurs just before the beginning of a recession. That reflects the nervousness of blue collar middle America, where most people live, and where most of the economy occurs.<br /><br />But who needs data when you can just look at the happy clappy people on TV with the Dow 14k hats, listen to the guys who just made it back to their 2007 level in the 401k, and think about that wealthy suburb where they are building new McMansions. Stay in the bubble, where the Spoos go up 5 handles every day and all future earnings are better than expected.....Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-63457102813600013022013-03-09T10:54:48.653+00:002013-03-09T10:54:48.653+00:00In essence I am suggesting that over time much of ...In essence I am suggesting that over time much of the depreciation in dollar purchasing powerr may have been attributable to their global role.In effect a swap of same for Middle East energy.<br />Arans going cheap anyone?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-65945599562953416542013-03-09T10:51:24.155+00:002013-03-09T10:51:24.155+00:00C says
Long term picture unfolding thoughts. How m...C says<br />Long term picture unfolding thoughts. How much of US economic history is owed to being the global policeman with costs theirin of protecting an energy supply largely Middle East based?<br /><br />How much vested interest does the US have today in maintaining that role with all that it costs to do so?<br />Speculating,what sort of future could we contemplate if the US became more domestically focussed,more concerned with expending it's economic efforts domestically? Remembering of course we are seeing substantial shifts already in it's investment in domestic energy resources.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-20609311263799103872013-03-09T10:44:26.555+00:002013-03-09T10:44:26.555+00:00C Says
Abee,
you are absolutely right. There are m...C Says<br />Abee,<br />you are absolutely right. There are many micro stories out there.<br />For example;why is Florida lagging a recovery?Come on,it's not that hard to work out.<br />Scale of recovery is open to question,but ongoing policy is supportive of a recovery even if transpires to be more modest and gradual than Industry noise would wish you to believe.<br />US property isn't Japan I can tell you that much.You use that as soe form of anology and you'll be well off the mark.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-48082609501709493292013-03-09T07:28:44.288+00:002013-03-09T07:28:44.288+00:00The devil's in the details, and your footnote ...The devil's in the details, and your footnote assumes that people keep on dying on time. They won't in the very near future - average age will be well over 150 years within two generations. The old will literally starve the young, and there'll be a hell of a fight over it.Anonymousnoreply@blogger.com