tag:blogger.com,1999:blog-34323687.post8641452406144961161..comments2024-03-29T09:24:42.731+00:00Comments on Macro Man: More on PEs and earningsMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger22125tag:blogger.com,1999:blog-34323687.post-55261175034911541102015-11-11T00:50:38.573+00:002015-11-11T00:50:38.573+00:00Washed: Q3/4 14 were QE3 tapper and end ( http://g...Washed: Q3/4 14 were QE3 tapper and end ( http://goo.gl/9tA1Es ) , no interest rate hike even whispered. About the same time $usd launched, commodities rolled over and inventories stated to ramp.....and apparently mREIT's turned to dog s&!t. ;-)<br />JohnLhttps://www.blogger.com/profile/16277794221279494655noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-32779391579801004802015-11-10T22:34:14.892+00:002015-11-10T22:34:14.892+00:00Interesting to see the HYG and JNK arent destroyin...Interesting to see the HYG and JNK arent destroying shares even as the drop lower every day. The number of shares outstanding is increasing. Someone is buying<br /><br />http://imgur.com/IASgobwabee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-58461950251616713742015-11-10T22:27:37.905+00:002015-11-10T22:27:37.905+00:00re. EU what happened in Portugal is absolutely hor...re. EU what happened in Portugal is absolutely horrible<br /><br />am moving out of EU where unelected officials in Brussels - whose average personality resembles a Monday pub urinal - are shitting on democracy next door<br /><br />2015 annus horribilisNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-25265083083949170002015-11-10T22:19:15.451+00:002015-11-10T22:19:15.451+00:00Cleveland Fed Inflation Nowcasting... as cool as t...Cleveland Fed Inflation Nowcasting... as cool as the Atlanta Fed GDP Nowcast<br /><br />https://www.clevelandfed.org/our-research/indicators-and-data/inflation-nowcasting.aspx<br /><br /><br />They also has a paper that explains a simple model of core PCE that backs up the "disinflationary forces from energy and USD are temporary and inflation will trend back to 2%" comments from Feds.<br /><br />https://www.clevelandfed.org/en/newsroom-and-events/publications/economic-trends/2015-economic-trends/et-20151110-explaining-low-inflation-model-based-decomposition.aspxAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-66462542241946610012015-11-10T21:43:45.376+00:002015-11-10T21:43:45.376+00:00Good news, we could soon be seeing the end of the ...Good news, we could soon be seeing the end of the fascist state known as the EU:<br /><br />http://www.politico.eu/article/asselborn-eu-end-break-up-schengen-migrants-refugee-crisis/<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-15229399106075204062015-11-10T21:21:19.218+00:002015-11-10T21:21:19.218+00:00abee - are mREITs really being hit because of the ...abee - are mREITs really being hit because of the recent swap spread issues? I think they have traded worse than dogs@3t since q414 when the markets started worrying about the phantom rate hike - the odd thing is prepayment risk actually heads down with any rate rally and you can't really argue credit risk for agency mortgage borrowers has increased with this jobs picture - I see their NIM potential as the same that it has been since the financial repression era began - I think they are just getting swept up in the overall hatred for anything yield-y.<br />All from the fear of a (most likely) 25 bps one and done rate hike - go figure.washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-59075125536304402052015-11-10T18:41:10.727+00:002015-11-10T18:41:10.727+00:00LB, have you looked at mREITs.. most are trading a...LB, have you looked at mREITs.. most are trading at about 80% of book and now starting to buy back shares. <br /><br />They are being hit hard as Swap rate spread turned negative. There was an aticle in the FT aobut this http://www.ft.com/intl/cms/s/0/e86a211e-847f-11e5-8e80-1574112844fd.html#axzz3r7DYQSho<br /><br />I'm still trying to understand the implications for the broader market. Any thoughts from the crowd are appreciated abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-151427236262230952015-11-10T17:17:04.610+00:002015-11-10T17:17:04.610+00:00@LB,
I like you year-end plan, except for the EM ...@LB, <br />I like you year-end plan, except for the EM part. <br /><br />I won't be as extreme as Nico, but I do expect that China's economy will experience another bad turn pretty soon: this week's online retail discount events pull lots of future comsumer demand forward, export continues trending downward, government spending is limited due to anti-corruption and declining tax revenue, and industrial investment is still declining. Then you have the December Fed event. There is a real possibility that there will be another shock EOY during the holiday season (my 2 cents: PBOC will do it to offset the USD's strength when most traders are away from offices.) <br /><br />So maybe EM is a steal by the end of Q1 2016, I do not want to stand in front the train right now. HY looks to be a better choice. Any vehicle to play this theme? HYG? <br /> Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-32040807531718092532015-11-10T16:35:19.986+00:002015-11-10T16:35:19.986+00:00[Top brass of] “Companies in the United States hav...<br /><br />[Top brass of] “Companies in the United States have taken advantage of low interest rates to issue record levels of debt over the past few years to fund buybacks and M&A,” Goldman analysts led by Robert Boroujerdi wrote in a note. “This has driven the total amount of debt on balance sheets to more than double pre-crisis levels.”<br /><br />in other words, top managers have used ZIRP to make themselves real real rich. No lesson learned from 2008 'aprés moi le déluge'. This wealth extraction is the hold up of the Century. Now you watch what happens when IR go back up againNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-48052714724024747272015-11-10T15:51:11.006+00:002015-11-10T15:51:11.006+00:00you spend $170m on a Modigliani well it's almo...you spend $170m on a Modigliani well it's almost all right by today's absurd standard. But the same Chinese collector spent $30 million on a cup of tea. Sorry i meant a minuscule porcelain soup bowl. This is how much wealthy Chinese are willing to overpay to park their cash somewhere else which should give the right measure of their confidence in their economy/government/future to come.<br /><br />China is being depleted. It will crash big.Nicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-57091151948329227352015-11-10T14:40:55.912+00:002015-11-10T14:40:55.912+00:00Bubbles are local this time around. That's exa...Bubbles are local this time around. That's exactly right. There are no bubbles in the Midwestern Rust Belt, or Pennsylvania, no bubbles in Mississippi or Arkansas. The bubble is mainly localized in Silicon Valley and its NYC cousin Silicon Alley, now that the Shale Oil bubble has more or less burst.<br /><br />High Yield looks like being another one for the Bargain Basement shopper into EoY. Every year, investors and advisors decide to dump "stuff that isn't working" in so-called "tax sales", even though the tax benefits of so doing are often a mirage. The selling begins after Thanksgiving and into mid-December, and results in some interesting distortions. A few years ago it was REITs selling down to the point where the preferreds offered 9-10% yield, or muni CEFs trading at a 10% discount to NAV. That was some real value for Yield Hogs and Income Whores such as the team at Hammock Capital. This year we are likely to see the following get marked down for clearance: gold miner CEFs (!!), emerging market equity and debt CEFs, and possibly US high yield CEFs as well. So, as always, it's never too early to do one's homework!!<br /><br />Bucky making another Run for the Roses this morning. Another commodity washout is not exactly out of the question. I can't help agreeing with Nico's proposal that US inflation can make a swift and sharp (if transient, say 6-12 months) comeback, to 2-3% CPI and maybe 4% PPI, on the heels of a weakening greenback and a firmer crude oil price in 2016. To our way of thinking that makes the entire universe of reflation trades quite interesting, especially things that are absolutely hated and detested right now like emerging market energy, debt and FX, gold mining etc... just my 2c.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-39162350795398293682015-11-10T14:26:13.582+00:002015-11-10T14:26:13.582+00:00Can you say debt? This so insane, a new word may b...Can you say debt? This so insane, a new word may be in order...<br /><br />via BBG:<br /><br />Debt in developing markets is estimated to have reached $58.6 trillion at the start of 2015, with credit in China, Hong Kong, India, Indonesia, Malaysia, Singapore, South Korea and Thailand exceeding that of Latin America, emerging Europe and the Middle East<br /><br />Emerging-market debt has grown $28 trillion since 2009<br /><br />Global debt has soared $50 trillion during the period to surpass a total of $240 trillion<br /><br />Anyone know what the end game is?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-51632562006654321412015-11-10T14:24:48.675+00:002015-11-10T14:24:48.675+00:00If leverage loans are not bubbly and credit is not...If leverage loans are not bubbly and credit is not bubbly then where are the bubbles that argue for tightening financial conditions in the face of deflation and a global economic slowdown? Are we so worried that the young googlers won't be able to find affordable housing in the posher parts of San Francisco or is it the $170m that was dropped on a naked lady picture that has us all wound up?DownWithTheBeanCountersnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-90657274519567697362015-11-10T14:21:38.394+00:002015-11-10T14:21:38.394+00:00Credit will be interesting to watch as there are l...Credit will be interesting to watch as there are lots of deals to get done into year end (SAB, and now CP) However if we are in a lower rate environment, these spreads are attractive, given that you do your homework on the issuer. lots of babies being thrown out here, but I do agree its not the asset class to be in anymore. And aside from energy, the market has a problem with EM $USD bonds and also roll ups, like Valent and Altice<br /><br />abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-60530408540419818692015-11-10T13:28:30.694+00:002015-11-10T13:28:30.694+00:00MM - interesting observation on that credit downtu...MM - interesting observation on that credit downturn lasting 11 months - HYG and JNK are both in the process of putting in a reverse head and shoulders pattern, so conventional wisdom would suggest credit could rally from here - the problem is that I am really not seeing any catalysts for it, and would also hazard a guess that given its overall pear shaped behaviors over the last few quarters that its still over-owned.<br />If credit does start making new lows, I've been thinking the next step in the Fed's 'unconventional' box may be to buy corporate credit and not necessarily negative interest rates as some have alluded to. Obv ECB seriously mulled it late last year as well - questions of moral hazard aside, I think that has the best chance of keeping the asset ponzi going. <br />Agree with the spoo reaction function on what would put off the next hike as well - I must say its a bit sad to see you cynical like the rest of us!washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-63951090294706463702015-11-10T12:45:11.581+00:002015-11-10T12:45:11.581+00:00Divergent central bank policy within the G10, and ...Divergent central bank policy within the G10, and divergent meaning "polar divergent" will destabilize markets adding markets and friction. A reflexive aspect to the USD strength will ensure this trend cannot continue unabated...<br /><br /><a href="http://crackerjackfinance.com/2015/11/midsummer-issues-persist-divergent-global-central-bank-actions-create-challenges/" rel="nofollow">Divergent Central Bank Trends</a>Crackerjack Financehttp://www.crackerjackfinance.comnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-79327326079967374692015-11-10T12:22:38.106+00:002015-11-10T12:22:38.106+00:00@Anon 1: Doh! I though I had downloaded the TR in...@Anon 1: Doh! I though I had downloaded the TR index but now see I was wrong. Thanks for pointing that out, and it's been edited in the post.Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-58584077621967645382015-11-10T10:51:13.468+00:002015-11-10T10:51:13.468+00:00it is obvious Fed will hike again and again for th...it is obvious Fed will hike again and again for the following reason:<br /><br />commodities collapsed prices were NOT transmitted to consumers. There was no deflation whatsoever in the food you paid and limited mark down on gas. Companies and distributors just milked record, tremendous (dare i say, unpatriotic) margins out of that.<br /><br />what happens when commodities pick up next year? expect THAT to be transmitted to consumers. Hence you can expect inflation to pick up dramatically as soon as commos bounce like i am betting they will.<br /><br />The Fed knows that and has already announced their hawkish campaign for December AND beyond, throughout 2016Nicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-77710188284114228852015-11-10T10:19:43.883+00:002015-11-10T10:19:43.883+00:00I think the Fed will pike out again. If they do ac...I think the Fed will pike out again. If they do actually hike, long usd.cnh could be a very interesting asymmetric risk. A fed hike with or without an ECB easing will put enormous pressure on the Chinese with their peg. Also the cost of carry reduces with this position with Chinese easing or US hikes and yet the price remains the same, which is value. Boogernoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-82909347401268915882015-11-10T10:14:34.849+00:002015-11-10T10:14:34.849+00:00Italy bank loans to private sector fell 0.5% YoY i...Italy bank loans to private sector fell 0.5% YoY in Sept. Go QE go!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-89090213287726955152015-11-10T09:33:13.435+00:002015-11-10T09:33:13.435+00:00" While history need not repeat, of course, i..." While history need not repeat, of course, if high yield does not bounce soon it will appear as if the nature of the market has changed."<br /><br />Simple, the credit cycle is turning, that's what the Q3 release of the Fed Senior Loan Officer Survey is telling you. The most predictive variable for default rates remains credit availability. In terms of predictive value, the SLO survey and Non-financial leverage are the best indicators. For the US there is a clear sign of tightening financial conditions: a net 7.4% of banks also worsened terms for C&I loans to large borrowers, vs. -7% in Q2 and the worst since Q4’09. Today’s spreads are merely fair-value for what is a late cycle environment, so regardless of the very heavy flows back in US HY in recent weeks, there is limited upside. You can clearly see this in terms of performance given that this time around BB paper was the top corporate segment last week, adding 3.25% meanwhile B’s were up 2.39% and CCC’s gained 1.32%. For the CCC segment is the "Credit Canary".<br /><br />Best,<br /><br />MartinAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-68514408664846152062015-11-10T09:11:16.422+00:002015-11-10T09:11:16.422+00:00MM the lev loan chart is price rather than total r...MM the lev loan chart is price rather than total return<br />Would be quite something if lev loans were underwater on a TR basis since 2011!<br />Can you answer my final Q on the Boom Shaka thread? (why not just short the long end)<br />Many thanks! Anonymousnoreply@blogger.com