Opps.... I can request a "deletion" of the just- posted chart and repost it smaller if necessary. ET seems responsive to this. Let me know.
In a world headed for recession, with Europe and China hurting, the United States is the best looking house in a bad neighborhood. Debt vulnerability has to be considered in terms of supply / demand dynamics. Demand for USD denominated assets looks set to uptrend, not downtrend, and the Fed can support the bond market any time it wants as long as the currency has sufficient demand. This stuff is not as cut and dried as a lot of the disaster callers try to make it sound. The U.S. has various size, clout and production advantages analogous to Japan's domestic holder advantage. If someone put a gun to my head and said you have to go long dollars and USTs for the next two years or go short them, which one will it be, I would choose long.
Unless I heard or understood wrong, the last time the FED Head met Congress, he intimated the Fed was out of bullets and continued the whine about needing a feckless Congress to do its job and initiate viable fiscal policy. It was then or perhaps later an official statement came out of the Fed it would continue to do what it had to do to fulfill its mandate. (How you do that without bullets, I'm not sure.) To be fair, the quote from you did not specify the Fed. Perhaps you were referring in part to the U.S. selling off its assets ? ..... as was talked about one time the Greeks selling some of its islands ? Can I infer that with you using a scenario as tough as having to have a gun to your head to make that decision to be long the U.S. that it is a tough one for you to make ? It was just as difficult for me to--as I have done--take the other side of that trade. My vision is a continued slow slide in quality of life that the resilient American will continue to accommodate to as the swimming frog in the increasingly heated water.
A couple of trend lines intersect around that area - see attached. Also there have been 5 straight up Fridays, increasing the likelihood of a down Friday tomorrow.
isn't the fed talking tommorrow? i'm long the near term vix future yet i still think its not going to be much of a down day.. i'm as terrible as you guys are at predicting.. haha
True, although I'm not sure the market can be compared to flipping coins. I wonder if tomorrow will be like the big ECB meeting a couple months ago where Draghi disappointed and the VIX went down even though the market went down.