tag:blogger.com,1999:blog-34323687.post2680840714215178937..comments2024-03-19T03:05:57.184+00:00Comments on Macro Man: A Trump tantrum....or a China one?Macro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger26125tag:blogger.com,1999:blog-34323687.post-64512552232385893782016-11-18T06:24:40.655+00:002016-11-18T06:24:40.655+00:00Given the events of recent months and the events s...Given the events of recent months and the events still to come in the next months I am particularly looking forward to the Year End 2017 forecasts ,or non-forecasts !<br />I'll kick off early with <br />1. Renzi resigns after losing his referendum and becomes despondent. This awakens the maternal instincts of Mama Merkel who decides not to stand for reelection and the two run off to live happily ever after in the tax haven of Mauritius. Schaubal loyal to the last ,but heavily conflicted agrees to stand up as best man at their nuptials if the Mauritians agree to overhaul their disclosure practices.<br />Using my Trump/Brexit polling system I assign that event a 99% probability that it will happen.checkmatehttps://www.blogger.com/profile/03688082792316894545noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-46686339966462003172016-11-18T04:43:27.562+00:002016-11-18T04:43:27.562+00:00it went to DRYS
it went to DRYS <br /><br />Nicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-56327845310907486832016-11-18T00:33:24.825+00:002016-11-18T00:33:24.825+00:00So where does the money coming out of the US bond ...So where does the money coming out of the US bond market go?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-14266539129243580852016-11-18T00:07:41.878+00:002016-11-18T00:07:41.878+00:00The action since Nov 9 has felt like very large sh...The action since Nov 9 has felt like very large short positions getting squeezed out. Cant have the good-time-charlies enjoy the real moves - right?<br />So now - we have a spiking Dollar, sharply higher bond yields and everything else pretty much the same except for some vague campaign promises - is a $100 Bn/yr fiscal spending package to revitalize inner cities really going to mean much? Especially when the orders of magnitude larger capital spender , China, in cut back mode?<br />Stagflation, declining earnings and sharply slower global trade - this is going to bail out a market trading at 24X? Sure.rs55https://www.blogger.com/profile/18295141329379319099noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-25670101828340839772016-11-18T00:03:45.084+00:002016-11-18T00:03:45.084+00:00I am as bearish as the next on US equities but loo...I am as bearish as the next on US equities but looking at the charts and earnings expectations and US growth data i dont really see a bearish picture. We can peak on good news. For sure. But i dont like to short tops like the xlf. Big gap up on huge volume after consolidation. Just not a good setup imo. Much safer bet to short once it comes back to old range. abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-19415811100774232292016-11-17T22:50:23.186+00:002016-11-17T22:50:23.186+00:00Last time euro was this low, Dax was near 12000. ...Last time euro was this low, Dax was near 12000. Fancy an opex pullback into Thanks Giving . Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-13315499716846723962016-11-17T22:33:31.672+00:002016-11-17T22:33:31.672+00:00i hear you loud and clear Shantaram!i hear you loud and clear Shantaram!Nicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-2703654323326652262016-11-17T22:01:30.093+00:002016-11-17T22:01:30.093+00:00@Nico check out the price action in small caps i.e...@Nico check out the price action in small caps i.e. IWM - definitely checks the 'blow off' box - don't know about the 'top' I guess time will tell!washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-49541669555593469282016-11-17T21:47:25.626+00:002016-11-17T21:47:25.626+00:00@ LB
TLT best of the bunch with 200 SMA, 120 and...@ LB<br /><br />TLT best of the bunch with 200 SMA, 120 and TL just below, I also like XMPT but Ill wait to see its reaction with 25Phileas Foggnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-38701972254533046542016-11-17T21:04:25.963+00:002016-11-17T21:04:25.963+00:00Yes, China moves markets, but China doesn't us...Yes, China moves markets, but China doesn't usually continue to move in a reckless manner after creating instability. With Bucky making 13 year highs this might be time for the PBoC to activate the stabilizers and allow the global capital markets a breather. Ready for a spot of mean reversion, punters?<br /><br />Here at Hammock Capital we are in a state of mild excitement, having today deployed some of our cash pile into bonds for the first time since, well, maybe a year ago or so. So we are now long some TLT, IQI and some AGG; it's easy to be skeptical that we are at a bottom in bonds here, but the RSI made a low below 20 on Monday, and trading volumes have declined since then. We have been trading this event very technically, hoping that patience and discipline will be rewarded.<br /><br />At the same time, we have started a short of the XLF to go along with our view on a reversion to a flatter yield curve. We are also beginning a tiny EURUSD long as well as a short of USDJPY, because with the RSI for UUP now closing in on 80, it's getting a little euphoric up here, and Bucky may need to come down for oxygen. DX has a little gap above 99, might be a good place to pull back to.<br /><br />"Markets peak on good news" is an aphorism that Polemic used to use on the blog, back in the days of Team Macro Man, and with Dame Janet more or less affirming a hike, and the positive US employment and housing data today, we think Polemic's old saw about market tops may be apposite for rates, banks and the dollar just at the moment. Although we are not "all in" here, we are ready to add to our long US fixed income position in the days ahead, as we expect the true nature (and timing) of the GOP's much-ballyhooed "reflationary" fiscal policy to become clearer, and perhaps less thrilling for equities.<br /><br />Leftbackhttps://www.blogger.com/profile/07728096415928915882noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-16759838461434763172016-11-17T20:57:31.833+00:002016-11-17T20:57:31.833+00:00Would fit a blow off top à la 2000 very well - thi...Would fit a blow off top à la 2000 very well - this is also when dollar peaked, for no other reason than the whole world rushing to buy equities. Above 2180 you are in rarefied air after a 6.5 year rally and it is taking a Trump illusion to invite all the gullible in<br /><br />Rates are going up.Nicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-32734368673367930422016-11-17T20:36:08.858+00:002016-11-17T20:36:08.858+00:00The Trump trade is and probably will be an oppress...The Trump trade is and probably will be an oppressive theme for the next few months. Expectations of US reflation and foreign stagnation. Dollar continues up, yields rise, US stocks probably go up as money comes from overseas and out of bonds (but the fundamentals are going to be hurt by rising wages and rates).ABnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-87831121152958067672016-11-17T19:44:08.722+00:002016-11-17T19:44:08.722+00:00Interesting point Johno. I still have some shorts ...Interesting point Johno. I still have some shorts on USDJPY, no doubt underwater for now. My biased view is that the news of BOJ's infinite bidding does not seemed to excite the JPY shorts. I wonder if anyone beyond BOJ still owns JGB 2s and 5s. Thus, I did not rush to close my (small) positions. Also, where would the squeezed out Japan real money go after they exist JGB positions? <br /><br />I would still bet on some short-term profit taking next week due to holidays. But I think we should prepare for a rotating bull till the end of the year, again mostly for tax reasons: major players would not want to liquidate their winning positions this year and be subject to a higher marginal tax rates, since the tax cut in 2017 is almost a certainty at this stage. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-87507649851132363222016-11-17T19:36:37.774+00:002016-11-17T19:36:37.774+00:00Trading CPI inflation, "real" inflation ...Trading CPI inflation, "real" inflation and FOMC inflation expectations, e.g. 5y5y forwards, are three very different things, anon. If you want a traditional and often leading inflation indicator, check out GDX, which actually turned downwards in August and CLZ6, which peaked in June. There is an interesting message there for those who care to hear it.<br /><br />Sorry to point this out, but Peak Reflationary Hallucinations often coincide with punters seeking suitable punting vehicles, sort of like looking for a horse in the barn after it has already bolted out the wide open door.<br /><br />Short to medium-term, we can now see signs of tops in: USDJPY, UUP, XLB and XLF, with signs of bottoms forming in TLT, AGG, etc.. and EURUSD. The munis and preferred ETFs (IQI and PFF) have already bounced to some extent. The "Great Rotation / Trumper Tantrum / Reflation Trade" may be ending here. Interestingly, junk bond ETFs have been almost a total snooze since the election.<br /><br />Punters involved in the Ponzi scheme known as Dry Ships (DRYS) have had an interesting week....Leftbackhttps://www.blogger.com/profile/07728096415928915882noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-68706753706108473782016-11-17T19:21:25.685+00:002016-11-17T19:21:25.685+00:00Well, LB was right about USDJPY tagging 110 first ...Well, LB was right about USDJPY tagging 110 first (4 pips away as I write). BoJ bid for 2s and 5s in INFINITE size. Frankly, I hadn't properly thought through USDJPY implications of the US rate rise driving Japanese money expansion as JGBs hit their yield ceilings. Mercifully the markets gave me a chance to close out yesterday's short at <109. Anyone have a view on whether the USDJPY-rates relationship changes as we get to the BoJ's rate ceiling?<br /><br />Today's fool's errand I've tasked myself with is buying US bond futures (down on that). There's a nice pickup for Japanese and European buyers using short-term FX hedges now (only slight pickup for Europeans and none for Japanese on maturity matched basis). And I don't see high rates being sustainable given the economy's debt load, unless credit creation picks up massively (ability to service is largely a function of interest rates and newly printed money/credit that allows interest and principal to be paid). Also, we have a rate shock, a dollar shock, and a massive negative sentiment shock to Clinton voters. I do think it's possible that we could have a year or two of higher nominal growth maybe one or two years out, and the markets may over-interpret that and we'd get the kind of yield numbers Gundlach talked about, but that would end up killing the expansion and we'd wind up back in a secular stagnation state of the world, just with higher inflation than before.<br /><br /><br />johnonoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-91281975983623983012016-11-17T17:43:36.850+00:002016-11-17T17:43:36.850+00:00Dear MacroMan,
What is a good/liquid futures prod...Dear MacroMan,<br /><br />What is a good/liquid futures product to get exposure to inflation?<br /><br />Thanks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-75183816502072944912016-11-17T16:51:23.319+00:002016-11-17T16:51:23.319+00:00@checkmate, leaving aside the putative potential t...@checkmate, leaving aside the putative potential the chronology needs to move forward five years. You can buy a car for Bitcoin; in 1988 even email was unusual outside academia. Gopher was 1991 and Mosaic was 1993, if you must make the analogy go early '90s.<br /><br />@abee, on blockchain I am confused by the excitement, but make hay while the sun shines.<br />wcwhttps://www.blogger.com/profile/16307608293310560164noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-80556480375380594332016-11-17T16:19:25.377+00:002016-11-17T16:19:25.377+00:00on bitcoin, probably for the financial industry it...on bitcoin, probably for the financial industry its like the internet in the 80's. Massive implications there. For the rest of the economy not as much<br /><br />Lots of VC money pouring into bitcoin, and of course most of the recent move is due to chinese, so if they ever plug that hole, its a long way down. But for now, the trend is firmly established, growing adoption and lots of inexperienced traders trading the thing like its a penny stock. Current market cap is around $12B USD, which is a smaller mid cap stock. I wouldn't be surprised to see it do a 10 bagger before it get really over valued. Pure retail speculation, including Chinese (love those parabolic markets) and tech money (which I think kinda are like Dr's in terms of their understanding of stock/global markets)<br /><br />And lastly the core technology/methodology of implementation is ingenious. The mysterious creator has been nominated for a Nobel prize and many super bright academics and computer ppl love the idea. How it progresses in the future is another story. <br /><br />abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-21035151728653667452016-11-17T15:11:39.091+00:002016-11-17T15:11:39.091+00:00I think one thing that is not considered is that P...I think one thing that is not considered is that PBoC is expecting trump to talk up CNY. The classic setup used to be to keep CNY weak and then let it go up before US officials visit. I think PBoC is happy to keep CNY moving in-line with CFETS which allows them to maintain moral superiority while letting outflows and US jawboning counteract. <br /><br />Trump's rise gives China the opportunity to build soft-power by appearing rules-based, rational and impartial. Recent climate change banter coming out of the Foreign Ministry is a good example. There has never been a better time to score political points by appearing dependable.SRXhttps://www.blogger.com/profile/08893693527065807228noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-34830302649732602362016-11-17T14:53:04.297+00:002016-11-17T14:53:04.297+00:00Depends what you mean by the term 'like'. ...Depends what you mean by the term 'like'. The guy giving the opinion was making a chronological analogy to where abouts they thought Bitcoin was in terms of development and take up and obviously suggesting it was akin to where the development of the Internet was at a particular point in time. Both Bitcoin and the indeed the NoiseAnet are both beyond my area of expertise. For context I don't even have a mobile phone.checkmatehttps://www.blogger.com/profile/03688082792316894545noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-41239017205231547912016-11-17T13:55:15.848+00:002016-11-17T13:55:15.848+00:00@checkmate, having been a high school computer mis...@checkmate, having been a high school computer miscreant in the 1980s, I can attest that Bitcoin is not like the internet in the late '80s. Boiled down to core elements, what we think of today as the internet then was both more potentially useful and mostly ignored.<br /><br />All, in re bonds, core CPI missed low, but initial claims and housing starts/permits came in a touch low/high respectively and bonds are getting sold. Like our friend LB I have been eyeing Cal munis in the form of widening CEF discounts, but I am not wading in yet.wcwhttps://www.blogger.com/profile/16307608293310560164noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-16866490419105992822016-11-17T13:53:48.797+00:002016-11-17T13:53:48.797+00:00@abee I did not - I kinda know what he would say b...@abee I did not - I kinda know what he would say but if you have a link would appreciate it.<br />I think its a $4 EPS long run with possibly a $2.50-3.00 trough so see it as a 24 P/E, you know, close to Google's - I know other people have higher targets and hope dies eternal on this one - I think I will nibble at a short around 100. washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-51875277430761912242016-11-17T13:39:18.104+00:002016-11-17T13:39:18.104+00:00@ washed were you watching Chanos on bloomberg yes...@ washed were you watching Chanos on bloomberg yesterday? ;-) re CAT<br /><br />http://imgur.com/a/mvvgu - some high yield charts.... <br /><br />BBB's have been the ones that have sold off the most relatively, though thats total return change, not necessarily spread, as most IG spreads are in a very tight range for the past 6 months. HY spreads have ticked up a bit but cant see that going on much longer if Russell pushes new highsabee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-68591496665804117292016-11-17T12:17:45.340+00:002016-11-17T12:17:45.340+00:00@MM yes interesting how China doesn't seem to ...@MM yes interesting how China doesn't seem to command any equity punters attention these days with the focus on the election - a bit like staff in the break room of the hospital happily chatting about the game as a long parade of ambulances gets loaded up and heads towards it, no? <br /><br />CAT, which apparently needs a weak dollar and strong China for sales growth, is up 80% from its Feb lows - hmmm. Whats that, ah, bridge repairs in Georgia from Trump's infrastructure spend - all good then. washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-52868788342964665462016-11-17T09:38:40.859+00:002016-11-17T09:38:40.859+00:00'Bitcoin'. Coincidentally I was in the US ...'Bitcoin'. Coincidentally I was in the US last week and sharing a table with a couple whose son joined us. Turned out he worked finance in the US specifically working on bitcoin systems with various National and corporate bodies. Naturally I was interested. He summarised it that their inside collective assessment was that Bitcoin was akin to the Internet in the late 80's in terms of it's development process.<br /><br />Re bonds for me it's become the story where shorts need to think they are going to be countertrend trading. Doesn't mean that won't make money ,but it does mean hit and run. I think it would be a mistake to think bonds are going back where they have been. I appreciate the 3 sigma event etc ,but exactly what was this ludicrous move of recent years in terms of deviating from norms ? Such a snapback might see extreme ,but not when viewed in terms of the context of the prior move which was even more extreme. I'm with Gundlach and Dallio on the future outlook.<br />Thanks for the China assessment. With eyes turned to US and Europe it wouldn't be the first time if something came out of left field to provide the next issue.checkmatehttps://www.blogger.com/profile/03688082792316894545noreply@blogger.com