tag:blogger.com,1999:blog-34323687.post4337754733745675926..comments2024-03-28T12:22:11.704+00:00Comments on Macro Man: Would you lend money to this man?Macro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger58125tag:blogger.com,1999:blog-34323687.post-5279803505003761982016-04-14T01:14:21.145+01:002016-04-14T01:14:21.145+01:00Any version of SPX RULZ, SHORTZ ARE FULZ is an aut...Any version of SPX RULZ, SHORTZ ARE FULZ is an autodeleteMacro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-8943917082152896182016-04-14T00:13:44.672+01:002016-04-14T00:13:44.672+01:00This comment has been removed by a blog administrator.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-18043837399776047762016-04-13T23:42:47.346+01:002016-04-13T23:42:47.346+01:00Thanks for the japan comments anon 3:52, I agree m...Thanks for the japan comments anon 3:52, I agree mostly. <br /><br />Its kinda funny when we talk about LT being 3 months. anyways, if that is the time frame the market focuses on, which I think is correct, then maybe we should look at the data which in most places has clearly gone from "oh shit, were are freefalling" to "greenshoots" Guess what, that is the time you make the most money in the markets, bc of short covering and deep value bounce backs. PMI's are slowly improving, shit even China PPI stopped going down. THIS IS WHAT THE MARKET CARES ABOUT. expectations were getting so low, now they are still low, data is still crap but not WORSE than expectations. get it?<br /><br />XME still powering higher. Not an expert there, but do think we have way too much capacity and this is a good LT short, but then again so does everyone else. Look at price action, as long as it goes higher, play from the long side, IMO. That along with Oil, HYG and EM FX stable is a good risk on sign. I dont know how long it lasts, but for me, its what I am looking at. <br /><br />I didnt dig into the bank #'s but at first glance this is really good news for markets abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-61077215702393093412016-04-13T22:45:06.201+01:002016-04-13T22:45:06.201+01:00The S&P went from red for 2016 to new 2016 hig...The S&P went from red for 2016 to new 2016 highs in 2 days. WTF??? What is everyone missing???Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-105277682466350442016-04-13T22:35:31.985+01:002016-04-13T22:35:31.985+01:00Lots of crazy anon comments the last few days, fol...Lots of crazy anon comments the last few days, followed by large moves higher in equities. Nikkei and Eurostoxx up over 3% today alone. Interesting.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-32466221011574258142016-04-13T21:31:06.022+01:002016-04-13T21:31:06.022+01:00Motorcycle license plate outside GS offices today ...Motorcycle license plate outside GS offices today - SLLVOL Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-20761631208120355522016-04-13T20:08:18.806+01:002016-04-13T20:08:18.806+01:00Anon 7:41
There is no "end". No need to...Anon 7:41<br /><br />There is no "end". No need to be focused on fear-mongering.<br /><br />You can protect your wealth by getting long equities in size as they break out into new highs and later by hedging against inevitable inflation.<br /><br />The only catastrophe will be for those selling equities as central banks go to extreme lengths to inflate asset prices to hitherto unforeseen levels.<br /><br />You're welcome.<br /><br />Trollnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-30370063465490712382016-04-13T19:41:10.355+01:002016-04-13T19:41:10.355+01:00MM: "Macro Man cannot help but think that eco...MM: "Macro Man cannot help but think that economic historians will shake their heads in future centuries when they read about this whole sordid situation....While the end needn't come imminently, by the same token it isn't necessarily far away, either." <br /><br />Anyone legitimate person out there pushing back?<br /><br />How will we know the end is near? What should we be focused on?<br /><br />Can I protect my families wealth?<br /><br />How catastrophic will the end be?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-70023780518742702092016-04-13T19:35:50.316+01:002016-04-13T19:35:50.316+01:00Up to 775,000 $VIX calls now...wIth this steep boa...Up to 775,000 $VIX calls now...wIth this steep board as the banks start breaking out. insane. What am I missing?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-21697789729839978292016-04-13T19:11:32.281+01:002016-04-13T19:11:32.281+01:00Mr T - best I can tell, you are focused on the abs...Mr T - best I can tell, you are focused on the absolute level of FCF which is in fact quite healthy, but that cash is shown the door quickly for share buybacks resulting in a large negative balance - I don't see an issue - that's consistent with what we know about the torrid pace of buybacks last few years. <br />FWIW its not clear to me this is as 'unsustainable' as its made out to be by the doomsdayers, unless of course either rates rise or spreads widen to the point where debt fueled buybacks become infeasible. If we were already past that point equities would be a lot lower than they are, so we clearly are not.washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-53806497929576183782016-04-13T17:54:55.407+01:002016-04-13T17:54:55.407+01:00Good to see Japanese and European equities shootin...Good to see Japanese and European equities shooting higher this week. Definitely looks like the bottom is in, and with the bearish sentiment prevailing we should continue to get lots of short covering. Time for the bears to stay wrong or get long methinks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-14077423220390477842016-04-13T17:38:52.139+01:002016-04-13T17:38:52.139+01:00also just to add a quick EQS on SPX-ex-financials ...also just to add a quick EQS on SPX-ex-financials shows TTM OCF of around $1.5T with FCF of about $886B. That is completely at odds with how I look at this plot.Mr. Tnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-26450649085933253622016-04-13T17:34:22.589+01:002016-04-13T17:34:22.589+01:00can someone explain the last cashflow chart to me?...can someone explain the last cashflow chart to me? What is this - FCF / OCF? Any idea on how this is weighted? Sum across the SPX? Its weird because at least at the universe's I look at in the US the FCF generation is healthy and looks curiously cheap relative to other asset classes.Mr. Tnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-88276059935853466962016-04-13T17:11:38.959+01:002016-04-13T17:11:38.959+01:00CB negative rate enthusiasm isn't universal an...CB negative rate enthusiasm isn't universal and some influential European voices (Blanchard) have expressed opposition. Negative rate clearly didn't have the intended effect in Japan and seem to be harmful to loan growth in Europe. <br /><br />Still, they are thought to be "stimulative" so removing them would be perceived as tightening. Draghi and Kurada might want to eliminate negative rates, but they wouldn't want to tighten or be perceived as tightening. Does anyone have an opinion as to how they might back out of negative rates without out tightening or "tightening"?<br /><br />ThanksDownWithTheBeanCountersnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-88143512210971668212016-04-13T16:13:10.291+01:002016-04-13T16:13:10.291+01:00Gav in his FT blog last week likened the Fed actio...Gav in his FT blog last week likened the Fed actions to something akin to a 'monetary shock' when assessing the Fulcrum models, meagre though it may have seemed at the time.<br /><br />".....The subsequent recovery was mainly due to one big cause, ie a very large monetary policy shock from the Federal Reserve as the Federal Open Market Committee’s previous determination to “normalise” interest rates in the face of a rising dollar was summarily abandoned...... "<br /><br />John Authers in another good article today states what many here think; that expectations for this quarter's earnings are so low that they are likely to provide short term impetus in the markets, but questions where profit growth may come from in the medium to long term future for extended valuations (weak dollar and higher commodities maybe?).<br /><br />Together the two articles put a compellng case for "stronger for longer". Certainly the action is more like a breakout to another leg higher than a 'pop'. <br /><br />Warning: I've been known to be wrong many times before. Badly. ;-)<br /><br />(member of the 3-month Macro gang)<br /><br /> Alhttps://www.blogger.com/profile/14381013196081166483noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-65303237028356043232016-04-13T16:03:26.272+01:002016-04-13T16:03:26.272+01:00Thank you for the discussion on corporate bond wor...Thank you for the discussion on corporate bond world, informative for a tourist here.<br /><br />I did notice that EMB is approaching to its pre-July 2015 level, that is before China's devaluing and everyone . If anything is going to happen, EM bonds surely will be the first domino to fall, right?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-83388175070634044462016-04-13T15:52:35.115+01:002016-04-13T15:52:35.115+01:001) The strong yen is part of a generalized weak do...1) The strong yen is part of a generalized weak dollar move (UUP) triggered by the cancellation of the next seven Federal Reserve interest rate hikes brought on by the January stock crash. The Chinese stock crash poured gasoline of the flames.<br /><br />Over the long term, interest rate differentials explain all foreign currency moves, and the greenback just gave up its advantage.<br /><br />2) A lot of hedge funds ended 2015 with large short positions in the yen, making them ripe for a short squeeze.<br /><br />In fact, the net trader’s position swung from a short of 30,300 futures contracts in December to long 50,000 contracts in January. This is a humongous swing of $9 billion in underlying.<br /><br />Since then, there was been a continuing cycle of traders reestablishing shorts based on poor Japanese fundamentals, then getting stopped out, and repeating the cycle again and again, taking the yen ever higher, and the P&L’s of traders ever lower.<br /><br />3) April is the beginning of the Japanese fiscal year, and the yen is always strong as Japanese repatriate foreign profits to invest in Japan and avoid local taxes.<br /><br />4) Despite this massive move in the yen against the long-term economic interests of Japan, the Bank of Japan has not lifted a finger to stop it with more quantitative easing. Negative interest rates only made the yen stronger. As central bank meetings came and went with no effective action, new yen buying waves were triggered.<br /><br />You really have to ask the question of “How stupid can a government get before they do the right thing?” The answer, to the pain of many forex traders is “A lot more stupid than you think.”<br /><br />5) The truly amazing thing is that the strong yen continued in the face of a massive capital flight from Japan fleeing the country’s new negative interest rate policy.<br /><br />According to Japan’s Ministry of Finance, some $3.2 billion left Japan for sunnier climes and higher interest rates in January, followed by $27 billion in February and a staggering $53 billion in March. This enormous outflow will continue for the rest of this year. Notice the hyperbolic increase.<br /><br />6) Even more amazing is that the yen has continued to appreciate in the face of huge sales of Japanese stocks by foreign investors in Q1, some $63 billion. They are seeking to duck the hit Japanese corporate earnings will take from the strong yen. Some 10% of the total Japanese foreign earnings have vaporized in just three months.<br /><br />All of this is proof that this is not your father’s trading markets. All asset classes are trading totally differently than they have in the past.<br /><br />The last time I experienced conditions like this it was in Japan in the early 1990’s, right at the onset of a 20-year financial and economic crash.<br /><br />Real individual and institutional end investors had totally abandoned the market. All that were left we an odd assortment of hedge funds, bank proprietary books, and spivs.<br /><br />After the initial six month, 50% crash in the Nikkei Average, nobody made any money. Traders were just batting the same stock back and forth like in a ping-pong match, with little net overall movement.<br /><br />In other words, it was a trader’s worst nightmare. No one earned even enough to cover their nighttime sushi and Suntory Whiskey bills. And this went on for two decades.<br /><br />I don’t think this is happening right now in the US. Still, the similarity is unnerving.<br /><br />So what happens next?<br /><br />As we approach the second half of 2016, the prospects for a new round of Fed rate raises will return. When that happens, it is back to the penalty box for the yen as its dire fundamentals reassert themselves once more.<br /><br />I expect it to quickly give up all of its gains for this year and maybe more. One can only hope.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-42492100436446297632016-04-13T15:28:06.791+01:002016-04-13T15:28:06.791+01:00BUY THE DIP IN EQUITIES !!!!!!!!!!!!!!!!!!!!!!!!!!...BUY THE DIP IN EQUITIES !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-23656312472895995352016-04-13T15:19:24.349+01:002016-04-13T15:19:24.349+01:00well if you like that Sanofi 0%, then you should b...well if you like that Sanofi 0%, then you should be all over Allianz 4y which has just priced today with a 0% coupon also (though actually issued at 0.11% yield). 2and20https://www.blogger.com/profile/17253850117517112482noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-9920752900645711102016-04-13T15:01:11.697+01:002016-04-13T15:01:11.697+01:00Boog - dollar price action last couple of days is ...Boog - dollar price action last couple of days is very ST bullish in the context of a sideways wedge formation within a bull trend, which is almost conservative, technically speaking. <br />Pol - somedays I feel the anon's comments may even be model generated. I was just looking at recent tick charts on spoos and I do see your point, smacks of algo buying for sure.<br />@Anon 2:25 trust me I am rooting for you - for obvious reasons your profit is positively correlated with the overall quality of comments on this board!washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-91038992663207244392016-04-13T14:40:45.034+01:002016-04-13T14:40:45.034+01:00Zero % on Sanofi sounds pretty good compared to lo...Zero % on Sanofi sounds pretty good compared to loosing $6.5bn on Peabody credit. The value of our liabilities reflects the failure to address overcapacity. Aethelstannoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-33022267090364475872016-04-13T14:36:44.012+01:002016-04-13T14:36:44.012+01:00Washed- I was thinking DX was bottoming around her...Washed- I was thinking DX was bottoming around here, but I am beginning to think it might not bottom out until 90. There is still one rate hike priced in this year and expectations can go down further (to zero hikes this year), particularly if Q1 GDP is weak.<br /><br />I am thinking, one further rally with an OPEC meeting induced oil bounce this weekend to the mid 40's, then things might fall apart from early May. Boogernoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-87064039454495432842016-04-13T14:25:53.023+01:002016-04-13T14:25:53.023+01:00re washed- i agree with short these but feels its ...re washed- i agree with short these but feels its the us -spx and iwm is what I'm lining up.....europe and japan have got trashed and the elastic can only get stretched so much...i'm underwater on spx shorts 2050 but adding on bounces...have got calls as stops given how low premiums are and how big skew is<br />price action today will be telling- if opening gap closes i think we head to 2000 in quick timeAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-59922631259684452492016-04-13T14:22:50.835+01:002016-04-13T14:22:50.835+01:00Washed.. check the time of yesterdays upswings. 3....Washed.. check the time of yesterdays upswings. 3.30 ldn 10.30 ny. I first noted it here when jbtfd would come on comments. Odd yet specific timing. Still think it smacks of models.but those 3.30 booms normally follow through all day and did again. Odd but real.Polemichttps://www.blogger.com/profile/05985506596290073453noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-52197637857932971022016-04-13T14:17:47.620+01:002016-04-13T14:17:47.620+01:00@Boog yes I think we are looking at flat Q1 GDP - ...@Boog yes I think we are looking at flat Q1 GDP - pretty amazing considering where the estimates started from (2.5%) - I guess the global economy can matter to the mighty Younited states.<br />On the dollar if this is destined to only be a correction then its probably over right here around 93-94 - if the dollar bull market is done then its a different story.<br />Feels like europe and japan are better shorts than spoos just as long as one can withstand the occasional short squeeze like the one we are experiencing right now. Frankly the biggest bullish argument out there continues to be 'but everyone is so bearish and short' - I get it, but as bill clinton would put it, it depends on which one is everyone. Clearly someone is buying for prices to be challenging all time highs (sorry various anons its not CB's) - if its the CTA/quant types then sure, fundamentals don't matter for a while.<br />Got the discomforting feeling that you get as a trader when everything you watch tells you to be neutral but instinct tells you something big is about to go down - we will see. washedupnoreply@blogger.com