Where are all the bears now?

[MARKETWINNER]

Yes we cannot see bears now even in Japanese market. Lot of analysts were talking about X-Japan those days.

When there were bears we should have invested in global markets. Some really missed the train. Instead of becoming bullish on stocks many became bullish on gold.

I think it is time to become bearish on AUD and NZD when others have bullish view on these currencies. It is time to become bullish on some bear currencies.

Lower AUD and NZD will benefit some sectors in Australasia in the coming quarters and years.

 

[sptrawler]

I've been moving into the market, money printing appears to have been well managed. The rich in the U.S and U.K have been buying up cheap assetts with cheap loans.
So the capitalist system roll on.

 

[Uncle Festivus]

I've been moving into the market, money printing appears to have been well managed.

What's there to manage - just hit the print button? It's the exit that can't be managed.........without consequences.



POMO night tonight so BUY!

 

[white_goodman]

What's there to manage - just hit the print button? It's the exit that can't be managed.........without consequences.

View attachment 52162

POMO night tonight so BUY!

US Fed is quite conservative, I wouldnt be too worried at the exit, they have tools (IOR,OMO) to manage if they think inflation etc is creeping in (which it hasnt hence the Evans rule), the worry is the inter temporal budget constraints of the treasury and its inflation/bond market implication... Fed % of US treasuries is at historical averages circa 15%, the notion that they are the only buyers is false

 

[FxTrader]

US Fed is quite conservative, I wouldnt be too worried at the exit, they have tools (IOR,OMO) to manage if they think inflation etc is creeping in (which it hasnt hence the Evans rule), the worry is the inter temporal budget constraints of the treasury and its inflation/bond market implication... Fed % of US treasuries is at historical averages circa 15%, the notion that they are the only buyers is false

You either must be joking or just misinformed. The Fed's balance sheet of US T Bonds is approaching 2 Trillion Dollars and constitutes over 90% of bond purchases, the total balance sheet is now over 4 Trillion! Historical averages mean nothing in the context of this unprecedented experiment (gamble) by the Fed. There is no graceful exit possible.

 

[white_goodman]

You either must be joking or just misinformed. The Fed's balance sheet of US T Bonds is approaching 2 Trillion Dollars and constitutes over 90% of bond purchases, the total balance sheet is now over 4 Trillion! Historical averages mean nothing in the context of this unprecedented experiment (gamble) by the Fed. There is no graceful exit possible.

http://macromarketmusings.blogspot.com.au/2012/11/the-biggest-myth-about-fed.html

 

[Intrinsic Value]

You either must be joking or just misinformed. The Fed's balance sheet of US T Bonds is approaching 2 Trillion Dollars and constitutes over 90% of bond purchases, the total balance sheet is now over 4 Trillion! Historical averages mean nothing in the context of this unprecedented experiment (gamble) by the Fed. There is no graceful exit possible.

There will be plenty of blood on the floor sonner or later. It is not a matter of if rather it is when.

 

[white_goodman]

There will be plenty of blood on the floor sonner or later. It is not a matter of if rather it is when.

the oracle of our time..

 

[white_goodman]

there is no easing policy at the moment, inflation (evans rule), NGDP growth trend gap, unemployment indicators say absolute the opposite, Fed policy is too tight/conservative..

low IR doesnt correlate to easy policy (if anything theres a slight bias in the data that it means tight policy)..

theres a fundamental disconnect here between the smh economics with real macro

EDIT: and confusion with CB accounting

 

[Trembling Hand]

there is no easing policy at the moment, inflation (evans rule), NGDP growth trend gap, unemployment indicators say absolute the opposite, Fed policy is too tight/conservative..

low IR doesnt correlate to easy policy (if anything theres a slight bias in the data that it means tight policy)..

theres a fundamental disconnect here between the smh economics with real macro

EDIT: and confusion with CB accounting

At last some puts it out there.

 

[FlyingFox]

This is just personal opinion from my observations so please don't think of it as the bible. I think one of the factors that most have ignored on either side of the argument that white_goodman pointed out was that the macro conditions have changed and dramatically and they will continue changing.

World population growths rates are levelling off. People are the key drivers of economic activity. Most of the big middle class drive in India and China is probably behind us.

The demographic dividend of most if not all the developed countries is behind us. The big shifts in macro factors that have driven economic growth are behind us.

Whatever the Fed or any other country prints has to contend with this change in macro conditions. Personally I would be just as worried about the situation where they are not printing enough as the one where they are printing too much.

As always the truth is probably somewhere in between the two extremes.

 

[FxTrader]

http://macromarketmusings.blogspot.com.au/2012/11/the-biggest-myth-about-fed.html

If you are going to go chart hunting in blogs to support the assertion that the Fed is behaving responsibly and just returning to historical norms then look at the charts here...

http://monetaryaffairs.blogspot.com.au/2013/03/federal-reserve-holdings-of-treasuries.html

"By the end of 2013, the Fed will own 45% of the 30-year Treasury market, and between 35%-40% of the 7-year and 10-year segments. These are pretty huge figures."

This is the harsh reality played down in the highly questionable charts and conclusions drawn in the marcromarketmusings blog.

I find the notion that the Fed is somehow not monetizing debt incredible nonsense. Operation twist, financing trillions of government debt issuance via purchase with money created by the Fed, is unsustainable voodoo economics. The arguments to the contrary are a case of wishful thinking at best.

 

[white_goodman]

If you are going to go chart hunting in blogs

yes I will, many of the leading economists in the world of macro are in the econoblogosphere..

re wishful thinking.. there are risks, but they are on the fiscal side imo, with a tad over 50% of treasuries under 2 year maturity this combined with ongoing fiscal deficits will be the engine for inflation and CB 'losses' if govt credibility comes into question

saying certain policy is destined for inevitable results is intellectually backward, even being fairly well read in macro and having post grad quals still doesnt mean I would make sweeping statements like that, even Krugman gets close to a right idea some times..

the printing = bad, buy gold, buy bitcoin tinhat silver 5000 meme is a little tired, we are in uncharted territory, I think a fiscal austerity regime with a working market toward NGDP level targeting would be my ideal based on data/research ive been seeing... this would mean less of a role for fiscal which is ideal considering the political process/vested interests.

decades ago we thought the phillips curve was the be all and end all, then it was monetarism and steady money supply growth (MV =PY with V constant), then great moderation was inflation targeting and all the ZIRP/oil shock problems related with that.. The fact so many people are 'expecting' the CB to consume losses also makes me believe that it wont be an issue. Theres going to be bumps along the road but the Fed won't be eating the catastrophic end of times losses that the zeitgeist/nwo/illuminati/zerohedge crowd believe it to be in all probability

the trend for CB's is in more unconventional policy, although rules based matched with forward guidance/expectations management... the days of tinkering with overnight cash rates may well be over considering the western world are near 0%, pros and cons, ill wait and see what type of stuff comes out

 

[CanOz]

yes I will, many of the leading economists in the world of macro are in the econoblogosphere..

re wishful thinking.. there are risks, but they are on the fiscal side imo, with a tad over 50% of treasuries under 2 year maturity this combined with ongoing fiscal deficits will be the engine for inflation and CB 'losses' if govt credibility comes into question

saying certain policy is destined for inevitable results is intellectually backward, even being fairly well read in macro and having post grad quals still doesnt mean I would make sweeping statements like that, even Krugman gets close to a right idea some times..

the printing = bad, buy gold, buy bitcoin tinhat silver 5000 meme is a little tired, we are in uncharted territory, I think a fiscal austerity regime with a working market toward NGDP level targeting would be my ideal based on data/research ive been seeing... this would mean less of a role for fiscal which is ideal considering the political process/vested interests.

decades ago we thought the phillips curve was the be all and end all, then it was monetarism and steady money supply growth (MV =PY with V constant), then great moderation was inflation targeting and all the ZIRP/oil shock problems related with that.. The fact so many people are 'expecting' the CB to consume losses also makes me believe that it wont be an issue. Theres going to be bumps along the road but the Fed won't be eating the catastrophic end of times losses that the zeitgeist/nwo/illuminati/zerohedge crowd believe it to be in all probability

the trend for CB's is in more unconventional policy, although rules based matched with forward guidance/expectations management... the days of tinkering with overnight cash rates may well be over considering the western world are near 0%, pros and cons, ill wait and see what type of stuff comes out

That's a great post Whitey

 

[Tyler Durden]

This might be one of the few Mays where there isn't a huge sell off

 

[Knobby22]

That's a great post Whitey

I agree though I don't understand all of it. "zeitgeist/nwo/illuminati/zerohedge crowd" What the!!

 

[Uncle Festivus]

The FED has absolutely no effect on equity prices.......

Operation Date: 05/14/2013
Operation Type: Outright Coupon Purchase
Release Time: 10:15 AM
Close Time: 11:00 AM
Settlement Date: 05/15/2013
Maturity/Call Date Range: 05/15/2020 - 02/15/2023
Total Par Amt Accepted (mlns) :$3,306
Total Par Amt Submitted (mlns) :$13,677

Strip out Tuesdays, big fat flatline........

 

[Uncle Festivus]

"In the fourth quarter of 2012, the Dow Jones Industrial Average had negative earings-per-share (EPS) growth and revenue growth of less than 1%. Thus far in the first quarter of 2013, the Dow Jones Industrial Average has had EPS growth of about 1%, but revenue has declined by 2.65%.

One might also suggest that without aggressive share-repurchase programs, the EPS results would be far worse than they are because the actual earnings in real dollars is declining for the companies that comprise the index. In reality, for two consecutive quarters, the Dow has actually been contracting.

This information may surprise some investors because when earnings are reported, they are always compared to analyst estimates, and investors sometimes forget to look closely at combined year-over-year growth rates.

For the Dow, year-over-year quarterly growth rates have been steadily declining since 2010. After the credit crisis, the growth rates were phenomenal, but those were compared to horrible results posted during the crisis, comps were easy, and earnings were just recovering from that meltdown.

In addition, every quarter since 2010 has seen lower and lower year-over-year growth rates for the companies comprising the Dow, and now year-over-year growth rates have reached 0%. This has officially happened two consecutive quarters in a row, but the Average keeps on moving higher. Eventually, earnings will need to increase substantially or prices will need to fall."

http://www.marketwatch.com/story/lack-of-growth-in-the-dow-reaches-dire-stage-2013-05-13

 

[Uncle Festivus]

The "conservative" US FED?



"With the Fed buying about $85 billion a month in Treasuries and mortgage bonds, the net supply to the private sector will be about zero as the central bank effectively soaks up about 90 percent of new issuance of those assets."

 

[white_goodman]

The FED has absolutely no effect on equity prices.......

who's arguing against that?