tag:blogger.com,1999:blog-34323687.post1562464246073443043..comments2024-03-28T12:22:11.704+00:00Comments on Macro Man: Strange But Untrue and Other Facts That Don't MatterMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger76125tag:blogger.com,1999:blog-34323687.post-82538423620980129952013-06-04T21:04:17.787+01:002013-06-04T21:04:17.787+01:00Ugh.
Today was one of those days you're glad...Ugh. <br /><br />Today was one of those days you're glad that you didn't try to trade anything. Who wants to get in front of whatever the machines will do after tomorrow's ADP number? Better to let it happen and then trade the reaction to the news, against what will hopefully be a clearer technical backdrop.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-14165685136033179292013-06-04T16:59:30.078+01:002013-06-04T16:59:30.078+01:00Generally agreed with the thoughts expressed here ...Generally agreed with the thoughts expressed here on rates and specifically about Bernanke not loving the performance of his portfolio in May. This doesn't go on too much longer. Taper talk is likely to continue until the market retreats.<br /><br />Definitely watching the mREITs, my personal BUY indicator is when the preferreds sell off and start looking much better than high yield debt. At that point you can usually scoop up the common near the lows as well. We are getting there for sure.<br /><br />Not diving in yet, you have to figure there is a big ugly down day out there for everything equities and that's when we plan to go shopping for yield. With REITs you do well if you buy twice a year at the fire sale, any other time you end up losing.<br /><br />Things that bubbled a lot seem to be selling now. We can see a host of stocks that shot straight up vertically beginning to obey Newton's Laws. Rotation going on into beaten-down sectors like telecoms and even miners and energy. We think that continues.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-75319000519275891432013-06-04T15:09:31.193+01:002013-06-04T15:09:31.193+01:00check out PDI...record 9% discount to NAV with a f...check out PDI...record 9% discount to NAV with a fraction of the leverage risk of the mREITsAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-28370093823870131042013-06-04T12:44:08.675+01:002013-06-04T12:44:08.675+01:00abee, not sure about mREITs, technicals perhaps st...abee, not sure about mREITs, technicals perhaps still heavy, and who knows if BV shock is in the price but we are liking agency outright here.<br /> <br />not all-in, fat pitch territory, but happy to grab some.<br /><br />much better prepay profile, improved carry/spread, and we cant believe we are about to say this, but attractive valuations vs. non-agys.<br /><br />DD<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-27744766177406072282013-06-04T10:33:25.155+01:002013-06-04T10:33:25.155+01:00Any thoughts on mReits. Sell off looks to be justi...Any thoughts on mReits. Sell off looks to be justified by move in mbs rates but one can only guess at company book values. I am getting interested here. Cant see Bernake too pleased with 30yr above 3.5%. <br /><br />My initial thoughts are that the em trade is just a carry unwinde and not a pre courser. Will wait to see 2nd leg. Most us dividend investors haven't a clue about intl capital flows. But yen much lower can certainly change my mind. abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-56010450537905347302013-06-04T06:08:13.982+01:002013-06-04T06:08:13.982+01:00please note -7% punch in Turkey yesterday (oh yeah...please note -7% punch in Turkey yesterday (oh yeah the pussy riot excuse) and -10% flush in Philippine today the EM darlings are getting clubbed which strenghens my view that a major change in trend is in the cardsNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-86741002344086968132013-06-04T05:47:41.305+01:002013-06-04T05:47:41.305+01:00thanks for posting Vince Foster i remember him fro...thanks for posting Vince Foster i remember him from ages ago (2007/2008) he always had spot on analysis especially late 2007 calling for the last epic crashNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-80480873077383056682013-06-03T22:56:50.391+01:002013-06-03T22:56:50.391+01:00Yes indeed - we were able to avoid the arrival of ...Yes indeed - we were able to avoid the arrival of Cold Steel this afternoon, even as Mr Shorty's nether regions received an unwelcome intrusion. After all, the last 212 Tuesdays have seen the SPX rise at some time between 9.30 and 4.<br /><br />A lot of the "Death of Treasuries" genre out there at the moment, Point of No Return, oo-er mrs kind of stuff.<br /><br /><a href="http://www.bloomberg.com/news/2013-06-03/bonds-point-of-no-return-about-a-standard-deviation-away-1-.html" rel="nofollow"> Bonds Point of No Return </a><br /><br />Then again, given today's miserable PMI, it might equally well turn out to be Bonds at Point of Very Nice Return, Don't Mind If I Do, Squire, I'll Help Myself To A Nice Slice of Mean Reversion, Thank You, Mr Shorty.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-28053916961216584172013-06-03T18:23:31.366+01:002013-06-03T18:23:31.366+01:00Shocking PMI. Really shocking. This economy is rea...Shocking PMI. Really shocking. This economy is really in the doldrums. I am surprised that 10y Treasuries didn’t move 20 bps on that, instead of just 10. But of course that data point calmed the Taper Talk, so...<br /><br />This beast has one more rally/squeeze in it. Took profits this morning, one has to respect the possibility of a man standing behind you with a red hot poker.<br />Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-13730917281317386022013-06-03T16:16:59.530+01:002013-06-03T16:16:59.530+01:00C Says'
At some point I imagine people will st...C Says'<br />At some point I imagine people will stop just looking at a US employment number revsision and start looking again at how difficult growth is to buy. They all need it,and their attempts to get it are proving to be quite zero sum at this point.<br />Wake me up when real incomes start to rise.Until then risk taking is in milking mode.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-53669261690526889462013-05-31T21:07:55.405+01:002013-05-31T21:07:55.405+01:00A nice flushing sound to end the merry merry month...A nice flushing sound to end the merry merry month of May, as we close at the lows of the week with what the media refer to as "slightly accelerated selling" in the last hour. [Don't use the P word}. <br /><br />Now it's very important that the Japanese don't P-pppppanic on Monday morning and start madly buying back the yen..... hahahaha<br /><br />We can probably depend on Tokyo to stay calm as they always do, just like Corporal Jones here, as Sgt. Wilson holds an unexploded bomb with an admirable degree of sang froid:<br /><br /><a href="http://www.youtube.com/watch?v=ZR6wok7g7do." rel="nofollow">Don't Panic </a><br /><br />Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-67825441115152840272013-05-31T20:17:53.598+01:002013-05-31T20:17:53.598+01:00Put/call ratios fell to a very low level this week...Put/call ratios fell to a very low level this week, close to TWICE as many calls as puts, clearly an expression of a very special kind of fear: "fear that the bloke at the next desk is going to eat my lunch and make twice my bonus". <br /><br /><a href="http://schaefferstradingfloor.com/quick-look-at-put-call-ratios/id=4671" rel="nofollow"> Put/Call Ratios At Extreme Lows </a><br /><br />It's always hard to believe when sentiment becomes this extreme. I mean, tomorrow is f***ing June, for Heaven's sake.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-26275693096600816782013-05-31T20:04:37.718+01:002013-05-31T20:04:37.718+01:00VIX north of 15 on a Friday afternoon. Long only f...VIX north of 15 on a Friday afternoon. Long only funds doing some serious rotating and hedging. Sell side starting to shut up shop for the summer. Dodgy small cap shares safely off-loaded to hapless small punters.<br /><br />Time to head for the Hamptons. Job done.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-39083973668123074862013-05-31T19:39:00.462+01:002013-05-31T19:39:00.462+01:00Even the preferred shares of REITs are taking a re...Even the preferred shares of REITs are taking a real battering today, along with the common shares, as rates spike at the long end once again. <br /><br />There is going to be some outstanding value out there soon, once the babies start being thrown out with the bath water. If there's one thing we really like doing it is buying up large amounts of cheap preferreds when people are having a good panic about higher rates.<br /><br />VIX is looking ominous today. Normally in this market there has been vol selling down to oblivion early on Friday mornings and then everyone buggers off early - in the Tesla they leased with the profits from buying TSLA. Today is different.<br /><br />Lots of charts have that "bubble about to pop" look. Or that ugly look where it popped already, but nobody noticed yet b/c they are too busy at the caviar and champagne. <br /><br />TSLA, SCTY, Z, LL, LNKD, BMRN, TRLA*. All of these charts have the same look - there was a short squeeze, blow-off top, then they rolled over or are about to roll over. Some sleepy longs in these names are going to wake up one day and be massively pantsed by this market, and it is going to happen in the not-too-distant future. <br /><br />From here, charts that have been going up vertically for months always seem to end up the same way. Mean reversion. Even a visit to the 200 dma is going to be absolute TOTAL CARNAGE. <br /><br />Look at LL for example, P/E is 40, peaked at 90, trades at 82, but the 200 dma is down at 60. Everywhere you look in small caps you can find charts that look the same. When the music stops, you don't want to be the one holding this particular set of bags, trust me.<br /><br />*Full disclosure. Falling Knife Capital may be short a number of these names.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-39445897346921757442013-05-31T17:41:13.590+01:002013-05-31T17:41:13.590+01:00Welcome back, C.
Last day of May. We have had so...Welcome back, C. <br /><br />Last day of May. We have had some almighty bad days to kick off June and July in recent years.<br /><br />A few HFs will have taken a hell of a beating in Japan this week. RORO has been sleeping for a few months but I reckon we'll see some fireworks if USDJPY crosses 100, EURJPY crosses 130 again and heads lower. Carry unwind and liquidity shortage is always great fun.<br /><br />We bought EWJ puts when it was up at 12.35 or so, since when we have caught most of the Cliff Dive. The 200 dma is down below at 10.... surely only a matter of time before other markets test the waters with a vertical plunge, Acapulco style?Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-3875768654510137372013-05-31T17:05:45.895+01:002013-05-31T17:05:45.895+01:00Participants in the equity market obviously do not...Participants in the equity market obviously do not realize that the QE negative [REAL] interest rate wind at their back is no longer present." <br /><br />Read more: http://www.minyanville.com/business-news/the-economy/articles/Bernanke2527s-Worst-Nightmare-Rising-Real-Interest/5/28/2013/id/50031?page=full#ixzz2Ut358qAg"Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-66128460145239884122013-05-31T12:53:12.679+01:002013-05-31T12:53:12.679+01:00C Says
Big picture is still where it is at.
Global...C Says<br />Big picture is still where it is at.<br />Global rebalancing ongoing.Global oversupply of labour still rising.Global saving high ,but still not translating into current consumption demand as opposed to hoarding hence low transmission value for loose monetary policy.<br />Taper ,or not, none of the above equates to rates spiking. I think the lows are already in ,but as it stands there's no fundamental growth case out there that suggests they should be higher right now than they already are. Low inflation ,ecxcess labour ,output gap,stagnant labour costs etc etc.great ierselecAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-71801342627183089882013-05-30T23:16:43.165+01:002013-05-30T23:16:43.165+01:00The article:
Bernanke's Worst NightmareThe article:<br /><br /><a href="http://www.minyanville.com/business-news/the-economy/articles/Bernanke2527s-Worst-Nightmare-Rising-Real-Interest/5/28/2013/id/50031" rel="nofollow"> Bernanke's Worst Nightmare </a>Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-26447810352575809022013-05-30T23:15:29.242+01:002013-05-30T23:15:29.242+01:00REITs looking more attractive, for sure, but would...REITs looking more attractive, for sure, but would rather wait for the inevitable washout of all equities before picking around in the wreckage. The price of the preferred shares is usually a good tell of when the bottom has been reached, as selling those is a clear sign of distressed investors.<br /><br />Several commentators have alluded to the fact that Bernanke is QEasing like crazy and not producing any significant inflation, b/c the aggregate demand of a large group of lower wage earners is essentially fixed. There is a nice discussion here of how QE has actually produced rising real interest rates at the same time as disinflation takes hold. This is a mess for central bankers, as this is where things start breaking.<br /><br /><a rel="nofollow"> Bernanke's Worst Nightmare </a><br /><br />Mainstream economists of the disingenuous Wall Street ilk are banging the drum about interest rates rising sharply from here because of growth and reflation. This is all based on standard models that do not apply in ZIRP and QE regimes, and simply did not work at all during the Japanese attempts to use QE to reflate. JGB yields just sank lower and lower as the liquidity trap captured all monetary injections.<br /><br />No reflation occurs in the real economy via QE although asset price distortions occur and can be persistent. What happens eventually is that one day yields rise a bit and investors look up and realize they make more money in safe old 10y govies (2.2%) than they do in dodgy US small caps (1.1%), commodities or Bitcoins, and then the asset price bubble deflates. Exhibit A: The Nikkei of the 90s - we might be about to watch another re-run of the same movie!Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-59610197009479390682013-05-30T21:20:49.241+01:002013-05-30T21:20:49.241+01:00Short term interests blinded by possible book valu...Short term interests blinded by possible book value problems giving up on Anna Lee? Maybe a long term bet on widening spreads = greater profit as a reason to start buying?Marshall Junghttps://www.blogger.com/profile/01494663748081037987noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-45127367671264565002013-05-30T17:19:38.282+01:002013-05-30T17:19:38.282+01:00Yield Hogs are crowding into frontier market bonds...Yield Hogs are crowding into frontier market bonds offered by Mustafa Urwonga and other master brokers. This always ends well....<br /><br /><a href="http://www.reuters.com/article/2013/05/26/markets-frontierfunds-risks-idINDEE94P03120130526" rel="nofollow"> Frontier Market Bonds Booming </a> Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-91040667327008080782013-05-30T16:27:22.933+01:002013-05-30T16:27:22.933+01:00Speaking of Strange But True, Lumber prices are an...Speaking of Strange But True, Lumber prices are an excellent leading indicator, much better than say, employment, which is a well-known laggard. The price of lumber rose until March, when it began to fall. More recently, lumber futures have been cliff diving, likely a reflection of (Duh!) falling demand from the supposedly effervescent construction industry.<br /><br /><a href="http://www.etftrends.com/2013/05/lumber-liquidation-could-be-bad-sign-for-housing-etfs/" rel="nofollow"> Lumber Liquidation Bad Sign for Housing ETFs </a><br /><br />Similar warning signs are present in the data for construction employment which is stable but not growing.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-38697047481232416972013-05-30T16:15:44.863+01:002013-05-30T16:15:44.863+01:00Meanwhile the performance chasing continues as we ...Meanwhile the performance chasing continues as we approach month's end.... and thoughts turn to the early days of June.<br /><br />It will be interesting to see the fund flows change as June begins. We can expect to see movement out of HY funds for sure, and look for that to accelerate over the summer. Looking across the ETF landscape, EMB, JNK and HYG have been weak all through May. The XHB, which has been leading the charge, is suddenly lagging. EWJ is going down in large chunks without any apparent panic so far. These all look like a good place to start looking for June's sacrifices.<br /><br />XLU among today's leaders. Not bullish.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-74223478466382594932013-05-30T15:33:21.813+01:002013-05-30T15:33:21.813+01:00In an ideal and transparent world, Bernanke would ...In an ideal and transparent world, Bernanke would come out and say the following:<br /><br />"Stop buying silly season stocks with 1000x multiples right now, you complete tools, before you lose your shirt, pants and your 'lucky trading underwear'. Sell shares of Bobby the Builder, Lenny the Loan Shark, Mickey the Mortgage Broker and anything to do with Mr Musk's space ventures. We are not going through all that bubble crap again.<br /><br />Cease immediately this mindless reach for yield in Greek govies, pets.com convertibles and Vinny's Solar panel installation bond issues. Curtail this idiotic behavior forthwith and snap up some MBS and Treasuries here, you dolts. <br /><br />Or else you are going to be subjected to the most intense up-tapering of jawboning about tapering that anyone has ever endured.... also if the BoJ doesn't stop f***ing with our bond markets and buy some yen soon, we are going to do it for them."<br /><br />But we can probably expect the communication to be a little less direct. The market took one look at the 3.81% mortgage rate and sent its own message by selling the XHB hard this morning.<br /><br />He who sells first, sells best in this market.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-22825497749703847752013-05-30T01:04:19.684+01:002013-05-30T01:04:19.684+01:00used this puke to snatch up more non agency vehicl...used this puke to snatch up more non agency vehicles. Anonymousnoreply@blogger.com