Global Macro Trading Journal

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

  1. Daal

    Daal

    The UST missing an interest payment seems to be a ultra unlikely event. As I said in the past people seem to be unaware that the Fed would step in to prevent such outcome, invoking section 13(3). They would not even need collateral for the loan since it would essentially a purchase of a UST. This could be complicated by some law that prevents the Fed from directly lending to the UST(But I'm not confident of that) but they can bypass this issue by lending to an LLC(Maiden Laine No n) which in turn lends to the UST
     
    #711     Jul 18, 2011
  2. jj90

    jj90

    Even if the UST misses an interest payment, and sovereign CDSs tick up, its not the end of the world. I'm more concerned about the interest payment/GDP ratio. What's the current figure, 10% of GDP? If that ratio gets unsustainable, the world will realize that 1 missed payment is not a 1 off issue, and then shit will hit the fan. Again, not the end of the global financial system, but beginning of the end for the US.
     
    #712     Jul 18, 2011
  3. ammo

    ammo

  4. ammo

    ammo

    can anyone explain what this does for the need of a qe3
     
    #714     Jul 18, 2011
  5. Daal

    Daal

    #715     Jul 19, 2011
  6. Daal

    Daal

    #716     Jul 20, 2011
  7. U.S. equities are higher since he spoke. I think he made himself quite clear. There will be no QE3 until there is QE3. The Bernanke put is firmly in place. Let's hope it works better than the Greenspan put, which consigned a generation to crap returns from stocks.
     
    #717     Jul 20, 2011
  8. With stocks, one thing I found helpful was to look back over the last 20, 30, even 50 years and see which were the best performing equities in any given year or decade, then try to work out what characteristics they shared. Generally I find that huge winners are either deep value situations bought dirt-cheap in times of crisis, companies which have some kind of innovative product or service plus dynamic management/CEO and which revolutionise their industry sector for years on end (e.g. MSFT & DELL in the 90s, AAPL in the 2000s), or the 'best of breed' companies in some kind of secular sector boom (e.g. commodities in the last 10 years, or tech in 1990s).

    Another approach I found useful was to study the big winners of renowned investors like Buffett and so on, and try to work out how they spotted them and held on - and also what mistakes they made, if any (e.g. Buffett holding Coke and Gilette in 1998 at 40-50 times earnings - terrible blunder).

    In any case, doing this kind of analysis teaches a lot about how stocks perform, how businesses operate, and so on.
     
    #718     Jul 20, 2011
  9. The problem with it is that if the EU goes into recession due to a debt crisis contagion, Norway will get hammered.

    If you want a soundly financed economy & currency, with rates outlook in favour, then I'd go for the Singapore dollar instead.
     
    #719     Jul 20, 2011
  10. The flip side is that you get almost no carry with CHFSGD.
     
    #720     Jul 20, 2011