30 Yr Bond (weekly info)-no change (above mid)
trend=up
high= 121.750
rev= 118.500; mid= 120.125
Proof that QE2 raises rates as the 30 Yr Bond is now testing its weekly 3LB reversal price. The government may shut down but the long bond will continue to sell off.
CSCO (weekly info)new low 17.02
trend=down
rev= 18.40; mid= 17.71
Will Cisco make a comeback? It's showing a little strength by getting above the weekly 3LB mid. Until it's above the monthly 3LB mid it's still weak. This week is forming a bullish engulfing and could indicate a turnaround with a confirmation. But in four weeks we'll see if there is another long bearish candle after earnings. That's when will know if this is a head fake.
38 comments:
What? No dollar chart?
Or maybe EUR/USD might be appropriate...
Clear 1.43, what's to stop it from hitting 1.50?
111.87
http://www.reuters.com/article/2011/04/07/us-usa-economy-inflation-idUSTRE7367BZ20110407?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28News+%2F+US+%2F+Business+News%29
Americans to Fed: prices are too high
...Arthur Burns wasn't up to the task. It required Paul Volcker to stop stagflation the last time it broke out.
Will Bernanke-san lose his position? Not under this president.
"(Reuters) - On the streets of America, the debate over inflation is over. Prices are too high and rising too fast, many people say.
"The government says inflation is low, but that's not what I'm seeing at the grocery story," Jorge Alberto, an 88-year-old retiree in Miami, said walking out of a supermarket. "My pension is being put to the test."
Policy-makers at the U.S. Federal Reserve largely agree that promoting economic growth is still more urgent that constraining a nascent pick-up in consumer prices.
They look beyond the volatile fuel and food prices that have pushed up inflation and focus instead on data showing little if any upward rise in wages, something they would see as the seed of a sustained and broad-based rise in prices."
....That is why they now call it stagflation or cost-push inflation. This was all debated in 1980. I suppose the lesson may have to be relearned..
http://www.bloomberg.com/news/2011-04-08/portugal-may-be-forced-to-make-deeper-cuts-than-ones-rejected-by-lawmakers.html
"Europe’s rich countries pushed Portugal to make deeper-than-planned budget cuts in exchange for a rescue package that might amount to as much as 90 billion euros ($130 billion).
Finance Minister Jyrki Katainen of Finland, one of the euro region’s six AAA states, said Portugal’s deficit-reduction steps must go beyond the measures that failed to pass parliament last month and prompted new elections.
“The package must be really strict because otherwise it doesn’t make any sense,” Katainen told reporters before a euro- area finance ministers meeting today in Godollo, Hungary. “The package must be harder and more comprehensive than the one the parliament voted against.”
...Electricity only every fifth month....
"I don't think the Federal Reserve has a clue about us little people," said J. McKeever, an instructor at the Montessori Institute of Milwaukee.
"I am very frugal, so I watch what I spend. And what I have noticed in recent months is that I have less money before than I used to, while making the same amount of money and having to pay for health care," she said.
Dollar Extends Losses Versus Euro, Loonie
5 minutes ago
(RTTNews) - The dollar continued its downward spiral against the resurgent euro on Friday, as traders bet yesterday's rate hike from the European Central Bank is only the first in series of tightening measures from the ECB.
While euro zone policy makers appear vigilant on inflation, a vocal majority of voting members at the Federal Reserve have determined that higher commodity prices will only have a temporary and modest spillover effect on overall inflation.
As such, the Fed is expected to keep support measures in place, resulting in a wider interest rate gap between the U.S. and most developed nations.
The dollar dropped to $1.4415 versus the euro, its lowest since January 2010. The buck is down sharply from where it began the year at around $1.29.
The euro has gotten a lift from Portugal's request for bailout funds, as the nation finally succumbed to pressure from the bond markets.
Meanwhile, higher fuel prices pushed up U.K. output price inflation for a sixth consecutive month in March, adding pressure on the Bank of England to raise its interest rate....
http://news.ino.com/headlines/?newsid=40820110327
ibid.
...Arthur Burns wasn't up to the task. It required Paul Volcker to stop stagflation the last time it broke out.
Bruce - You're missing the point...
The debt is too high... There is not enough capital to fund it (which basically makes raising rates irrelevant this time around)...
The only "so called" capital is more PRINTED MONEY (which is already being done)...
I don't see any way it won't continue until total loss of faith in the fiat is achieved...
No, CV. I posted something the other day about the difference in debt levels from Arthur's day to Ben's day...his was 40% of D/GDP.
It is my contention that what can't be avoided won't be.
That is why they play the game...
I am thinking another 10 years of austerity...but since that is so radical, I won't mention it out loud. People might consider me goofier than they already do....
@Bruce
Just close your eyes and try to picture how many "Peggy Josephs" out there are ready to buckle up for AUSTERITY...
Then you'll ge getting close to your outcome...
Do you really think a nation of people who take advantage of a "food stamp" program (so they can have an extra $180 a month to pay for text messaging), or a nation of iron pipe weilding PUBLIC & PRIVATE UNION workers, are going to stand for AUSTERITY?
Austerity...
Is that that thing where you dutifully pay your obligations at USURY interest rates (which, in reality - will NEVER be fully paid)...
While banksters get bonuses, get bailed out at every turn, and where politicians get perks & exemptions?...
That austerity?
When Michele Obama decides to forego trips to Spain with a jet full of her home girls, and instead pitches a tent on the White House lawn for a "camp out" vacation...
Then I'll start believing AUSTERITY...
When Ritholtz starts talking about SELLING a yacht instead of SHOPPING for one... I'll believe in AUSTERITY...
When Franklin411 (or his mack daddy Paul Krugman) start saying that additional funding for education isn't HELPING the situation, or ROMER doesn't give me the numbers on how much GDP is created by these programs...
I'll believe that we're on the brink of AUSTERITY...
http://finance.yahoo.com/blogs/daily-ticker/bring-qe3-t-afford-not-more-romer-says-20110407-045249-959.html
Romer, that 'Meatface', is beneath contempt..
ibid.
I might recommend unloading some UPRO before "austerity" sets in...
Bought more UPRO yestiddy..
Gotta go, breaking up the garden, cutting up some tree tops and mowing on the zero turn up for the morning...symphony tonight...
Good luck today, trading bubbas!
Oh, sold my Japan funds...
4.65% on the long bond today. TLT under 90.
Probably see an 88 handle next week, but already nibbling.
Time to start looking at TLT July 94 calls...?
Banks will start restocking their Tier 1 capital here.
It will be a slow summer in housing and losses are coming.
We are staying away from 10y until 2s10s approaches 300 bps.
Not even close to that yet. 10s30s is already very wide.
Eventually we can pile into LQD and AGG etc. Not yet.
Mark
I share your feelings for Romer. Probably she has a big ass mortgage.
Silver baby....
Love it.
WTI high 111.90
EURO bitchez!
New WTI high 112.10
Cat food, bitchez.
http://www.bloomberg.com/news/2011-04-08/fido-s-food-set-to-take-bigger-bite-of-budget-chart-of-the-day.html
High Yield spreads are narrow enough now that accumulating in that sector is poor decision.
All other credit looks fair, so no action there. The highest quality credit looks the best right now ( but not really screaming for action ).
2s10s slope just a hair over 3month average when I checked yesterday, so not really screaming for any action, but definitely the sharp action this week is something to watch.
LB
Damn even cat food will be too expensive. What will people do then? Pets? Neighbors? Looting of UPS or FedEx trucks with Jenny Craig, Weight Watchers or Ediet deliveries?
With a little over an hour left can gold break $1480, silver break $41, oil break $113 and the dollar break below $75?
SPX: "I have peered into the abyss and it is tempting."
Then jump already!
Opening gap up from 4/1/11 CLOSED.
Where's everyone? Enjoying Grey Poupon?
DXY finally got below 75 at the close.
LB's Bond Report
No detailed Bond Report from me today, but a nice picture, and we will let Mish do the talking;
http://globaleconomicanalysis.blogspot.com/2011/04/yield-curve-widens-as-long-term-rates.html
If you look carefully at these yield curve time series you can see it is soon getting close to buying time again for 5s and 10s, and we may be there already in 30s.
As Matt points out above, buying HY would be a poor move here. This is a very good time to know what you own and how it will respond to higher rates/inflation or lower rates and slower growth (the latter being my forecast for Q3/4 if not sooner.
Obviously there are those who believe in apocalyptic breakouts in Treasury yield, but we are not among them. The US debt means that such a situation is untenable.
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