tag:blogger.com,1999:blog-34323687.post7660608567317676487..comments2024-03-28T00:23:22.838+00:00Comments on Macro Man: Musings on the flatness of the ED curveMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger48125tag:blogger.com,1999:blog-34323687.post-49407504198848756132016-08-27T17:15:41.239+01:002016-08-27T17:15:41.239+01:00
Are you in need of a loan? Do you want to pay off...<br />Are you in need of a loan? Do you want to pay off your bills? Do you want to be financially stable? All you have to do is to contact us for more information on how to get started and get the loan you desire. This offer is open to all that will be able to repay back in due time. Note-that repayment time frame is negotiable and at interest rate of 3% just email us Abdallah.afandi@financier.comfunloanfirmhttps://www.blogger.com/profile/06814665300514883570noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-80289443603495320972016-08-25T08:30:03.590+01:002016-08-25T08:30:03.590+01:00"checkmate, nothing personal, just practical...."checkmate, nothing personal, just practical. Our host might remember the arguments we had back when on homebuilders; his question then was, fine, sell, but when do you buy?"<br />In answer to your question the majority of my cyclic (multi year hold) buying is what I call distress opportunities which are usually to be found post capitulation when selling is for the most part on the way to being exhausted and valuations are book value cheap NOT simply cheap on a recency basis.<br />Put away any ideas of timing a bottom per se . Be prepared to be on the wrong side of sentiment for awhile. Do not be afraid of being a bit early. Buy because fundamental analysis tells you the market is once again completely and utterly wrong as to where the value is. The biggest issue here is discipline because opportunities iike this don't tend to sit up and present themselves that often. <br />checkmatehttps://www.blogger.com/profile/03688082792316894545noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-52537273766148565022016-08-25T07:27:20.822+01:002016-08-25T07:27:20.822+01:00@Checkmate - Bottomline is greed makes idiots out ...@Checkmate - Bottomline is greed makes idiots out of many people. Must create some kind of neural blind spot.<br />Good read here: <br />https://www.amazon.com/Hour-Between-Dog-Wolf-Transforms/dp/0143123408<br />Testosterone is the neural blind spot.<br />NoEnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-36650403251437165212016-08-25T07:16:59.084+01:002016-08-25T07:16:59.084+01:00I made a few good fx calls as an anon recently : d...I made a few good fx calls as an anon recently : dollar weakness in august, EU at 1.1250 and then 1.1350, long NZDUSD at 0.71 in particular. I'll use that alias from now on. <br /><br />This end of august is a little murky and things should get clearer in the coming weeks but still here are my thoughts :<br /><br />EU could made another push higher from 1,12/11 area before really turning lower<br />GU seems to be making the same post brexit pattern than EU, if result should be the same that would be 1.36.<br />AU and NU almost reached the areas I had in mind, flat for now but still inclined to buy it on pullback or short from higher levels. 75/7550 first area of interest on AU.<br /><br />@johno, watching AUDNZD closely around here, as it could be up for a remake of the november/february bottoming process.Special FXnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-47122857513400121772016-08-25T00:22:05.838+01:002016-08-25T00:22:05.838+01:00Read Dbanks Cryan via Handleslatt, via Zhedge.
At...Read Dbanks Cryan via Handleslatt, via Zhedge.<br /><br />At the end of the day, current monetary policy is bonkers and about to suffer the adverse affects.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-67757140712207445952016-08-24T23:09:31.413+01:002016-08-24T23:09:31.413+01:00A few of the themes we discussed this week get an ...A few of the themes we discussed this week get an eloquent airing here, notably pension funds selling puts and vol of vol.<br /><br />http://seekingalpha.com/article/4001700-news-tina-land?source=marketwatchLeftbackhttps://www.blogger.com/profile/07728096415928915882noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-21745900784111786842016-08-24T23:02:47.781+01:002016-08-24T23:02:47.781+01:00$MBB back up at $110 ...... just a few pennies fro...$MBB back up at $110 ...... just a few pennies from new alltime highs <br /><br />its the ETF that represents outstanding universe of GSE mbsAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-80477816419360571672016-08-24T22:37:10.803+01:002016-08-24T22:37:10.803+01:00"More worryingly, the [ED5/ED13] curve has be..."More worryingly, the [ED5/ED13] curve has behaved in a manner that generally characterizes an end-of-cycle environment rather than one that is stuttering to start." Nice observation, MM. And thank you again for your daily posts.<br /><br />The curve out to ED5 just looks too flat, given where UE is and how far Fed Funds is below the illusory "r-star" (plus inflation). Play via eurodollars or the USD? USD is cheap to rates, but is more muddied by BoJ and ECB considerations.<br /><br />Like Nico's analysis of bunds, restated today. A negative rate instrument is a greater fool trade, and greater fool trades are susceptible to crashes. What's the catalyst though? Core inflation still quiescent in the EZ ...<br /><br />I'm no pro when it comes to equities, but some saying Chinese PPI deflation will end later this year (forecasts on Bloomberg still at -0.8% for '17, but off -2.5% low). Chinese H shares are cheap. Didn't Russell Napier write a whole book about that being the time to buy an equity market? I bought some FXI calls today. What the heck.<br /><br />Do this blog's shrewd AUDNZD traders have a view on the cross here? The "mean reversion monkey" in me is tempted to get long.johnonoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-44275514924226768892016-08-24T22:22:09.039+01:002016-08-24T22:22:09.039+01:00http://m.independent.ie/business/irish/bailin-fear...http://m.independent.ie/business/irish/bailin-fears-spur-fbds-150m-move-to-bonds-34965247.html<br /><br />" Insurer FBD switched over €150m of its investments to corporate bonds over the past year because of the low returns offered by banks and the fear that new bail-in rules could see it lose its money......"Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-78987430773079350022016-08-24T22:06:45.793+01:002016-08-24T22:06:45.793+01:00Yeah, and one more case for Mr. Bund - "Cypru...Yeah, and one more case for Mr. Bund - "Cyprus is NOT a template".Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-27528249624685260722016-08-24T21:52:23.546+01:002016-08-24T21:52:23.546+01:00Bund at 0% makea sense if you are either worried a...Bund at 0% makea sense if you are either worried about having a large some on deposit (bail in) or you think eurozone/euro is gonna bust (Dmark). FBD insurance in Ireland moving out of bank deposits due to low rates and bail in risks. The thing about bailin rules is they can change them anytime they want. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-22912407878041707072016-08-24T21:08:24.008+01:002016-08-24T21:08:24.008+01:00and i am short 150 spoos at 2162 averageand i am short 150 spoos at 2162 averageNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-24880755035780915952016-08-24T21:00:40.437+01:002016-08-24T21:00:40.437+01:00It's interesting how many punters and commente...It's interesting how many punters and commenters seem to think that Icahn, Gundlach, Paul Tudor Jones, Soros etc are all Complete Tools and Dinosaurs and that the new Masters of the Universe are 12yoHFM and his vol selling ilk who are Backed By Janet and therefore Cannot Lose Money, because they Simply Know Better. We find the loud high-pitched squawkiness, moral certitude and overwhelming unanimity of such voices to be extremely interesting at this time. <br /><br />In the interests of full disclosure, we are short the following, fwiw, in varying size and with varying degrees of conviction:<br /><br />First, and with most certainty, what we view as the canaries in the coal mine (take a look at KOL for that matter):<br /><br />USO. Fundamentals, seasonals weak. Technicals mixed. RSI has turned down. Target $40 or lower.<br />GDX. RSI has turned down, 50 dma violated. Gaps at 26 and 23. Target $22.<br />SLV. RSI has turned down, 50 dma violated. Gaps at 17, 16.5 and 15.5. Target $15.5<br />IYR. RSI has turned down, 50 dma violated. Gaps at 81 and 79. Target $78.<br /><br />Next, with moderate certainty, we are looking at three currency pairs that seem ripe for the picking:<br /><br />CADUSD. RSI has turned down. Target 0.7450<br />EURUSD. RSI has turned down. Target 1.0800<br />AUDUSD. RSI has turned down. Target 0.7400<br /><br />One more waiting in the wings:<br /><br />GBPUSD. Target 1.2800<br /><br />Finally, with less certainty (because CBs Will Never Allow Them to Go Down) the main event:<br /><br />IWM. Gaps at 119, 117, 115, 111 Target 108. <br />QQQ. Gaps at 116, 110, 109, 105 Target 102. <br />TLT. Gaps at 139, 137, 135 Target 132. <br /><br />We are also long UUP (Target 25.50), and long vol (the latter for amusement and to violate 12yoHFM's world view).<br /><br />Gaps get filled. Mean reversion always occurs, no matter how long the wait.Leftbackhttps://www.blogger.com/profile/07728096415928915882noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-64163589664367031792016-08-24T20:39:20.429+01:002016-08-24T20:39:20.429+01:00Thanks for the thoughtful responses, folks, apprec...Thanks for the thoughtful responses, folks, appreciated.<br /><br />Nico, can't say it makes sense to me to be long Bunds at 0, but someone must be.<br /><br />LB, what's the obvious message of weak commodities and RE?<br /><br />washedup, makes sense, but there I get gunshy. Bonds looked expensive last year, too.<br /><br />checkmate, nothing personal, just practical. Our host might remember the arguments we had back when on homebuilders; his question then was, fine, sell, but when do you buy?<br /><br />Zorba, isn't a TN move to 2.5% only a 10% cut in the bond? Maybe my math is wrong.<br /><br />Not to be all short-termy, but ES is as noted suddenly down sharply, while TN is flat.wcwhttps://www.blogger.com/profile/16307608293310560164noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-3212503130640079962016-08-24T20:31:56.555+01:002016-08-24T20:31:56.555+01:00$VIX moving up big this afternoon, currently +9.94...$VIX moving up big this afternoon, currently +9.94%. Last: 13.61Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-67201712547154379702016-08-24T20:10:33.505+01:002016-08-24T20:10:33.505+01:00BTW, I was just leaving university when Volcker wa...BTW, I was just leaving university when Volcker was casting the moneychangers out of the temple. JBTFD in bonds has worked beautifully through my entire investing career, but it took me to long to grasp it. The punishment was taking two ridiculous drawdowns. Lesson learned. Barba Harilaoshttps://www.blogger.com/profile/13112902282786676127noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-3390544081749233802016-08-24T19:57:00.531+01:002016-08-24T19:57:00.531+01:00@Nico - we're fat and happy with the TNX all t...@Nico - we're fat and happy with the TNX all the way up to 2%; if we get to 2.5% and take out the 2015 high, then we'll have another look - even then only for tactical positioning. Soundly in the deflation camp, waiting for someone to convince us we aren't all going to follow Japan down the hole.Barba Harilaoshttps://www.blogger.com/profile/13112902282786676127noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-3181061799241556142016-08-24T19:00:17.560+01:002016-08-24T19:00:17.560+01:00@checkmate:
"I know my view is meaningless t...@checkmate:<br /><br />"I know my view is meaningless to policy makers ,but if this is not the time for them to move the bond market away from the trough then I do not know when the time would be better."<br /><br />Do you have children? Because your advice is the advice of a good, thoughtful parent confronting a selectively-deaf child. After enough warnings, you have to put real consequences on the table. In our family, it is the removal of screen time. Suddenly, rooms get picked up, dinners get finished and teeth are brushed.<br /><br />There is also another class of children and parents. These parents also verbalize consequences for improper behavior. The children, though, instead of returning to the correct path, throw a massive tantrum. Nervous, sleep deprived, busy, etc. parents respond by backing off the consequences. Some even reward tantrums with QE.<br /><br />MrBeachnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-13729533349694664772016-08-24T18:48:51.126+01:002016-08-24T18:48:51.126+01:00@LB: Trying to understand the short thesis on IYR....@LB: Trying to understand the short thesis on IYR. Is it a bet on interest rates going up and hence yield names to go down, along with the bubbly levels of REIT on questionable US economic strength?Pandahttps://www.blogger.com/profile/05191480418685670630noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-25279866394146305152016-08-24T18:20:36.488+01:002016-08-24T18:20:36.488+01:00"Everyone's a genius in the rearview mirr..."Everyone's a genius in the rearview mirror." Talk about missing the point. Typically, it's foresight not hindsight and it isn't the stories themselves so much has the confirmation they add to what you already know by virtue of some fundamental analysis. After all that it's actually only a case of getting out of your own way. Neither is this supposed to be a tale of exquisite timing. In terms of the property market I was actually 12 to 18 months in front of any perceptible problems ,but there again the less liquid the market the more time you'd better give yourself to do the business. From my point of view it's always about value or a lack of. In the latter case I'm always gone and I don't care if people want to hang in there for another year or several years. It's immaterial to the decision.checkmatehttps://www.blogger.com/profile/03688082792316894545noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-74347071726080545592016-08-24T16:46:32.603+01:002016-08-24T16:46:32.603+01:00@wcw I hear you - good timing anecdotes are two a ...@wcw I hear you - good timing anecdotes are two a penny and tell us nothing in the here and now - that said, I have a useful checklist to identify whether we at least are in the middle of a bubble, because sometimes people even fail at that first step:<br /><br />1. Did the start of the rally have very sound structural underpinnings, and has slowly morphed into a stampede? <br />2. Is wall street research telling you things are a bit overvalued fundamentally while telling you in hushed tones in the after-dinner how they don't see the party ending because of 'flows'?<br />3. Has a new metric been invented to justify current and future valuation increases?<br />4. Have people, after having gorged on the asset class in question. moved on and started feasting on related asset classes that are totally separate markets with their own dynamics, but benefit, however mildly, from a continuing rally in the original?<br />5. Are people confusing the trade's crowdedness and consensus nature with confirmation, leading to an illusion of safety?<br />6. Are smart people realizing they are in the bubble coming up with excuses (oh it won't end without a blow off top and that'll be my signal to get out) to stay in it?<br /><br />I would humbly submit that treasuries currently check off all these boxes - I would further submit US equities, especially utilities as exhibit A for 4., but perhaps not a bubble in its own right.<br /><br />And just remember, I have no clue on timing, just know when I'm in 1. washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-8735925551286413922016-08-24T16:40:56.419+01:002016-08-24T16:40:56.419+01:00Commodities are quietly being taken out behind the...Commodities are quietly being taken out behind the woodshed today and beaten with the ugly stick. Gold, silver, oil. Some of these big punters who are selling represent a more well-informed group of investors. Can we learn from this price action?<br /><br />Large moves in markets are sometimes mind-numbingly obvious in retrospect, had we been paying attention to interesting market signals. LB likes to look around for little puffs of smoke above the trees, that might be early indications of a forest fire.<br /><br />Gold, GDX and the IYR are all trading weakly and have all broken through the 50 dma decisively today. Silver did the same a few days ago. You can stick a fork in them, they are done. We expect crude oil to follow this pattern in short order, followed by the associated FX pairs (CADUSD, NOKUSD, RUBUSD etc..). Reflatus interruptus, my friends, the great Dash For Trash rally of 2016 is coming to a close - it's time to give Bucky a great big hug.Leftbackhttps://www.blogger.com/profile/07728096415928915882noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-13429423375816850152016-08-24T16:29:28.167+01:002016-08-24T16:29:28.167+01:00wcw it is not about shorting bonds yet - it is abo...wcw it is not about shorting bonds yet - it is about NOT buying them and/or selling your bond holdings if you've been lucky to ride the gravy train. ECB rate was 4% in 2008 and 0% today, when everyone is trying to tell you that all is fine and negative rates are here to stay it becomes a dangerous fairy tale. Many banks are resisting charging their customers negative rates on their deposits (EUR, CHF) because it is commercially awful to do so. But they will lose more and more money if they don't. SOme folks with common sense still think negative rates are temporaty and normalisation is warranted. Throughout the blogosphere it is starting to sound like a party of very spoilt brats expecting bonds to still go up and up. From here?? come onNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-10049533278420077572016-08-24T16:18:29.791+01:002016-08-24T16:18:29.791+01:00As someone with scars from both the first tech bub...As someone with scars from both the first tech bubble and the housing bubble, I find these anecdotes amusing. Everyone's a genius in the rearview mirror. No genius myself, I remember well how painful it was to be even the slightest bit early for either turn. Ouch.<br /><br />So, if there is a bond bubble, who here has scars already, and why now and not in a few years?wcwhttps://www.blogger.com/profile/16307608293310560164noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-22610147796942703622016-08-24T16:06:47.734+01:002016-08-24T16:06:47.734+01:00Yes, the stories are right up there with non prope...Yes, the stories are right up there with non property pros telling me why property couldn't go down and why it could keep going up at 10%pa even though on questioning these same people admitted their earnings at the time hardly ever increased by more than 3 to 4%pa. That was summer of 2004 and prompted me selling out in 2005 and 06 tax years. Bottomline is greed makes idiots out of many people. Must create some kind of neural blind spot.checkmatehttps://www.blogger.com/profile/03688082792316894545noreply@blogger.com