tag:blogger.com,1999:blog-34323687.post8703615235539861920..comments2024-03-29T15:07:48.008+00:00Comments on Macro Man: The blog-o-meter bottomMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger110125tag:blogger.com,1999:blog-34323687.post-80500186104484354442016-01-18T07:09:23.743+00:002016-01-18T07:09:23.743+00:00@ Bruce,
Must mean the IQ test is but full of jes...@ Bruce,<br /><br />Must mean the IQ test is but full of jest: By definition there are no solutions to unsolvable problems.<br /><br /><br /><br />PaucisVerbis Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-25092605171146376242016-01-18T05:02:25.051+00:002016-01-18T05:02:25.051+00:00China is the green tut tut that Friday buy should ...China is the green tut tut that Friday buy should be rewarded. It'd better be it's never too relaxing to hold long positions over a long week end but one gotta buy when they puke big.Nicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-55055246388505565682016-01-18T02:57:09.789+00:002016-01-18T02:57:09.789+00:00Nobody here is stupid or a genius.
...Nicely put...Nobody here is stupid or a genius. <br /><br />...Nicely put, Lefty. But what does it mean when you take one of those online IQ test thingys and it says "Quit your job immediately and advise world leaders about solutions to unsolvable world problems..."<br /><br /><br />Good luck tomorrow..Bruce in Tennesseenoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-86805374293042097052016-01-18T00:06:43.658+00:002016-01-18T00:06:43.658+00:00Michael Pettis on China last week:
http://www.val...Michael Pettis on China last week:<br /><br />http://www.valuewalk.com/2016/01/michael-pettis-china-gives-the-year-a-wild-beginning/Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-41953878721553380112016-01-17T23:59:23.516+00:002016-01-17T23:59:23.516+00:00"The Iranian stock index gained 1%, making it..."The Iranian stock index gained 1%, making it one of the best performing markets in the world with gains of 6% since the start of the year, while Saudi Arabia's Tadawul All Share Index, the largest Arab market, collapsed by 7% intraday, before recovering to end down more than 5%, its lowest level in almost five years."<br /><br />http://www.wsj.com/articles/iran-tempers-expectations-on-oils-return-to-global-stage-1453033634<br /><br />There's a lot of irony in those stats! Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-751457112225783942016-01-17T22:41:08.415+00:002016-01-17T22:41:08.415+00:00I don't think anyone here rules out anything. ...I don't think anyone here rules out anything. This kind of comment is a bit annoying. Nobody here is stupid or a genius. Nobody here is always right or wrong. We are all engaged in calculating a great big probability matrix every day that we trade/invest.<br /><br />If there is "recency bias" it is currently being expressed by those who are looking closely at last week's/month's action. Or to put it another way, most of us are at the poker table trying to remember what cards remain to be drawn and playing the odds based on our own personal experience of watching a lot of similar games, then deciding whether to stay at the table given the hands we have been holding.<br /><br />A lot of people are ruling out a relatively dull winter of slow US growth, low rates, so-so earnings and a slowly reversing dollar, with a modest commodity, EM FX and equity recovery. No recession, just slow and low. The Treasury market and FFR futures are predicting a lot of this right now, however, just as the Treasury market predicted a slowdown in US growth and lower US inflation in Q4. To me the "recency bias" begin expressed at the moment is expecting every week to be like the last.<br /><br />Btw we agree with the comments re: Iran, that agreement has been well telegraphed and the change in projected oil supply/demand balance as of tomorrow morning will be zero. If oil declines further it will simply be a result of leveraged bets being unwind. If you want to see some signs of capitulation, take a look at MENA markets today, especially the Gulf. The bloodbath in energy is much nearer the end than the beginning.Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-38786151570089928742016-01-17T21:53:01.258+00:002016-01-17T21:53:01.258+00:00Anon 7:45 "It is amazing that people generall...Anon 7:45 "It is amazing that people generally still rule out the possibility of further carnage in equities"<br /><br />Indeed. This is because they are both stupid and blind. I think the psychological term is "recency bias".Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-51861622731667952582016-01-17T21:28:09.517+00:002016-01-17T21:28:09.517+00:00MrBeach thanks for the articles. Just goes to show...MrBeach thanks for the articles. Just goes to show how much the oversupply situation is hanging by the thread. And Iran has already been selling oil to China for a long time, something like 500-600k/bpd regardless of sanctions anyway. We're going to have and have had a two bladed sword - sell the rumor and sell the news.<br /><br />I think the likeliest scenario like washedup said is that we're currently in a "bottomish" position of a future trade range. Before we get in the trade range, it needs to undershoot significantly below the range first as every trend follower pukes it out following all the bear headlines. I don't believe the $10 stuff, I think $20 (or in the event overshoot goes to $15) is an absolute bargain with basically 100% of North America and maybe 30% OPEC down under already, and at that level the majority of OPEC nations won't have enough left to contribute their social budgets and will get hurt. The thing distorting is certainly the US supply hedging running through 2016 and now apparently the Fed telling the banks not to mark energy credit to market. The way things have worked so far could mean that it will coincide the bottom for HY, equities and other related risk assets as well after the pukes end. What the Fed is telling banks to do should effectively mean that they're just depressing and delaying eventual blow-ups, but when they happen they'll be that much bigger. The future supply CAPEX that never happened should eventually come back to kick the extrapolating deflationistas in the groin as well. <br /><br />It's just a pendulum with an extremely wide radius I think. But next week might indeed all be about the puke-overshoot grand finales.hipperhttps://www.blogger.com/profile/10934536233703452719noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-78780736275059357092016-01-17T19:45:28.139+00:002016-01-17T19:45:28.139+00:00Mr.Beach. oil has sold the news too. See the last ...Mr.Beach. oil has sold the news too. See the last 3 opec meetings. Oil has sold any geopolitical event. Oil would sell its mother if it could. But sure, if we keep calling bottoms, we'll get it eventually. <br /><br />I've mentioned this guy before and, if you want to know where it's at with oil, follow @energyrosen on twitter. A bit surprised i've never been thanked for that one over the last 12months. Even if I am anon!<br /><br />It is amazing that people generally still rule out the possibility of further carnage in equities (despite Nico and 1/2 others) when we have had the worst start ever, commodities are fubar, geo politics is the biggest mess in a long time and ventral banks have hit the wall. Bear markets pretty much everywhere except the big one...yet.<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-30225501619183155762016-01-17T19:15:37.857+00:002016-01-17T19:15:37.857+00:00"However, a 2007–2009 redux will not occur in..."However, a 2007–2009 redux will not occur in 2016. The underlying source of the credit that has dragged down the market originates from central banks. We believe the power of very low interest rates stretched over a long period of time will continue to fuel higher asset prices. A discount rate of zero, 1%, or even 2% results in very large numbers for asset pricing." <br /><br />"Broad-based market sell-offs such as the one in which we find ourselves are set-ups for massive bull entry points." <br /><br />"Hope is not a strategy. And fear provides the entry signal."<br /><br />http://www.cumber.com/the-greenspan-put-or-the-yellen-bid/<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-91549289188358768222016-01-17T19:15:35.023+00:002016-01-17T19:15:35.023+00:00IMHO, Iran's oil coming on market this week ma...IMHO, Iran's oil coming on market this week may mark a short term bottom to the oil rout. We have relentlessly sold the rumor, it is time to buy the news.MrBeachnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-7353555849871157792016-01-17T18:42:09.629+00:002016-01-17T18:42:09.629+00:00Art Cashin: Will the carnage across asset classes ...Art Cashin: Will the carnage across asset classes continue?<br /><br />To answer this question, Art draws on the research of SentimenTrader’s Jason Goepfert. Jason notes that the “S&P 500 has now corrected 10% from a near 52-week high for the second time in a relatively short span… this has only happened three times in the last 100 years – 1929, 2000, and 2008. Additionally, 90% of volume has flowed into declining stocks.”<br /><br />Jason assigns probabilities to three scenarios going forward:<br /><br />1) Oversold bounce: 50%<br />2) Flush lower then bounce: 30%<br />3) Outright collapse of 5%–15%: 20%<br /><br />All three extreme events that Jason cites – 1929, 2000, and 2008 – share a common thread: serious deterioration in a sector of the credit markets. There is the source of the pain. The contraction of credit reverses the multiplicative power of credit.<br /><br />http://www.cumber.com/the-greenspan-put-or-the-yellen-bid/Jimhttps://www.blogger.com/profile/11693354139038135784noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-88801221866019393812016-01-17T15:52:44.845+00:002016-01-17T15:52:44.845+00:00CONTAGION...Coming to a theater near you
"A ...CONTAGION...Coming to a theater near you<br /><br />"A contagion is possible at any time. Whether we are heading for a contagion in 2016 is unknown. It will not be known until it is visible. If it happens, it is likely to develop without warning."<br /><br />"The sequence of a meltdown in a contagion is unpredictable. Someone owes and cannot pay. But who is owed and how much is leveraged is not visible until the situation blows up. That is what the high-yield fund scandal is all about. So which sector of junk suffers first is not the issue. The linkages among institutional holders like the Third Avenue fund reveal the trouble spots in the system. Stephanie Pomboy (MacroMavens) notes that, “In the six years since 2009, junk-rated debt has doubled to $2t from $1t, taking it to one-third of the US corporate market.” Last year, after the Third Avenue revelation, we quoted research by Morningstar that listed some high-yield funds that were troubled. Some of them had exposure to foreign debt with currency hedges. We quoted from a Nuveen public document that permitted 20% of the fund to be positioned in this way. Those Nuveen funds were near the top of the Morningstar list. The Third Avenue fund was at the very top. It now has gated investors. “Gated” means the fund will not pay investors immediately if they redeem."<br /><br />http://www.cumber.com/contagion-risk-big-banks-junk-funds/Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-58408295215785498102016-01-17T15:32:44.921+00:002016-01-17T15:32:44.921+00:00Seems to me if you are trading you want to fade th...Seems to me if you are trading you want to fade the rallies in risk assets until the market shows otherwise (stops making new lows on successive dips, etc). For longer term and long only equity positions my focus is on quality. Suspect value and dividend growth may come back into fashion. After the medics finish carting the dead and wounded off the field of course.Barba Harilaoshttps://www.blogger.com/profile/13112902282786676127noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-43597076021343494232016-01-17T12:56:56.141+00:002016-01-17T12:56:56.141+00:00I am not sure what "it way may be it" me...I am not sure what "it way may be it" means...it is early..Bruce in Tennesseenoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-21145388867083262832016-01-17T12:56:03.455+00:002016-01-17T12:56:03.455+00:00Article from UK Sunday (today's) papers: "...Article from UK Sunday (today's) papers: "Middle East stock markets crash as Tehran enters oil war". Summary: more oil supply, more downward pressure on crude, Dubai & Saudi equities down 42% and 38% respectively. Fun & games...<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-12789810865118828962016-01-17T12:48:49.095+00:002016-01-17T12:48:49.095+00:00@anon @4:01
I used 17k...and my thinking was that...@anon @4:01<br /><br />I used 17k...and my thinking was that 1. I didn't and don't believe ZIRP and QE actually changed demand, and we had a Fed governor admit they brought equity prices forward, and probably had used up ammo that they don't have now. 2. I had to pick something that would not get me churned into butter, as you recall the Dow would go up and then go down and investors were like a car spinning its wheels. I figured if the market could convince me it wanted to go down, I was willing to take the chance, and 17k made me think the long stalled market was ready to correct.<br /><br />...Look, I love Lefty's posts. He's awfully sharp. But sometimes in markets it gets back to BF Skinner's operant conditioning....every time the bell rings on the DOW, the bulk of your trades need to be long, or instead of a food pellet, you get a shock in the wallet. Until you have an inflection point, and this seems like it way may be it...that's why they call it investment cycles rather than investment lines...<br /><br />Bruce in Tennesseenoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-73101098246805902862016-01-17T11:24:33.021+00:002016-01-17T11:24:33.021+00:00Abee,
I beg to disagree. In the end everything is...Abee,<br /><br />I beg to disagree. In the end everything is linked via the balance sheet but there are at least two differences between credit, especially distressed, and your typical ETF resp. equity.<br /><br />Liquidity in credit is usually thin compared to equity land (and I don't mean equity futures...). If you can trade 5 million of bonds, say, you are usually a happy man. Nowadays it is probably closer to 2. Compare that to your typical ETF.<br /><br />Second, if you own senior secured credit you usually become the new equity in case of bankruptcy. Whereas your equity becomes something between a lightly done muffin and absolute toast. It can make a lot of sense to buy some bonds for 20c if you can reasonably assume that you get back 40c after restructuring. If you buy the associated stock for 2$ you probably have a nice piece of toilet paper.Eddienoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-47815197574528704972016-01-16T22:56:42.795+00:002016-01-16T22:56:42.795+00:00Anon 9:48 here - article on someone who called oil...Anon 9:48 here - article on someone who called oil right.<br />http://www.marketwatch.com/story/fund-manager-whos-been-right-on-oil-has-a-depressing-new-prediction-2016-01-15?page=2?mod=mw_share_twitter<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-27976891341625765702016-01-16T22:32:49.019+00:002016-01-16T22:32:49.019+00:00US energy industry is on the verge of a subprime-l...US energy industry is on the verge of a subprime-like blow up:<br /><br />http://www.zerohedge.com/news/2016-01-16/exclusive-dallas-fed-quietly-suspends-energy-mark-market-tells-banks-not-force-shaleAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-52133082942387480312016-01-16T22:19:48.798+00:002016-01-16T22:19:48.798+00:00anon 9:48 - appreciate that color - need to get ba...anon 9:48 - appreciate that color - need to get back in touch with the old mates on oil vol desks - I did note wcs is $15 ish - pretty ugly - I don't think we get outright supply cuts, just ongoing capex cuts and plummeting costs - its never locally rational to cut production, which is why they haven't happened in 30 years and through worse downturns - that said, I do accept we may be towards the lower end of a more sustainable trading range (hence the earlier comment). <br />The Iran thing is funny - market is acting like the iranians will hit the bid on ice and nymex the day sanctions are lifted - plenty of factors may conspire to keep oil going down but that aint one of them.washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-7627317309914293392016-01-16T21:48:57.152+00:002016-01-16T21:48:57.152+00:00Washed, Thursdays bounce in oil was options puttin...Washed, Thursdays bounce in oil was options putting everything they had into protecting $30 expiry. They didn't give a damn after on Friday. Iran sanctions just lifted. Maybe, just maybe, this will bring a capitulation low during the week.<br /><br />Has to be some supply cut somewhere though. Look at what Canadian oil is trading at. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-46304243668651587952016-01-16T19:10:33.022+00:002016-01-16T19:10:33.022+00:00abee - I was convinced oil was done falling on thu...abee - I was convinced oil was done falling on thursday but the Friday price action has me a bit stumped - I think short energy equities vs long oil is a pretty decent risk/reward for what its worth.<br />As for China, this market is making a big mistake equating it to the 2007-2008 US financial crisis equivalent - things simply won't be allowed to move that quickly over there - this will be a very long drawn out affair with a decade long stagnation as opposed to a hard landing - CNY and CNH may be the closest we get to a 'market' response, but even there I am sceptical that specs will be allowed to have a quick payday a la swissie last year. People forget SNB was able to carry out their asinine defense for almost 3 years before they cried uncle.<br />Interesting pbservation on MoC buys - has that been a reliable signal of, well, anything in the past?<br />washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-10319032140632886962016-01-16T17:07:55.992+00:002016-01-16T17:07:55.992+00:00Oaktree's Marks was for sure talking about loa...Oaktree's Marks was for sure talking about loans and bonds in his letter, but it's all related nowadays. Distressed assets all have high commodity beta, along with value and low quality stocks. But at some point the price is asymmetric for a buy. <br /><br />This market is worried about FX specifically China, doing a one off devaluation, imo That is what is overhanging. Don't ask me what the odds are but until that clears the room, it's risk off. Also we need to see some divergence within risk assets. When beta is high among interest rates, fx and equities it's not a good risk on sign. Seeing financials outperform would be good too, but they are not even close. <br /><br />Apparently there were big market on close buy orders yesterday. <br /><br />But Be prepared for a swift move down next week if the same regime holds. Oil in the 20s is a screaming buy. Too bad the forward curve is still steep. Gs made a good note they you get bullish when the curve is flat. abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-84614855901003777762016-01-16T16:01:09.352+00:002016-01-16T16:01:09.352+00:00@B in T
Do you mind pointing out the DOW support ...@B in T<br /><br />Do you mind pointing out the DOW support level you used? Sorry if this question is too personal.<br /><br />Thanks,Anonymousnoreply@blogger.com