Global Macro Trading Journal

Discussion in 'Journals' started by Daal, Feb 25, 2011.

  1. I thought you're a buyer of FF futures?

    Not a chance by the way, a MENA blow-up will give Ben the excuse he needs to keep pumping. Economy will collapse once again if oil goes much higher. $140/barrel did it in 2008, maybe its higher this year, maybe it's lower. Don't know, but not a chance Ben hikes if, for instance, a supply disruption from SA. Even if he does hike, it'll just exacerbate the collapse, forcing a rather quick reversal.

    The existence of another central bank induced asset bubble cannot be denied. The only question is how much longer it goes on and how it ends. The fed can stay easy a lot longer than most can remain solvent. Be careful out there.

    Disclosure: as always, long american equities, long american real estate, long american prosperity, massively long the greenback (by definition), a few insurance policies in the form of OOM puts (bear spreads I think they're called) on nflx, fcx, ewh ewt, xly.
    #41     Mar 3, 2011
  2. Daal


    I'm on a defensive position of 50% of my old exposure, will buy back the other 50% as soon as I think the correction is over

    'Not a chance by the way, a MENA blow-up will give Ben the excuse he needs to keep pumping'

    So far from what I've read of president and governors speeches indicates the opposite, they are looking at iexpectations(Don Kohn made this point as well).
    If they were to go up that would lead to a wage-price spiral which would lead to higher inflation and more spirals which would hurt employment even MORE. So they would have to stop that even though the UR is quite high, this is what the FF market doesnt seem to understand, MENA makes policy be tighter than otherwise, its basic Friedman economics here, if given a choice between letting inflation get out of control but supporting employment and hurting employment but controlling inflation, they pick the latter, specially given that the former will hurt employment EVEN MORE in the long-run

    Matter of fact just yesterday Bernanke made a similar point in congress and mentioned Chairman Volcker decision to end inflation
    #42     Mar 3, 2011
  3. Felt the pain on this one. Got out early enough to cut losses at a reasonable point, but for now I'll be on the sidelines.
    #43     Mar 3, 2011
  4. Wow. He mentioned Volcker. I guess that seals it. If he mentions Jacques Reuff tomorrow, does that mean he wants to go back to gold standard? It's just talk, you realize. These guys remember 2008. If oil goes back to $150, they will not be tightening. An oil shock of this sort would be profoundly deflationary.

    As I watch the air come out of EU equities, particularly at the periphery, I am reminded of a familiar scene which we will see if it plays out ... market goes spastic (down) and the yield curve flattens (euribor futures destroyed today) at the sign of a hiking cycle. Central bank trots out one of its people to insist no such cycle is at hand. Stocks rally, currency plummets. I am currently screening euro bear put spreads and expect to put a few on before day's end.

    FWIW, the U.K . and U.S., where the punch bowls continue to be spiked are the outperformers today.
    #44     Mar 3, 2011
  5. Daal


    2008 wasn't a supply shock(more like a demand shock from EM and speculative activity), MENA might create one, this means oil WONT go down during a recession(at least not a lot), ala 70's. Its called stagflation
    #45     Mar 3, 2011
  6. Tightened today...

    Sorry, was too busy getting raped by Tricky and his bunch of merry Central Bankers. It's all gonna end in tears.
    #46     Mar 3, 2011
  7. Shagi


    BOJ Governor Masaaki Shirakawa said yesterday worsening growth prospects in Japan are causing deflation to continue and said monetary policy plays a large role in fighting persistent price declines.
    #47     Mar 3, 2011
  8. Daal


    #48     Mar 3, 2011
  9. Daal


    It's amazing that he would say that, he even mentioned that money and loan growth remain weak plus iexpectations are anchored plus everyone and their mothers are running austerity packages, core inflation is still low, he wants to grow food and gush oil with rate hikes
    #49     Mar 3, 2011
  10. I wouldn't have a problem with it, if there was an agency in the Eurozone that can deal with the intra-European imbalances. However, everyone has now basically said that it's the other guy's problem. Makes me extremely bearish about the EMU's prospects.
    #50     Mar 3, 2011