If it's BTE (what am I thinking? we all know it will be) then Friday will be painful for bears. But CPI, retail sales, industrial production, and consumer sentiment could bring a smile back for the bears. Unfortunately they also could send up a bat signal to the JBTFD crowd.
JPMDaily 3LB
trend=up
high= 44.71
rev= 43.58; mid= 44.15
JPMWeekly 3LB
trend=up
high= 43.64
rev= 41.43; mid= 42.54
JPMMonthly 3LB
trend=no
direction=down (2 bars)
low= 36.36
rev= 44.75; mid= 40.56
Singing "Here We Go Again" as JPM reports earnings...
So, we're on the knife's edge of a major break out higher in JPM? I guess that would be the 3LB suggestion here.
ReplyDelete~~~~~~~~~~
Anecdotal sidenote: We're seeing more and more banks moving certain trading personnel (energy) out of New York and down to Houston.
I expect more of that to continue as banks realize there's much lower cost way to operate trading groups (i.e. leaving NY and London).
Andy T
ReplyDeletePossibly. Now they'll have to get confirmation. But the month has many days left.
http://money.cnn.com/2010/12/31/pf/investing/jack_bogle.moneymag/index.htm
ReplyDeleteJack Bogle: 'This is the most difficult time to invest'
"Well, just look at the dividend yields stocks are offering. We almost don't talk about yields in equities anymore, but yields are a pretty firm anchor for returns. I remember in 1974 writing an annual report saying you really can't go wrong when stocks are yielding 6.5%. Unbelievable!
It's a bad period for this philosophy. In 2008 we had one of the largest cuts in dividends in the history of the S&P 500. Now the dividends don't seem to be coming back, even though the earnings have.
What are the corporations trying to tell us? I don't know. Maybe they're trying to tell you that these earnings are phony, and we don't have money to pay you dividends."
BTE- JBTFD, can't even bother to write a sentence...
ReplyDeleteGotta get some of this-
ReplyDeletehttp://noir.bloomberg.com/apps/news?pid=20601087&sid=aRuaFtfPvuaM&pos=7
Bruce
ReplyDelete"These earnings are phony" is about as close to the truth as you can get.
Good morning all! Interesting discussion of "mental capital" in the wee hours last night. My mental capital was all but drained before I rediscovered you guys hiding out over here. I wrote to CV last night that I had (mistakenly) assumed that the group would fall apart when Andy's original blog fell apart, and I failed to check back to discover that you all migrated successfully over here. Fortuitously, I happened upon you all the Sunday before the first test of the 61.8% retrace, which I'd been waiting for for so long that I'd forgotten all about it. (There was a lot of portfolio reallocation the next morning.) Those charts that night completely recharged my mental capital -- thanks, Andy -- and I've been annoying you all with my drivel ever since. In any event, both mental and monetary capital are equally important, so thanks to everyone for helping me preserve both.
ReplyDeleteWunsacon -- are you in IL? Quinn was only just sworn in last week. I don't see him being recalled any time soon, income tax hike or not. It will be interesting to see how much blood they can get from the stones. Loved that quote yesterday from Wisconsin, about how living next door to IL was like living next to the Simpsons (dysfunctional family.)
ReplyDeleteAny thoughts on puts on Molycorp prior to next week's lockup expiration?
ReplyDelete@Jennifer:
ReplyDeleteOne of the few good things Gartman has ever uttered was the idea about mental capital vs. trading capital. Loss of trading capital is easy to handle--that happens all the time. Losing one's mental capital is altogether different....
The weak longs in gold (paper) are having conniption fits right about now.
ReplyDeleteJennifer
ReplyDeleteA short opex week. I shudder to think of what may be in store for bears.
CPI +0.5%, ex-auto +0.1%, gasoline +8.5%. The Bernank now has a green light for QE3. Damn.
ReplyDeleteGlobal food chain stretched to the limit
ReplyDeletehttp://www.msnbc.msn.com/id/41062817/ns/business-consumer_news
"Strained by rising demand and battered by bad weather, the global food supply chain is stretched to the limit, sending prices soaring and sparking concerns about a repeat of food riots last seen three years ago.
Signs of the strain can be found from Australia to Argentina, Canada to Russia.
On Thursday, Tunisia's president ordered prices on food staples slashed and indicated he won't run for re-election after deadly riots hit the North African country.
More must-see stories AFP - Getty Images The stars in Motown
Slideshow: Fuel-efficient electric cars, upscale sedans and trucks make their debuts at the 2011 North American International Auto show.
Slideshow: A decade of Car of the Year winners
Life Inc.: I'll get to it, when the economy picks up
Your Career: Getting lewd in the workplace
.."We are entering a danger territory," Abdolreza Abbassian, chief economist at the U.N.'s Food and Agriculture Organization (FAO), said last week.
The U.N.'s fear is that the latest run-up in food prices could spark a repeat of the deadly food riots that broke out in 2008 in Haiti, Kenya and Somalia. That price spike was relatively short-lived. But Abbassian said the latest surge in food stuffs may be more sustained.
"Situations have changed. The supply/demand structures have changed,” Abbassian told the Australian Broadcasting Corp. last week. "Certainly the kind of weather developments we have seen makes us worry a little bit more that it may last much, much longer. Are we prepared for it? Really this is the question."
Price for grains and other farm products began rising last fall after poor harvests in Canada, Russia and Ukraine tightened global supplies. More recently, hot, dry weather in South America has cut production in Argentina, a major soybean exporter. This month's flooding in Australia wiped out much of that countries wheat crop.
As supplies tighten, prices surge. Earlier this month, the FAO said its food price index jumped 32 percent in the second half of 2010, soaring past the previous record set in 2008.
Prices rose again this week after the U.S. Department of Agriculture cut back its already-tight estimate of grain inventories. Estimated reserves of corn were cut to about half the level in storage at the start of the 2010 harvest; soybean reserves are at the lowest levels in three decades, the USDA estimates, in part because of heavy buying by China. The ratio of stocks to demand is expected to fall later this year to "levels unseen since the mid-1970s," the agency said."
Industrial Production BTE at 0.8% with capacity utilization at 76.0. Anything to push the market higher especially since CPI & Retail Sales were WTE.
ReplyDelete@Amen
ReplyDeleteLiked the Isley Brothers.
Plan B, for JPM could have been -
"Bankster's Paradise" - (Coolio)
http://www.youtube.com/watch?v=9oU_F0yS-Bo&feature=related
good monring! <3ing Jack Bogle.. but some are still paying.. REITS for instance.. of course, they borrow to pay...
ReplyDeletepoor cstr! i need to do my research on that.. a falling knife or ..
Morning all. Treasuries have shrugged off the CPI.
ReplyDeleteGood monring to you, Mistress...!
Retail Snails were weak when you factor in the price of gasoline.....
ReplyDeleteConsumer sentiment is not going to like $gaso.
CV
ReplyDeleteThat gets played at the BoD meeting.
is this the turn in bonds?! getting close to a confirmation..
ReplyDeleteWe are more or less convinced that we should now be in JBTFD mode in Treasuries, LQD and AGG. The same for MBB and related equities.
ReplyDeletehttp://www.ritholtz.com/blog/2011/01/stephen-roach-propping-up-the-economy/
ReplyDeleteif you can stand EB.. Roach, Fed going back to same policies as before the crisis.. what has the fed learned over last 10-12 yrs? not a whole lot..
LOL.. they are debating the next bubble as if they can't see it right now!!
ReplyDeleteAre small caps rich?
ReplyDeletehttp://www.bloomberg.com/apps/quote?ticker=IWM:US
IWM well above effing pre-Lehman levels. Back to the roaring economy levels of 2008.... C'MON MAN !!
Roach thinks bubble possibly in EM, LOL.. I am dying! not commodities?? not the US stock market??
ReplyDeleteG Shilling was on talking about a commodity bubble.
ReplyDeleteRight here right now...
ONE TRADE = ONE BUBBLE....
ReplyDeleteIWM, EEM, take your pick...
Sentiment 9.55, inventories 10am.
ReplyDeleteInventories are a potential trouble spot.
Santa doesn't want to transport a lot of stuff to the Pole....
One bubble to rule them all.. @9:47 you are so so so right !! laughing.
ReplyDeleteI really can't deal with the JBTFD any longer.. look at this all go green!
The north pole has been temporarily moved to the mountains of East Tennessee..Santa is partial to Evan Williams...
ReplyDeleteHedge on here. Let's see what Mr Market does after 10am.
ReplyDeleteThere has to be a sell off one day before we die.
Connie Consumer down to 72, she doesn't like $gaso at $3.50 retail. Maybe she will start leaving the inventory on the shelf at Plastic Ducks R Us.
ReplyDeleteBruce, I had to share your blog with a girl friend yesterday.. the fotos are just extraordinary.. she wants to move to TN, now : )
ReplyDeleteWe better take this in: wait for Paul Hickey..
http://www.bespokeinvest.com/thinkbig/2011/1/14/bespoke-cnbc-appearance-113.html
And, i guess confused my news girls..
oh my word, look at JJC today!
http://www.bloomberg.com/news/2011-01-14/treasuries-pare-losses-after-u-s-retail-sales-rise-less-than-forecast.html
ReplyDeleteTreasuries Advance After Retail Sales in U.S. Increase Less Than Forecast
Well, Karen, I'm getting a little tired of the snow at this point. UPS won't deliver to the Ponderosa for the last 7 days...maybe Monday.
ReplyDeleteI think Treasuries are stronger on technical factors ($ exiting from munis must go somewhere) and more and more people are beginning to question the longevity and sustainability of the recoveryless recovery in a low demand economy.
ReplyDeletemight open a chinese bank account..
ReplyDeletehttp://online.wsj.com/article/SB10001424052748704307404576080222812076888.html?mod=rss_about_china
oh, geeze.. if the dollar doesn't bounce after breaking 79.. what will happen?
ReplyDeleteChinese bank accounts....
ReplyDelete$4000 a day limit on changing to Yuan, and 20k annual limit. Mish shredded this.
Do we really think EURUSD can charge past 1.34?
ReplyDeleteI think we are in the hands of FX traders here.
C'mon BUCKY, get up off the mat.
"oh, geeze.. if the dollar doesn't bounce after breaking 79.. what will happen?"
ReplyDeleteIt's a long way down...
A long but very interesting post about fraud and China:
ReplyDeletehttp://www.bloomberg.com/news/2011-01-13/texas-short-seller-fights-china-fraud-in-20-billion-u-s-shares.html
1.34 EURUSD holding for now.
ReplyDeleteThink the EURUSD is a major short squeeze, but also think it has room to run, not betting either way...
ReplyDeleteFWIW- according to forexlive, most jumps in EURUSD are being sold by big money banks and hedge funds.
For those who are interested, we are considering a ride on:
ReplyDeleteEDZ = 3 x Emerging Markets bear
CZI = 3 x China bear.
This is a day trip, we will not gold these.
Either we get it right, or not.
Another new low in MUB. IQI down 2.2%.
ReplyDeleteThanks, Governor Christie, for being honest.
This is becoming a rout.
At what stage do losses in these become significant enough to cause liquidation elsewhere? If it is institutional money will surely only flow to corporates and Treasuries and not into equities here (except maybe defensive stocks). If they have any sense, that is...
IQI is the junk end of the muni market. Dividend is 8.2%
ReplyDeleteMUB is more like the LQD equivalent. Dividend is 3.88%
There might be some opportunities here, but let's see some more blood in the water, eh?
"You're going to need a bigger boat.."
ReplyDeletePity the poor foot soldiers of St Jamie's army:
ReplyDeletehttp://www.bloomberg.com/news/2011-01-14/jpmorgan-investment-bank-cuts-average-pay-to-369-351-as-10-revenue-falls.html
That's going to make it tough to fund all those private schools, nannies, mistresses and houses in the Hamptons. Not to mention hookers and coke. Tough times....
WTH happened between 10:10-10:35 to move the market?
ReplyDeleteMy bad. 10:30-10:35
ReplyDeleteAFIATBNL -- nice bear wedge shaping up on LQD too -- next place for spillover?
ReplyDeleteAlso -- are my homestates the best or what? Grew up in NJ, now I live in IL. I know how to pick 'em :-)
More riots. BB is really causing problems world-wide.
ReplyDeletehttp://www.zerohedge.com/article/latest-inflation-riot-tally-algeria-tunisia-morocco-yemen-and-jordan
Jennifer - corporate credit is one place where I DON'T see problems. Both credit risk and higher rate risk are at low levels, and Ts and LQD should benefit from muni problems. I have cut a little exposure to HYG/JNK.
where is the effect of this on our market?
ReplyDeleteWSJ China News
China Raises Banks' Reserve Requirements http://on.wsj.com/gRRQtp
Another EM bear and US bull. I see the logic for this, although much of the US equity market has a commodity/EM exposure.
ReplyDeletehttp://www.bloomberg.com/news/2011-01-14/china-loose-policy-to-shape-global-capital-flows-fortress-s-levinson-says.html
We think miners, industrials like CAT, drillers, are all in trouble. Pure domestic income plays are likely to do well. Utilities, REITs, telecoms etc..
where is the effect of this on our market?
ReplyDeleteIt is reflected in gold and silver. Those are the smart markets when it comes to China. Copper isn't listening. China may have to keep hiking until they get some traction in commodity prices.
Who needs to hike?
ReplyDeleteYou do.
ReplyDeleteWho?
ReplyDeleteExactly.
ReplyDeletehttp://www.bespokeinvest.com/thinkbig/2011/1/13/csco-vs-aapl-1000-djia-points.html
ReplyDeletejust to reiterate.. and what a dopey index that is.. makes dow theory seem clueless and hokey..
from ZH: PIMCO increases MBS holdings again. Looks like QE3 will be muni/MBS
ReplyDeleteHut, hut, hike !
ReplyDeleteI want to be paid in Euros.
ReplyDeleteK.,
ReplyDeleteMBS will be fine as long as rates stay low, which they will.
I said a long time ago that QE3 would be for munis. BB will wait until they have been slaughtered and are extremely cheap. Buyer of last resort.
Re: corporate credit -- completely agree with that fundamental analysis, but the chart looks really BAD to me...sort of that upside down cup with handle look...
ReplyDeletehttp://screencast.com/t/PGBIijbwF
see, I even broke out Jing for this
you know what? LQD turned its trend chart up this week..
ReplyDeletei am at a loss on everything.. only thing i've gotten right but have no money on is that gold would get whacked.. so where is the one trade, when i need it?
but the chart looks really BAD to me...sort of that upside down cup with handle look...
ReplyDeleteThe bond charts all look that way b/c we went through the huge rate hike as the hedge funds unwound leveraged bets in bonds after the QE2 announcement. Sort of a once in a decade spike, highly unusual.
(Until QE3... LOL)
NLY is acting strangely..
ReplyDeleteWe are net short equities now.
ReplyDelete14% long, 18% short.
Thanks, that helps.
ReplyDeleteNo volume in NLY. Large institutional holdings.
ReplyDeleteIt has been pretty weak, since the div and the rate spike.
We are pretty sure that MBS have bottomed, expect NLY to be OK.
Those stocks will do fairly well if equities sell and bonds gain.
1287, 50% 1296-1278, passed thru it a few times today, building a base here, or just resistance?
ReplyDelete18
EUR-USD 1.3340 -0.0024 -0.18%
ReplyDeleteThe Euro charge seems to be over, EUR bulls are in full retreat. Looking at AUDJPY and EURJPY there isn't much fuel there in terms of carry.
JOHN E might just be on his own here, doodling around at the top ?
I'm not dead yet!
ReplyDelete30yr Bond 121.68750 +0.21875 +0.18
ReplyDelete10yr Note 121.468750 +0.359375 +0.30
Bonds looking Good..
http://quotes.ino.com/chart/?s=NYBOT_DX
yon Paperback caught a bid @ 78+ ?
AAIP
Nic sighting...
ReplyDeletehttp://www.forexlive.com/159639/all/bearish-consultants-report-in-eur-rumored
CNBC Tarullo: Basel to Designate Global Systemically Important Financial Institutions By Mid-year-Designation Could Require Higher Capital Levels
ReplyDelete42.49 -14.46 (-25.39%)
ReplyDeleteCSTR
http://quotes.ino.com/chart/?s=NASDAQ_CSTR
nice Haircut..
CSTR: One knife we will not be picking up, even after a 25% tumble. How on earth have these stocks arrived at these price levels?
ReplyDeleteNo dividend, P/E of 17. WTF?
Oh yeah, it's a "growth" story.....
Put your stocks in here and they'll never fall down!
ReplyDeletehttp://breakingnews-www.appspot.com/filter/tunisia-protests
ReplyDeletehey, that is some bowl! maybe in that sense i can comprehend the spx.. BB is a master engineer.
ReplyDeleteHungry, need to search for nutrition. Please don't let those lunchbots ramp the market and take out my stops. A few peep are beginning to set up short here with their backs to SPX 1300.
ReplyDeleteWonder if any more Asian countries will follow Korea and China by making moves towards tightening while people are starving and rioting?
ReplyDeleteIf you had a sense of humor you might do it Sunday night, and then sit back and watch European markets on Monday morning while our markets are closed. Thinking about that scenario, would you want to be a naked long here without protection?
SPX
ReplyDelete3, 5, 8, 13, 21, 34, 55, 89 weekly MA all in an uptrend, 144 weekly MA about to turn up also, maybe next week...
just saying...
Tunisia declares a state of emergency.
ReplyDeleteThanks, Ben. You certainly stimulated some "risk taking".
"..naked long here without protection?.."
ReplyDeleteusually, a Bad Idea, no matter the Context..
AAIP
Karen
ReplyDeleteI was wondering when they were going to push through that high at 1286.87 and make a run for 1290. BTW 1290.77 is the 1.146% of the monthly close.
http://finviz.com/screener.ashx?v=320&s=ta_mostactive&t=MRK
ReplyDeletethe downside of Pharma..drug test Suspended..
AAIP
My my my. BKX +2%, KRX +2.9%, XLF +1.5%
ReplyDeleteReally?
AR, i cannot even comment anymore.. just shaking my head. (but keeping it while those around me lose theirs : )
ReplyDeleteJPM - "The company also said the level of nonperforming loans and repossessed homes through foreclosure rose 27% for the fourth quarter to $13.3 billion."
ReplyDeleteKaren
ReplyDeleteThe level of NPLs rose and yet they reduce loan loss provisions. Yeah ok.
Day's Range: 13.01 - 14.30
ReplyDelete52wk Range: 1.15 - 17.92
1:06PM EST: 13.15 -1.27 (8.81%)
http://finance.yahoo.com/q?s=REE&ql=1
rareearths.lottteryticket.com(bomb)
not doing so well..
AAIP
the dip is now the 5ema on a 10 min chart.. gotta be quick to get in..
ReplyDeleteAmerican International Group Inc. repaid the last $21 billion it owed on a Federal Reserve credit line and swapped the Treasury Department’s preferred stake for common stock as the U.S. unwinds its investment in the company.
ReplyDeleteTreasury now owns 1.66 billion shares of New York-based AIG, or about 92 percent of the company, and will sell the securities to repay an investment of about $49 billion through the end of last year, the regulator said in a statement today. Treasury’s investment climbed to $68 billion as it helped AIG meet obligations to the Fed.
http://www.bloomberg.com/news/2011-01-14/aig-repays-fed-swaps-treasury-investment-for-common-stock.html
@ AR
ReplyDeletethere's your 1290!... oops
my streaming quotes are at a near standstill.. HF must be running in slo mo today.
ReplyDeletethe $tran looks set for a 100 pt drop (the 34 ema) .. but surely the 13 will hold as it has for the last 2 months..
ReplyDeletelook at the switch in tbt and tlt today.. i am getting more and more confused.
ReplyDeleteRuh roh. The 1300 squeeze has begun. Damn you ben22 :-)
ReplyDeleteif you buy now, you can still catch the next 50 pts in aapl.. next 25 in GS..
ReplyDeleteTwo weeks into the new year and SPX up 2.7%. Rest of the month to follow the same path?
ReplyDelete"my streaming quotes are at a near standstill.. HF must be running in slo mo today."
ReplyDeleteThey are no longer high frequency; they are low frequency. It's like switching from soprano to bass.
Say it with me in a loooooow slllooooooowwww vooiiiiccccce:
Guuuuuuuuuuunnnnnnnnn theeeeeeeeeee Sssssppppppoooooooooosssss.
VXX made a new 52 week low today..
ReplyDeleteMatthew
ReplyDeleteIt does seem like they are trying to blow out all stops before the long weekend.
i've seen this movie before. who reports next tuesday? i'll check.
ReplyDeleteGold now below 1368.14 (23.6% retrace). Support currently at 1357.77 (the 89SMA). Break below that and support becomes 1328.22 (38.2% retrace) & 1304.59 (the 144SMA).
ReplyDeleteCiti reports next I think.
ReplyDeletec before the bell, aapl and ibm after..
ReplyDelete"who reports next tuesday?"
ReplyDeleteI intend to report next Tuesday that I am hopelessly in love with myself. You are all forbidden to trade on this news, since you have seen an advance report.
update: Citigroup before the open and Apple after the close on Tuesday.
ReplyDeleteKaren
ReplyDeleteLMAO.
what a beautiful picture the S&P is making, look closely, two more weeks....maybe three.
ReplyDeletealso, the NAZ gave a near perfect pause at a fibo retrace yesterday, didn't see anyone here mention it.
b22
The JP Morgue earnings have certainly lit a fire under the banks. If only it were a real conflagration...
ReplyDeleteSince most of North Africa and Bangladesh is now sadly burning, is it only a matter of time before worldwide food riots puncture the bubble ?
I would not rule out more co-ordinated moves by central banks in the emerging markets to try to stem the flow over the weekend or on Monday. Things are getting a little bit out of control. Imagine if this were summer, and food prices were spiraling upwards.
Anyone feel like adding to Treasury positions? We do.
ben22
ReplyDeleteI haven't been watching the NAZ that closely. Usually I have the Q's up on my screen.
TRIN & PC ratio are saying the squeeze isn't over. Damn them!
ReplyDelete5-Year Treasury 1.925 +0.019 +1.00%
ReplyDelete10-Year Treasury 3.315 +0.014 +0.42%
30-Year Treasury 4.511 +0.018 +0.40%
Crude Oil 91.52 +0.12 +0.13%
Natural Gas 4.4720 +0.0650 +1.47%
Gold 1360.40 -26.60 -1.92%
Dow 11730.00 +47.00 +0.40%
S&P 500 1287.70 +6.40 +0.50%
Nasdaq 100 2317.00 +14.25 +0.62%
http://finviz.com/
IQI and MUB just keep on falling and falling and falling.
ReplyDeleteIQI is down 2.99% on the DAY.
This is freaking epic in the fixed income universe.
Shades of the MBS trade of 2007-2008.
They will have to crash equities to scare people into munis.
Nasdaq Comp almost back to 2007 highs...
ReplyDeleteRa,
ReplyDeleteI mentioned it to lefty yesterday night:
Nasdaq all time high - 5132.52
Nasdaq March 09 low - 1265.52
3867 points X .382 = 1,477.19 + 1265.52 = 2,742.71
yesterdays high - 2,742.43
I have a bearish credit spread on the Q's currently, stops in place.
Geez...I take my emaciated recuperating patient out for lunch and everyone buys the dip without me. Sniff.
ReplyDeleteJust looked at the IQI chart. The muni bat signal has been turned on.
ReplyDeleteMUB back at December 2008 levels. Wow.
ReplyDeleteTwo years of gains.
This is some weird ass stuff.
Looking at TLT, could see another pull back into the sub 92 level before it takes off. Nice ascending trendline off the bottom.
ReplyDeletespx just passed thru 5 ema but was saved by ten.. that was some dip! someone added at least.
ReplyDeleteAgree that TLT has been basing nicely. We are convinced that the big sell-off in Ts is now behind us and that we can build positions in TLT, LQD and AGG here. The concept of risk in fixed income is undergoing another radical reappraisal, just as it did in 2008.
ReplyDeletethe buy the dip mentality is present and at the forefront of every single blog discussion
ReplyDeletetherefore, it's almost over
you think lloyd is going to make it easy....only for David Tepper, bitchez.
well, you got your tlt sub 92 alright!
ReplyDeleteBasic TA 101:
ReplyDeleteI have looked at 79 charts since Monday in detail, one basic thing I'm seeing all over
stocks are going higher on easy to see decreasing volume, it's everywhere.
"They will have to crash equities to scare people into munis."
ReplyDeleteYou think? Buy everything on leverage and there is plenty of money to go around.. But, I doubt the goldbugs will move into munis, lol.
i am not seeing a base in TLT.. I am seeing a H&S with divergence that supports the bear view.. That said, I understand the ramifications.. and just wonder if it can be "contained."
ReplyDeletei meant, technicals that support the bear view.. whatever..
ReplyDeleteThe steep rise and subsequent fall of TLT (which we missed, having sold before the top) were unusual one-off events driven by hedge funds and the bizarre circumstances of QE2.
ReplyDeleteIf you believe that the economy is in a "typical" recovery, the FED will hike soon, then rates will rise and you wouldn't buy TLT, MBB or LQD b/c rates are reverting to historic norms. This is the story we are being sold by MSM and the Street at the moment.
None of us really believes that, right? We have a record steep yield curve, two major buyers in the market (the Fed an the banks) and the front end is anchored. Same reasoning as April 2010.
ZIRP, bitchez. Until housing prices normalize and the market clears. Keep these fundamentals in your head.
Remember the Street wants to scare JOHN E out of bonds into stocks before the rug gets pulled out from under him.
ReplyDeleteWhoops-a-daisy....
This is how the MASTERS did it to their unsuspecting victims:
http://1.bp.blogspot.com/_V7Pddp58Py0/SpFh8-WCKKI/AAAAAAAACYE/H6u-a1qJYZI/s1600-h/nikk+95.png
"Happy Days are here again..."
ReplyDeletehttp://news.yahoo.com/s/yblog_thelookout/20110114/bs_yblog_thelookout/happy-days-big-banks-set-to-restore-dividends
I wonder if we will look back on this headline and laugh in the summer. Caveat emptor, JOHN E.
i know, i know but... laughing.. TBT trend is still up.. and that wedge in TBT:TLT still intact and ready to break one way or the other..
ReplyDeleteThe volume of horse manure that is being talked on CNBS has reached new heights this week. WE MUST BE CLOSE TO A TURN.
ReplyDeleteMuni market is in a crisis and several world capitals are burning today. If bank notes weren't coming out of the BEN BERNANK's bottom at high velocity, would anyone think that stocks were a good place to be, for goodness sake?
ReplyDeleteDanger is highest when the perceived risk is close to zero.
We just added another 5% to our fixed income position from cash.
ReplyDeleteIncrementally, we are getting more defensive in bonds as well.
I think muniland is going to be a effing disaster for a few more days or weeks and then we may have to have some kind of market save from the Wizard. Watch to see what Bill and Muhammad are doing b/c they usually get to front run the action. I predict there will be money to be made in munis, but a few people are going to get gored by this knife before it hits the deck and can be picked up safely.
ReplyDeletehttp://www.zerohedge.com/article/sec-probing-disclosures-muni-bond-prospectuses
karen,
ReplyDeletefrom a TA perspective I see little appealing on TLT chart either, from a fundamental perspective though I think differently.
Japanese 10 years have stayed between 1-2% for about a decade now, for example.
Markets, making the seemingly impossible possible, for hundreds of years
hope someone here just bot that spx dip.. tapped the 10 ema again! it's practically a GIFT.. JBTFG
ReplyDeletebill gross put over 8 million of his own money into munis in December, was reported on pretty heavy for a day or two and then the selling resumed.
ReplyDeleteI checked individual muni's on our bond desk this morning, I'd rather be selective in the space than use any fund at this point
most muni funds own a few thousand bonds, iow, you are full of it if you think you know what you own.
A little knowledge of local government might lead one to suggest that these bonds were assembled by incompetents and small time local crooks with the assistance of Wall Street. Why would anyone buy that?
ReplyDeleteThis country is truly rancid. It is taking people a really long time to see how completely and efficiently they have been fleeced. Just because the criminals wear ties doesn't mean they're not stealing.
We were in and out quickly.
ReplyDeleteSome of those munis definitely had the Tramp Stamp.
MCD sure got a nice bounce off the 200 DMA.
ReplyDeletea client remarked to me this morning that Jim Cramer is stating we will have a housing shortage in the US by early next year
ReplyDeleteclient could be repeating him incorrectly, but we laughed at this one....
The long weekend bait and switch is ready to be deployed.
ReplyDeleteThe device has been wheeled into position, Lloyd.
ReplyDeleteWe are now ready to collect the liquidity !!!
Do you really know the central bankers in dodgy Asian places?
Genius. Pure genius.
Cramer will have an audience shortage by the summer after the next big deluge. Not sure Cramericans will be rushing back after that.
ReplyDeleteWonder where Dennis Kneale is?
I am under Cramer's desk but I can't talk right now.
ReplyDeleteWe are not long of munis. Nor are we long of the yellow metal.
ReplyDeleteWe would be long of Bucky and NICKELS, BITCHEZ.
http://www.bespokeinvest.com/thinkbig/2011/1/14/a-near-perfect-pair-the-markets-and-obama.html
ReplyDeleteThis sucker's going down.
ReplyDeleteThe thread is a f$cking riot today. I laugh every time I refresh the page. I hope this blog lasts for a long, long time.
ReplyDeleteSTL
Death of deflation, death of bonds. This is the time to start accumulating as the media sirens are out in full force:
ReplyDeletehttp://www.bloomberg.com/news/2011-01-14/u-s-deflation-risk-ebbs-with-fuel-costs-at-two-year-high-economists-say.html
I thought Dennis Kneale was going to Fox. Denise Garterman -- don't forget "things you can drop on your foot."
ReplyDeleteLOL, last minute
ReplyDeleteHOD
HOW
HOM
HOY
i am guiltyand wrong! a must read for today's modern world.
ReplyDeletehttp://www.slate.com/id/2281146/
On munis-
ReplyDeleteThere are a lot of them that were issued to pay for Public/private projects like stadiums/malls and such. They probably stink the most, but I am no expert, and don't know where they fall in the creditor line....
Don't remind me...I've got a couple of spaces between my ears...see, I do read your stuff Karen.
ReplyDeleteDouble spaces
ReplyDeleteI do the same, and now and feeling shamed. Gonna be a tough habit to break.
Pretty damn slow day across the board in the markets where we deal.
ReplyDeleteAbout 1/2 the big traders were taking 4day holidays.
On an "other things note"...today marks New Years on the Julian (Caesars) calendar...sazeracs in order according to a bohunk Orthodox friend of mine.
ReplyDeleteDoing my 5 minute perusal of the Denise/Thor blog...I see she was highlighting some article about how Volatility should be an asset class.
ReplyDeleteGood luck with all that....
Trading VXX - dumb.
ReplyDeleteYou want to buy puts, buy puts or use WFDs*.
* Triple inverse ETFs - weapons of financial destruction.
AT - do you know anyone who has munis? Any panic?
Andy, I cannot believe you would torture yourself like that, really. Is LB still posting there as well? I sure won't go to find out..
ReplyDeleteThe Bond Report 1.14.11
ReplyDeleteBloody hell, chaps. This isn't your grandma's bond market. A chap can't even go to one's club for lunch in peace. Here we are between the amuse bouche and the prawn cocktail (to say nothing of a big G & T) and one is getting a call to let one know that there is a meltdown in the muni bond market. MUNIS !! I mean, usually munis move 0.01% in a day and that's because they are getting nudged around by Treasuries. Sacré bleu, as one of the French chaps, observed.
Deep Merde, is more like it, old bean, my old gran was white as a sheet after losing 20% in two weeks in some fancy bundled vehicle of Detroit GO and LA water treatment plant bonds that her broker had shoveled her into last year. Zounds.
Meanwhile, in another corner of the investment garden, the fairy Fedmother continued to wave his magic wand and the equities beanstalk continued to rise to the clouds on no volume, as all continued to be well in the Best Of All Possible Markets that has reached a permanent but constantly elevating plateau, with investors safe in the knowledge that stocks will Never Go Down in Our Lifetimes.
HY continued up, IG and Ts were sold today as we tried not to look at the muni investors in the corner, losing their religion.
Corpies: LQD -0.48%; AGG -0.21%; JNK 0.33%; HYG 0.16%
Govies: TLT -0.64%; IEI -0.08%; TIP -0.43%
Munis: IQI -2.87; MUB -1.08
Mortgages: MBB -0.15
Hedgies: TBT 1.15%
We are frankly scared shitless by this market now, and we added more bonds to our accumulating pile and hedged our equity exposure.
Equities, 14% long. 21% short.
Fixed income, total 38%. No hedge.
[HYG 18%, LQD 3%, AGG 10%, TLT 2%, TIP 5%]
http://www.bloomberg.com/news/2011-01-13/pimco-starts-loan-fund-as-prices-reach-highest-since-2007-credit-markets.html
ReplyDeletebig gap up on Tuesday seems likely, as does a big up week next week, lol.
ReplyDeleteWe love to offload a pile of shite at the top.
ReplyDeleteThe New Normal is a lot like the Old Normal.
Didn't we all agree that the most likely time for THE BIG ONE was a Monday after a choppy week into OpEx?
ReplyDeleteMark it down. Jan 24. Brown Monday.
enjoy your weekend
ReplyDeletehttp://www.youtube.com/watch?v=faEX3qjP9Mc
I'm about to rock a gigantic frou frou
Nice bond report today. ROR.
ReplyDeleteJennifer, I don't live in IL. (Too cold for me.) I'm just a Mish fanboy.
ReplyDelete