The Sunday updates remain on a "Holiday" type of schedule, with the combination of family/vacation/Xmas Shopping/etc... chewing away my weekend time. There are definitely some interesting things going on in Bond-land and commodities that are worthy of additional study. After the Holidays pass, I should be able to get more focused on these important markets.
As it stands, the S&P 500 and DXY are presenting some interesting risk/reward trades for the week ahead. The attached "Market Discussion" highlights some of these ideas.
Random Thought
So, Obama signed an $858bn Tax Cut Package last week in what many are calling a "compromise." It's funny how different people might consider, or define, the word "compromise." The dictionary defines the term as:
"A settlement of differences by mutual concessions; an agreement reached by adjustment of conflicting or opposing claims, principles, etc., by reciprocal modification of demands.
From what I can understand of the Tax Bill, both sides essentially got what they wanted--there was no compromise. We're just going to keep ringing up the bills for future tax payers. Awesome.
Of course those with "left leaning" tendencies predictably complained that the "rich" are not paying their "fair share." Whenever I hear someone saying something like that, I want to ask:
a) What do you consider "rich?"
b) What level of taxation is a "fair share?"
In terms of the last question, please consider the fact that the Top 5% Wage Earners in the United States already pay 60% of ALL TAXES. The Top 50% of Wage Earners basically pay all the taxes (97%).
The issue is not that the rich don't pay enough; the issue is government spending.
Here's a story of a "rich" business person:
Texas Prep Football
Congratulations to the Pearland Oilers who won the Texas State Champions (for the Largest Schools) by beating Euless-Trinity, the #1 ranked team in the country. Pearland is another large suburb/city of Houston. Two weeks ago, they beat our Katy Tigers in the Quarterfinals on a last minute touchdown pass. Yesterday they gutted out a tough game against a physically superior team in front of 43,000 people in Dallas Cowboy stadium.
Yeah, 43,000 people showed up for a HIGH SCHOOL football game!
Great charts. Thank you, Andy.
ReplyDelete"all the taxes (97%)"
ReplyDeleteIncome taxes you mean. That is only one of many "taxes", but it suits your agenda, so keep repeating this AEI figure.
Warren Buffett pointing out that he pays a lesser percentage in taxes than his assistant would be counter point number one.
Counter point number two is how sales taxes effect people on the lower end of the income spectrum. They are much less likely to be able to save. Any income they have is spent, and taxed.
Counter point number three- FICA. This only taxes the first 102k of income at 6.2%. Concerned about social security? Get rid of the cap.
Do the math on the tax rates between someone who makes 100k and 150k. Both in the 28% tax bracket.
They asked me, "Willie, why do you rob banks?"
ReplyDeleteI said, "That's where the money is?"
Taxes, same difference.
One day I started making a list of taxes (income, state, sales, etc...) and expanded it to fees and licenses... OMG, the list goes on forever!
ReplyDeleteJust on your car I could probably name 20 or so, sales, registration, smog, gas taxes(3 or 4), tire disposal, waste oil, LCD (if you get a built in GPS), it's unreal!
Then you add all types of insurances, you'd piss your panties knowing what % of your paycheck goes to all of the taxes, fees, licenses and insurance.
>> Of course those with "left leaning" tendencies predictably complained that the "rich" are not paying their "fair share." Whenever I hear someone saying something like that, I want to ask:
ReplyDelete>> a) What do you consider "rich?"
>> b) What level of taxation is a "fair share?"
In my book, the word "rich" applies in greater degree to people within the top 1% and on up.
What should tax rates be for people like Bill Gates and Warren Buffett?
What should tax rates be for people earning what Dick Fuld, Angelo Mozillo, and other captains of industry be? How about Walmart heirs?
You oligarchy supporters keep demanding lower taxes for the rich and want to play sophistry word games to pretend no one's rich.
>> In terms of the last question, please consider the fact that the Top 5% Wage Earners in the United States already pay 60% of ALL TAXES. The Top 50% of Wage Earners basically pay all the taxes (97%).
Because the top 2% already owns half the assets in the country, what would you expect?
And it only gets worse so long as you keep tax rates this low, because "compound interest is the strongest force in the universe".
The rich own this country. They don't meet face to face to plot anything. They don't have to. They contribute to lobbyists and the lobbyists write the laws.
ReplyDelete(Just because I hold these views doesn't mean I support deficit spending, public unions, or government-run service industries (like education).)
Fair enough points on the tax questions above. I mostly threw out there to instigate a response...
ReplyDeleteBS: Please don't use Warren Buffet as an example for anyone. He's a "different animal" in many respects.
Indeed, there are "other" taxes for sure, including, very importantly, the various "payroll taxes" like Medicare, Social Security, UI, etc...
So, how do you feel the government is using those dollars?
Your comments on the SS tax are illustrative. In the Great Society framework, everything you're "paying in," you'll theoretically receive back, right? Are you implying that you don't trust the Social Security system? Are you suggesting that Social Security acts just like any other "tax?"
If you are, then I agree with you. It's just interesting how far we've come from the creation of a "nice idea" to "help people out," to a huge bureaucratic nightmare that sucks money out of the system and contributes to mal-investment.
There are very few instances where government has lowered the cost of a service when they get involved in the process. (See: Medicare)
wunsacon:
ReplyDeleteYes, the "rich" own this country. It's the same as in 99% of the world. Idealistic Liberals like DSS/Denise will cite examples like Sweden or Germany as "nice" example where things might be different. But, it's like comparing apples to oranges in terms of demographics, resources and geography. It's impossible to draw direct comparisons...
Bottom line: Nothing has EVER been that different in the history of time. It's the same as it has ALWAYS been.
Please read an "Economic Interpretation of the Constitution" to understand the possible "other" motives our Founding Fathers had when they decided to revolt. Hint: It wasn't the "poor" people in the Colonies who were doing the "revolting."
The Philadelphia Eagles probably have the TWO most exciting players in all of football....
ReplyDelete"I'm just sayin'...."
Andy,
ReplyDeleteTaxes were much higher from the 1940's through 1980. It was a highly progressive tax structure. The wealth of the nation was being shared more equally by taking from the rich and giving to everyone else.
>> It's the same as in 99% of the world.
Ok, so you're drawing a comparison.
>> Idealistic Liberals like DSS/Denise will cite examples like Sweden or Germany as "nice" example where things might be different. But, it's like comparing apples to oranges in terms of demographics, resources and geography. It's impossible to draw direct comparisons...
But, a moment ago, you just said...? So, which is it: can or can't we make comparisons? A very smart guy (you, Andy T) suddenly can't make comparisons? Is this an example of Upton Sinclair's famous quote about "don't expect someone to understand something if their income depends on them not understanding it"?
>> So, how do you feel the government is using those dollars?
I'm pissed about parts of it. But, that's a separate question from how we fund it.
Maybe if the rich had to pay for more of the war expenses and more of the bailouts, they be less in favor of the stupid decisions that lead us where we are.
...
I'll revisit this quote again:
>> It's the same as in 99% of the world.
Not 99%. Maybe 95%. But, whatever. I don't care what China, India, and Russia do. Indeed, I want to do our best not to look like them.
>> Please read an "Economic Interpretation of the Constitution" to understand the possible "other" motives our Founding Fathers had when they decided to revolt. Hint: It wasn't the "poor" people in the Colonies who were doing the "revolting."
ReplyDeleteYour statement is consistent with some of the ideas presented in this movie:
http://metanoia-films.org/watchonline.php
Senator Bernie Sanders (I. Vermont) explained to the Senate during his tax cut filibuster on December 10 that the gap between the wealthiest Americans and the poorest is the greatest it has been in U.S. history. The bottom 50% of Americans own just 2% of the wealth. The top 1/10th of 1% takes home 12 cents of every dollar earned in America. The top 1% earned 23.5% of all income, more than the combined income of the bottom 50%.
ReplyDeletehttp://www.huffingtonpost.com/janet-tavakoli/in-third-world-america-yo_b_798598.html
We're totally becoming a 3rd world nation of have's and have-not's. And it was completely forseeable:
ReplyDeletehttp://www.askbutwhy.com/2009/08/sir-james-goldsmith-interview-on.html
It's all good for the top 1%, especially those in the finance sector. (Again from Janet's article: "Meanwhile, the financial system has strangled U.S. growth by parasitically growing from 3% of GDP in 1965 to 7.5% of GDP currently.")
wunsa-
ReplyDeleteTavakoli, and Goldsmith are waay more correct, than not..
but, "It isn't the Rates, it's the Rules."
have you peeked at The Federal Register, recently?
"Regulations" do far more to impede competition--the lack, thereof, creates the massive Wealth inequalities..
AAIP
30yr Bond 121.37500 +0.09375 +0.08
ReplyDelete10yr Note 120.250000 +1.031250 +0.86
NY Gold 1385.6 +6.4 +0.47
NY Silver 29.355 +0.222 +0.76
ibid.
wunsacon--
ReplyDeleteI promise to respond to you, but it's getting late for me here now, but you're a good guy, and I want to discuss these ideas with you.
Truth be told (ha ha), I don't have all the answers--nobody does!
We've all had different life experiences which give us certain perspectives on business/politics/laws/etc....
I can appreciate and hate the beast all at once.
I just wish it was a nicer "beast."
All this is nice, but all of you miss the main point. Until we have a balanced budget amendment, everyone left and right is at the mercies of the congress.
ReplyDeleteWhy would that pertain to the left? Because programs that should endure will be cut when spending is out of control, as some worthwhile programs are being now.
You establish a self-paying self-perpetuating system that pays 100% of the bills every year, and then you get what you want.
This way lies madness.
Ah, always love tax debates, turns into the same arguments every single time, like how above "BS" wants to stress the example by saying "they are both in the 28% bracket, do the math" but of course if one does the math they quickly find only a portion of that income is subject to 28% tax. In the case of a married couple filing jointly making 150k only 13k of that income is subject to a 28% tax. Regardless of whether or not that is "fair", they way in which it is presented is weak.
ReplyDeleteit's likely this person knows Andy T, since they claim he has an "agenda", then uses the phrase "you worried about SS", which is strange because I do know andy, and I doubt he thinks we need social security or that his "agenda" somehow has to do with him being gaga over the wealthy.
then the tax issue inevitably turns to the wealth gap, though I wonder, go ahead and make the top marginal rate 90% on the top 1% and see how it reduces the gap, I'm doubtful it would do much at all and as I'm to understand, when the top marginal rate was that high nobody paid at that rate anyway, which turns to what I think was Andy's point:
"The issue is not that the rich don't pay enough; the issue is government spending."
the stock response to this is fairly well known by now isn't it, "yeah, I don't like all the spending either, but what can we cut, you make a list of what you would cut"
just hint at starting cuts and then next thing you know there are riots in Boise because the police dogs didn't get their bullet proof vests this year and "they have feelings too" ya know.....
more of the same tired old left/right debate, sadly I'm thinking people should instead be discussing why we have federal taxes at all, though I'm sure some of you have plenty of answers for this one.....
"...I'm thinking people should instead be discussing why we have federal taxes at all,..."
ReplyDeleteMcB,
not that it was made clear, but that Q: is pregnant, within: "It isn't the Rates, It's the Rules."
also, ~"Steep and Progressive Taxation" is, really, one, of the 10, Plank(s) of The Communist 'Manifesto'..
but, nowadays, here, in our 'Free Market', it's taken as a 'Given'..
#2 on the Hit Parade (with a Bullet!)
http://www.libertyzone.com/Communist-Manifesto-Planks.html
AAIP
The Christie video at Mish's this morning makes it clear. 60 minutes video is defiinitely worth the time.
ReplyDeleteIf this were your family, you would see the same. Years of overspending (overspending as in spending more than you are bringing in), then the bill comes due, and you don't have the money for a coat for the kids...
I very much don't like the funding but not really funding aspect of any government. Years of not making your public pension payment. Now TSHTF. Medicare drug bill and no funding..same thing..and the examples are legion.
No, I hope this is resolved by a balanced budget amendment. The next twelve months should show how we as a nation intend to go forward with the fiscal United States. I wish I could say I am encouraged, but I am not.
http://www.bloomberg.com/news/2010-12-20/france-s-aaa-grade-at-risk-as-rating-downgrades-sweep-europe-euro-credit.html
ReplyDelete"France risks losing its top AAA grade as Europe’s debt crisis prompts a wave of downgrades that threatens to engulf the region’s highest-rated borrowers, with Belgium also facing a possible cut.
Moody’s Investors Service said Dec. 15 it may lower Spain’s rating, citing “substantial funding requirements,” and slashed Ireland’s rating by five levels on Dec. 17. Standard & Poor’s is reviewing its assessments of Ireland, Portugal and Greece. Costs to insure French government debt rose to a record today with the country’s credit default swaps more expensive than lower-rated securities from the Czech Republic and Chile."
AAIP,
ReplyDeleteyes, good points, as you say, it's revealing what we take as a "given" or what we treat as required.
@CV,
ReplyDeleteI'll see you on the dance floor next week holmes!
I'm listening to Eye of the Tiger right now!!!!!
CNSNews.com) -- At an all-day White House conference on "environmental justice," Homeland Security Secretary Janet Napolitano announced that her department is creating a new task force to battle the effects of climate change on domestic security operations.
ReplyDeleteSpeaking at the first White House Forum on Environmental Justice on Thursday, Napolitano discussed the initial findings of the department’s recently created "Climate Change and Adaptation Task Force."
Napolitano explained that the task force was charged with “identifying and assessing the impact that climate change could have on the missions and operations of the Department of Homeland Security.”
According to the former Arizona governor, the task force would address specific questions, including:
“How will FEMA work with state and local partners to plan for increased flooding or wildfire or hurricane activity that is more serious than we’ve seen before? What assistance can the Coast Guard bring to bear to assist remote villages in, for example, Alaska which already have been negatively affected by changes up in the Arctic?”
The findings from the Homeland Security Department (DHS) also asked: “(H)ow can we focus on how climate change is going to affect our rural citizenry including those who live along our boarders both northern and southern?”
..."
http://poorrichards-blog.blogspot.com/2010/12/napolitano-says-dhs-to-begin-battling.html
well, at least, we have that going for us..
AAIP
>> Bruce in Tennessee said...
ReplyDelete>> All this is nice, but all of you miss the main point. Until we have a balanced budget amendment, everyone left and right is at the mercies of the congress.
Very true.
My only concern with the balanced budget amendment is that it isn't effective. Consider: don't the states (e.g., California) have to "balance" their budget for every fiscal year? But, they're still basket cases! They issue more bonds each time and then they keep 2 sets of books supposedly (which I believe without having to see proof).
Bruce, what's missing from the foregoing paragraph? (I don't follow state finances. Maybe states do *not* have, in effect, "balanced budget" requirements already?)
>> have you peeked at The Federal Register, recently?
ReplyDelete>> "Regulations" do far more to impede competition--the lack, thereof, creates the massive Wealth inequalities..
Yes...agreed. The rules are written by the equivalent of bad copy-and-paste software developers who don't care about maintenance, usability, or total cost of ownership. And the inefficiencies in turn help large companies relative to small companies.
>> but you're a good guy,
ReplyDeleteI think the same of you, Andy.
And I, too, chalk up our different opinions to...
>> We've all had different life experiences which give us certain perspectives on business/politics/laws/etc....
That probably has a lot to do with it. And, if so, it means we're always in danger of generalizing too much from our own experiences.
...
Well, gotta head out to the salt mine.
Good trading, Andy and folks.
Most recent Rockefeller Institute State Revenue Report: http://www.rockinst.org/pdf/government_finance/state_revenue_report/2010-10-19-SRR_81.pdf
ReplyDeletewunsacon:
ReplyDeleteThe thing that the amendment does is it allows the courts to declare unconstitutional spending without income to back it. Courts have always been used to right wrongs, whether it is segregation, or poll taxes, or smoking lawsuits or whatever.
No, now it is just up to two branches of government...the judicial branch has essentially been unconcerned about excess spending...this amendment is the only solution. The legislative and executive branches will never come around as they are both elected....and for the most part the judicial is not.
imho, high marginal tax rates are an opportunity cost imposed for the privilege of a being a member of a society/economy that affords the chance to operate and be successful at such rarefied levels of wealth.
ReplyDeleteif you are above the poverty line in this country, and even for quite a few of thosse below that level, you are rich, compared to vast numbers of the world's population.
what most americans are not, and do not feel, is "secure" and that drives a great deal of the tax debate. are we more "secure" for the taxes we pay? e.g., for its budget, imho, dhs sure as hell does not make me, you, us, more secure and in many ways, less so.
AR -
ReplyDelete'twould be interesting to see that same pit/st chart from 1945 forward. would it show a post-ww II peak and a decline since 19??
iow, what's the really long-term trend?
morning all, i'm around but distracted with other things! will keep checking in..
ReplyDelete72bat
ReplyDeleteSo far all I can find are State Revenue Reports dating back to 2000.
The game last night was annoying, even for a disinterested party (I don't like New England or Green Bay)
ReplyDeleteI felt like the officials made three very poor calls against New England last night, two of them had large impacts on the game. These two were
1: Unnecessary roughness foul for helmet to helmet collision (which was incidental with the shoulder contacting first and the helmet collision was the side of the helmet--clearly not a leading with the helmet situation)
2. The illegal hands to the face penalty against New England, which took away the NE interception, should have been a double foul of offsetting penalties and a replay of the down instead of a 15 yard + automatic first down
This is going to be an amusing post-season. I wouldn't be surprised to see NE v. Atlanta in the super bowl. I think that a lot of people have discounted the NFC because of all of the lousy NFC teams, but there are several power-houses there and I think an NFC team will win it this year (Philly or Atlanta)
Double POMO looking like double fail. Take that BB.
ReplyDelete92.00 TLT110122C00092000 2.65 0.22 2.72 2.78 428 6,573
ReplyDelete93.00 TLT110122C00093000 2.02 0.19 2.09 2.13 356 3,661
94.00 TLT110122C00094000 1.60 0.18 1.57 1.60 334 4,141
95.00 TLT110122C00095000 1.13 0.03 1.14 1.18 666 3,779
96.00 TLT110122C00096000 0.82 0.07 0.81 0.85 494 4,537
97.00 TLT110122C00097000 0.56 0.02 0.57 0.59 230 1,818
TLT Calls Jan.'011
http://finance.yahoo.com/q/op?s=TLT&m=2011-01
Corn 600.50 +4.00 +0.67
Soybeans 1324.5 +14.0 +1.08
30yr Bond 121.90625 +0.53125 +0.44
10yr Note 120.250000 +1.031250 +0.86
NY Gold 1379.9 +0.7 +0.05
NY Silver 28.935 -0.198 -0.68
http://www.ino.com/
Be Extremely Careful…
ReplyDeleteBy Jamie Coleman || December 20, 2010 at 15:56 GMT
We’re getting reports of wickedly illiquid markets out there. Small orders that usually bounce off the market like flies off an elephant are moving things beyond belief… That’s great when it is moving in your direction but not so nice when it is against you.
Stay small and don’t get greedy…
after a long silence, the epicurean dealmaker has graced his blog with three excellent posts recently. good, quick reads for holiday downtime
ReplyDeleteAll Aboard! a short meditation on life metaphors
Holiday Interlude a verse selection with season's greetings
We Get Mail! in response to a reader's request, advice on what to read and why, written in his wonderful pungent prose.
love his verse quotations, each a favorite of mine, and his defense of the western canon, as i took my undergrad degree at a small college that offered a "great books" curriculum
72bat knows Annapolis, MD well...?
ReplyDeleteMatthew,
ReplyDeleteI think the NFC wins this year, fwiw. AFC is more "stacked" but if any of the top teams in the NFC get "hot" I think they win.
If Atlanta stays healthy they are going to be hard to beat, Matt Ryan doesn't really lose at home, his stats aren't the greatest but he doesn't turn it over.
on another note, how about that Rex Grossman, he didn't play half bad, though I didn't see the game, just the stats.
this is a truth:
ReplyDeletehttp://www.businessinsider.com/john-hussman-on-the-bailout-2010-12
@McF
ReplyDeleteI'm just getting in (and around to things) now...
You're IN for next week... I still have to wait for the Bears-Vikings game tonight (because Steve has the Bears D)...
They'd need to lay down a 30+ tho, so it's looking pretty good at the moment...
That would be like...
- a shutout
- 2 pick sixes
- and about 8 sacks/fumble recoveries
U never know tho... They DO have Devin Hester
game last night was so close, I was refreshing the matchup page every few minutes
ReplyDeleteL. Blount and J. Stewart were big for me this week, Stewart would have been even bigger if he hadn't fumbled again.
Thanks for the Hussman, Karen.
ReplyDeleteHave you sent Lefty anything for Christmas yet?
....Just wondering...you know how he whines...
I am sorry to subject you all to this:
ReplyDeletehttp://www.dailymail.co.uk/news/article-1340207/I-didnt-think-Iraqis-humans-says-U-S-soldier-raped-14-year-old-girl-killing-her-family.html
Chris Christie had some hard words in that 60 minutes video, doubtful the people that need to will listen though
ReplyDeletetruth was told when he said if you ignore it now in 10 years you won't have a pension
anonymous -
ReplyDeletei know of annapolis, md, but know mt. carroll, illinois far better
sorry for the off-topix, but then the market isn't exactly riveting me (or effing me over for that matter )this a.m.
here's another off-topic, found thru a link at epicurean dealmaker
NON-KINKY SEX IS A WASTE OF TIME an obvservation on bill o'reilly and on being male.
never know what's going to strike my fancy next.
thanks, k -
ReplyDeletethe hussman essay is dead-on how i've felt all along ("show me the money!")
i'm printing it off to hand to acquaintances who insist "we (sic) HAD to bail out the banks or the world economy would have frozen up and crumbled to dust and anarchy" (and i ask them, "and you know this, how?")
http://www.ritholtz.com/blog/2010/12/is-the-1987-pre-crash-highs-impacting-prices-today/
ReplyDeletei'm waiting for some comments to post.
http://www.housingwire.com/2010/12/20/households-likely-to-deleverage-debt-with-underwater-mortgage-defaults-report
ReplyDeleteBank of America Merrill Lynch analysts said the most likely way households will deleverage roughly $1 trillion in excess debt is through the default of more underwater mortgages.
Excellent Peter Boockvar:
ReplyDeletehttp://www.ritholtz.com/blog/2010/12/my-thought-on-the-yr-end-2011-price-target/
Fred Smith on Squawk Box:
ReplyDeletehttp://www.cnbc.com/id/15840232?video=1704253347&play=1
zerohedge
ReplyDelete$24.5 Trillion In US National Debt, $144 Trillion In Unfunded Liabilities In... 2015 http://is.gd/j5jHk
Fred now has to purchase two seats, I see....
ReplyDeleteKaren,
ReplyDeleteread the 87 link, didn't see your comments, but I did see one from a monkey on there which said that doing TA allows me to create my own reality.
In that case, I'm "all-in" short the ES and I've drawn some lines on my chart for it to go to 1, now if a few more of you draw the same lines we can create our own reality and cover at 1 and then have a big party.
So, Incubus asks the question:
http://www.youtube.com/watch?v=M90tA302X3k
ben, i didn't mean i made comments on that "1987" chart post.. i meant i was waiting for other to comment.. men are so from mars! as the so cal chick would say : )
ReplyDeletemy favorite planet is the Sun
ReplyDeletek -
ReplyDeletei knew it was the peanut gallery comments you were waitng for
You see, the Squid are not all bad. If we didn't make/arbitrage/suction so much money, the state and city would be much worse off.
ReplyDeletehttp://news.yahoo.com/s/nm/20101220/us_nm/us_newyork_budget?bouchon=501,ny
you made my morning with the incubus vid, ben..
ReplyDeleteTLT hit resistance at 94 today. The rally from 90 was the easy money, generally yields back up a bit between mid December and mid January.
ReplyDeleteAnyone seen 1 bp on 1-month bills? Hmm....
another two seater:
ReplyDeletehttp://finance.yahoo.com/tech-ticker/richard-suttmeier's-2011-outlook-pain-in-the-banks-as-housing-falls-another-15-30-535736.html
sorry, that was so rude.. bruce got me going : (
ReplyDeleteI wonder what Nailz has to say about that Suttmeier call
ReplyDeleteROR.
Karen,
ReplyDeleteOnline is where rude was meant to be..
Fred and Richard don't mind...
sometimes the talk on the unfunded liabilities discussion goes to far, imo, the known debt alone more than allows for a compelling argument that there is a problem.
ReplyDeletewhen I run a present financial plan for clients, I do not include on the net worth line future cars they may or may not buy, if that example makes sense.
funny how that NFLX was closing at 200+ at the end of last month
ReplyDeleteWoe to John E!
http://www.ft.com/cms/s/0/8a8542da-0b77-11e0-a313-00144feabdc0.html?ftcamp=rss#axzz18gB7bF3w
ReplyDeleteThe euro’s monetary guardian has “serious concerns” that flaws in the Irish bail-out legislation would usurp the ECB’s rights over the collateral proffered as security for liquidity, according to a position paper posted on the ECB’s website.
...Does this mean they don't think they have enough power granted to them as the ECB to overcome Irish sovereignty?
are we having fun at 1250?
ReplyDeleteSell bonds, buy stocks!
ReplyDeleteStocks have reached a permanently high plateau..
ReplyDeleteben.. and spy is farther away from 125 than it was last week with spx at 1246.
ReplyDeleteKaren,
ReplyDeleteI think something is screwy with SPY though because of the dividend....
I'm pretty bearish, I may open a small short position here, it would seem a lot of arm chair tech types see "no evidence" to be short, which raises confidence, as does retails newfound bullish stance on the world.
ben, but ex div was on 12/17.. maybe you are right but should be priced normally now..
ReplyDeletehttp://finance.fortune.cnn.com/2010/12/20/lehman-suit-shreds-auditors-teflon-coating/
ReplyDeleteI opened a small short on SPY when cash was just at 1249 and some change, stops are in place.
ReplyDeletesmall reversal in AIG.. rolling my eyes.
ReplyDeleteif hyg can get back to 89.65, it will have made a one month cup and handle..
ReplyDeleteof course, i'm still thinking hyg will get me a new pair of french panties.
ReplyDeleteOOPS on my 2:41.. on a ten min chart.. it will make a one day cup and handle. sorry! (hyg, that is.)
ReplyDeletehttp://pragcap.com/what-does-the-yield-curve-tell-us-about-future-economic-conditions
ReplyDeleteKaren,
ReplyDeleteyour comment at 2:41 will unleash the LeftKraken....
b'n't -
ReplyDelete"dog-sledding!"
how cool is that?
this is really unpleasant:
ReplyDeletehttp://www.businessinsider.com/the-top-19-words-of-2010-2010-12#
i'm afraid to get to number 1.. i'm ill enuf already
Well something's broken when DXY is up, yields are up, gold is up, silver is up, euro is down and the SPX is up.
ReplyDeletealso would like to point out that large speculators really lightened up short positions in treasuries last week while small speculators hardly moved, the same week it was announced PIMCO would change the asset selection in PTTAX, hmmmm.
ReplyDeleteI maintain a question for those claiming that "mom and pop" have been buying treasuries, I don't think this is all true or at the very least, there is no data at all that confirms it. I think small investors have been clamoring for yield just like everyone else. Some may claim this as anecdotal but having started my career near the end of the tech bubble and being right in the heart of the RE bubble I got a taste of just how widespread the interest was during those periods, if so many mom and pops were buying govvies I would have come across some of them, I live right near one of the most populated cities in the country, but I have not met one single person now in two years that told me they were buying govvies, I just counted up that I had 47 referral meetings with new people over that time, so I went 0/47, I also can't recall a single wholesaler in the MF space over that period that came to suggest the purchase of govvies and I cannot think of one rep I've spoken with at my company doing it either.
Now, please consider this information for those interested in what else might be going on in fixed income:
http://www.businessinsider.com/candy-from-strangers-who-exactly-is-buying-all-that-treasury-paper-2010-8
I'm also very interested in what is developing in the MA chart and to a lesser extent V and AXP.
ReplyDeleteKaren,
ReplyDeletebtw, you DID comment on the 87 thread, lol, the trend lines on the chart go all the way back to the GD, Prechter uses the same trendlines and has others as well for his GS Count charts, anyone that's spent 15 minutes could have seen this.
BreakingNews Breaking News
ReplyDeleteFlooding forcing evacuation of 2,000 residents of farm community in Kern County in south-central California - AP
i can believe that! had to run my sump pump at 3:30 AM as water backed into garage... it is supposed to be automatic broken! as is one of my pumps.. thank goodness for the moonglow.. when i opened my eyes and saw the olive trees in my back yard surrounded by water i knew i had better get up! i've gotten a good 6 inches of rain in last day or two.
Another bond bull:
ReplyDeletehttp://pragcap.com/gundlach-the-usa-cant-handle-rising-interest-rates
Mom and Pop were not buying govvies. The banks were.
ReplyDeleteGuess what? They will again....
don't forget to walk outside tonight and look up:
ReplyDeletehttp://www.wired.com/wiredscience/2010/12/solstice-lunar-eclipse/
A total lunar eclipse will be visible across North America tonight, just in time for the longest night of the year. This will be the first time a lunar eclipse has fallen on the winter solstice since 1638.
The Earth’s shadow appears nearly black against the moon until totality, when sunlight filtering through Earth’s atmosphere casts a ruddy glow. An observer standing on the moon and looking back toward Earth would see a ring of red light circling the Earth, marking all the sunrises and sunsets all over the planet.
@fixed income analyst:
ReplyDeleteI agree, "other investors" in the flow of funds is far too broad to simply assume that it was mom and pop that did all the buying or even a majority of it, they could never get their hands on that many notes in time.
Speaking of cash, RP pointed out this article in the last EWT, I wanted to share it with my squad here, fwiw, people mostly laugh at me for having that worthless dollar stash:
http://blogs.wsj.com/economics/2010/12/08/demand-for-us-cash-surges/
"consensus for sustainable recovery"
ReplyDeleteBloombergTV Bloomberg TV
On #BloombergTV, James Paulsen of Wells Capital Management Says 10-Year Yield May Reach 4% By Year End http://ow.ly/3s7oJ
also, it is now beyond tiresome how many people state that Bernanke is operating a printing press, this is typically used in some sort of rationalizing about trend extrapolation
ReplyDeletethis is not zimbabwe folks, do your homework, our fed never operated a press,. they certainly don't operate one now.
This is a bit tough going but explains why we own TIP now not TLT:
ReplyDeletehttp://macroblog.typepad.com/macroblog/2010/12/whats-behind-recent-treasury-yields.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+typepad%2FRUQt+%28macroblog%29
A fair bit of commodity price inflation is built in and already in the pipeline and expectations will rise for a few months here until the imminent commodity slowdown (initiated by China tightening) takes effect - some time in the spring.
this is very interesting: High-Frequency Traders Elbow Aside Day Traders
ReplyDeletehttp://www.tradersmagazine.com/news/day-trading-momentum-106861-1.html
when i opened my eyes and saw the olive trees in my back yard surrounded by water i knew i had better get up! i've gotten a good 6 inches of rain in last day or two.
ReplyDeleteThat's a lot of rain...
I do SO have a printing press AND a helicopter.
ReplyDeleteWash out your mouth...
"when i opened my eyes and saw the olive trees in my back yard surrounded by water i knew i had better get up! i've gotten a good 6 inches of rain in last day or two"
ReplyDeletesounds like you might need a bailout Karen
our fed never operated a press
ReplyDeleteA mint observation, if I may say so.
We have helicopters.
ReplyDeleteBlack ones, and a candy-striped one.
For Lloyd. Secret, pain of death.
Mon Dec 20 15:00:00 EST 2010 | Briefing.com
ReplyDeleteTreasuries are near their worst levels of the session following today's second round of Fed buying through its Permanent Open Market Operations. Following both of today's POMOs, Treasuries found sellers exiting the market. After the Fed's first POMO of the day, the 10-yr yield rose off its session low of 3.247%, and found itself hovering near 3.33% before the day's second POMO. The 10-yr yield then climbed to 3.36% following the day's second round of Fed buying. As yields across the curve rose, the 2-10-yr spread steepened to its high of the day near 276. After spending most of the session slightly steeper, the 10-30-yr spread is now unchanged for the day at 110.8.
"when i opened my eyes and saw the olive trees in my back yard surrounded by water i knew i had better get up! i've gotten a good 6 inches of rain in last day or two"
ReplyDeleteBut the olive harvest will be outstanding.
"when i opened my eyes and saw the olive trees in my back yard surrounded by water i knew i had better get up! i've gotten a good 6 inches of rain in last day or two"
ReplyDeleteDL is laughing somewhere
Olives.....Olive Oil......pfffft.
10s30s and 2s10s still near their all time wides. The 30y will probably be the beneficiary of normalization of these spreads.
ReplyDeleteJan will likely see a bit more selling of Ts, the first 2 weeks or so isn't usually good for Treasuries, as mangers put on risk.
I'm hoping all that rain won't be SNOW by the time it hits the East Coast...
ReplyDeleteBetter get the snow blower warmed up...
"when i opened my eyes and saw the olive trees in my back yard surrounded by water i knew i had better get up! i've gotten a good 6 inches of rain in last day or two"
ReplyDeleteOur manners have been impeccable today in spite of being offered the above bait. The lady must be shocked at our restraint.
A good thing LB isn't around.
ReplyDeleteThat should have been managers. Not mangers or Mangler/s.
ReplyDeleteMangler will be a big talking point in 2011.
"Speaking of cash, RP pointed out this article in the last EWT, I wanted to share it with my squad here, fwiw, people mostly laugh at me for having that worthless dollar stash:"
ReplyDeleteIf a good number of these "dollars" end up in the hands of foreigners (and overseas)...
What makes you think they're really holding these things in safes and vaults?
Why wouldn't many of them quietly be trading them in for gold, silver, and other commodities?
Retail Sales Are Back, but the Jobs Aren't
ReplyDeletehttp://yhoo.it/fXMqTS
would someone please answer the question for me: HOW are retail sales back?
WE like your dollars in Zimbabwe.
ReplyDeleteYou am now our currency. We cannot be getting enough.
Until reintroduction of the Mugabe, Bucky is legally tender.
@ K
ReplyDeleteSPX-SPY
http://www.businessinsider.com/this-retail-recovery-isnt-real-and-is-only-built-on-credit-2010-12
ReplyDeleteOnce Santa pisses off back to Greenland it's midnight for retail and Cinderella is fired...
http://geraldcelentechannel.blogspot.com/2010/12/confessions-of-economic-hit-man.html
ReplyDeletewe're almost there
ReplyDelete.
anon at 3:42, that is precisely why i find the spy current relative weakness to the spx notable.
ReplyDelete@karen
ReplyDeleteLet me know when "Confessions of an economic girlie man" comes out...
CV,
ReplyDeletemy thoughts on that are:
1. Several years ago anyone that forecast this mess would have recognized that debts all over the world are denominated in dollars, in a deflationary spiral it is dollars that the creditors want back, not gold or silver. So while that point might be valid at some degree of scale, one could just as easily argue that people sold gold to get dollars. The bottom line is the demand is increasing.
2. Most "notes" were already outside the United States before all this started so this is not a new trend that foreigners want dollars, they just want MORE dollars now. If they really wanted them to buy gold I suppose you could have made that same argument at many points in time since 1913 or especially over the last 10 years given dollar weakness and a massive rise in the metals. All this aside, put very simply, I'm highly skeptical of a majority of the GIB having the ability to see the opportunity to arbitrage the dollar in such a way, we'd see constant changes between demand for euro and dollar if that's what was going on in a large way.
Gotta go peeps...
ReplyDeleteCV is kind of quiet today...
Probably a low volume lifeless week we have brewing... (I just say that to bait someone into shaking things up a little bit)...
Lunar Eclipses bitchez!
CV taking the BEARS (who else) tonight for (1 unit)...
Beware of Greeks bearing gold. They want your dollars.
ReplyDelete@McF
ReplyDeleteThanks for the reply...
When I get back, I'll write out some of my comments about that...
Rampage Jacksons bitchez! :-)
CV,
ReplyDeleteI have a lot of clients from India. You know that culture and their history with gold. They understand the importance of gold (my clients) more than the average american imo, but, all they are doing is arbing the dollar to move money in and out of savings accounts denominated in rupee.
One could just as easily argue demand for dollars is rising specifically in some places to avoid what people may perceive to be excessive taxation.
WTF is all this talk I see on-line today about
ReplyDelete"once bonuses get paid we are going to 1,300"
that is hilarious, where do people come up with this stuff?
A storm pounding California with record rain forced authorities in the San Joaquin Valley to call Monday for the evacuation of some 2,000 residents of the farming community of McFarland due to major flooding.
ReplyDeleteAn estimated 400 to 500 homes were in danger, Kern County Fire Department spokesman Sean Collins said.
A sheriff's helicopter crew was trying to locate the source of the flooding, which possibly was coming from ditches and canals that supply water to farms, Collins said. Two evacuation centers were set up.
Stormy weather has gripped California since late last week, triggering mostly minor flooding, mudslide, road closures and power outages, but forecasters had warned of significant flooding dangers.
The storm was expected to intensify Tuesday night and Wednesday, with between five and 10 more inches of rain.
Real Time93.19 -0.05 (-0.05%) 4:01PM EST
ReplyDeleteDay's Range: 92.64 - 94.23
Prev Close: 93.24
Open: 93.75
Bid: 93.23 x 1000
Ask: 93.24 x 3000
LB,
nice calls on TLT, you were all over that, and, correctly, at that~
AAIP
A sheriff's helicopter crew was trying to locate THE SOURCE of the flooding
ReplyDelete[only in California...]
(takes a bow..)
ReplyDeleteThank you.
McFearless said...
ReplyDeleteWTF is all this talk I see on-line today about
"once bonuses get paid we are going to 1,300"
that is hilarious, where do people come up with this stuff?
time to short?
Saved by Zero? or..
ReplyDeleteZero Policy Touches Some on Wall St.
http://finance.yahoo.com/news/This-Bonus-Season-on-Wall-St-nytimes-3737575928.html?x=0
Cvienne (3:24) - What is this talk of a snow blower?
ReplyDeleteSend it my way and we'll see if it puts a smile on my face.
Frosty (aka, Mutt)
speaking of Calif., no mention of the Snow in the Sierras?
ReplyDelete"Lake Tahoe, CA & NV (Dec. 9, 2010) - Lake Tahoe is the place to be for the upcoming holidays thanks to record-setting November snowstorms that dropped more than ten feet of snow, transforming the region into a winter wonderland in a little less than a week. Starting the season with a healthy snowpack is a boon for travelers who will partake in the annual holiday festivals, legendary New Year's Eve parties and countless entertainment options in the Lake Tahoe area.
Already boasting top-to-bottom skiing and some of the deepest base depths in the country, the incredible mid-winter snow conditions will allow for full operations at all seven resorts in time for the upcoming holidays. Skiers and snowboarders heading to Lake Tahoe will have more choices in ski resorts, terrain and experiences - including over 124 lifts, 600 trails and over 15,000 acres of legendary terrain - than any other winter destination in the country...."
http://www.californiasnow.com/press_release.asp?id=564
http://cdec.water.ca.gov/snow/current/snow/
http://www.sacbee.com/2010/05/10/2741574/sierra-snow-predicted-for-today.html
AAIP