Despite the tech space getting obliterated today, investors stepped in and bought everything else. The current theme is: if the dollar is down, times are good. Oddly enough, treasuries are not trading in lock-step with the dollar any more, mainly because the Fed is buying them. God and clever dogs only know why the Fed is buying treasuries. Perhaps it’s the only way they can insure foreign participation? You tell me.
It’s all about liquidity and finding a place to put capital. For the moment, money is leaving tech and going into big cap industrials. Asset managers are playing whack-a-mole today.
Personally, I like my chances long FXY/TLT here. For now, VXX/TZA is just the butt of all backhanded jokes. I remember everything and have been keeping diligent notes of all transgressions. And, should the commodity rally continue, I like AKS too. However, it is a concern to see X trading at such low levels, considering we are supposed to be in a global growth renaissance. It’s all about jobs now, so keep your eye on that employment data—as if your lives depended on it.
[youtube:http://www.youtube.com/watch?v=MTLjYiiPy1c 616 500] If you enjoy the content at iBankCoin, please follow us on Twitter
FIRST
Dear Diary,
I was first to comment on every blog posting by noble fly today. It was a good day.
lol
+1
Indeud. +1
I’m hearing good hiring stats from automotive sector employees. Looks like a pick up in the works.
Auto workers are some of the dumbest people in the world. I highly doubt their claims are dependable.
The three people who’ve told me I respect. Also, given the scale of layoff’s they underwent and the end-of-the-world-that-wasn’t, it makes sense that this particular industry might experience a moderate rebound of growth.
I still wouldn’t get caught dead owning automotive stocks. However, it is something if you’re into that sort of thing.
I can tell you the number of autorax unit trains being hauled about by CSX is huge,,,,many sets of rail cars out of storage…empty west, full east.
The Fly is God.
we went higher…. we are going even higher tomorrow
Dr. Fly,
Fed buying treasuries for two reasons:
-because their boss told them so
-because they can
PS. Cannot come up with anything also 🙂
Fed is buying Gold too, you know.
Possible they’re trying to collapse treasury rates so banks stop making free money and have to start lending again. They want to force banks to be banks, but don’t want to raise rates and destroy the balance sheets of companies the world over, and also their own.
That’s what I originally suspected. But by doing that, the Fed risks tremendous losses in their bond portfolios.
One thing is for sure: Every tick higher in bonds takes away from profit margins at the banks.
Agree… when we reverse financials wil get hit the worst..
the question is when…
By the way even Warren now talks about bond bubble and he rearly says negative things about the Government.
He is also saying the recession is not over.
And he’s a total gaylord.
Why is the Fed buying gold?
If anything I’d expect them to sell. Raging metals prices would mean things are out of control. Of course we can sleep soundly tonight knowing the Fed has everything under control and in our best interest.
Hard to bring in a gold standard without some physical backing isn’t it? Gotta re-fill ol’ empty Knox.
Or maybe they’ll crash the price soon by dumping, and sell it all to their favourite buyer at the lowest possible price point in a few years.
Either way, they got it all under control. Nothing to see here. 😉
Think: DIGITAL GOLD.
Think: CARBON CREDITS.
or a combination of both…. as the new standard.
Why else would so many politicians own shares in Odyssey Marine Exploration and then send this company all around the world to salvage the final remaning big gold ship wrecks?
Carbon credits? The UN is already committed.
A friend who’s smarter than me observed today: “The Fed decided to reinvest them in Treasuries and maintain the level of its balance sheet; had it not done that, it would have been tightening monetary policy, since the paying off of the bonds was a movement of money out of the economy into the Fed, and to keep the same level of money, they needed to trade it for another asset…With a big balance sheet, and a positive interest rate policy (i.e. not in a liquidity trap), they have tremendous power over the rate of money moving into and out of the economy….Bernanke will keep pumping money into the asset markets until he sees some inflation. That is the only tool they have at this point. Previously, I’d thought that perhaps this wasn’t going to be enough, but given the complicity of the other central banks in the world, I can see that it is more than ample. Because everyone knows that the Fed is backstopping interest rates, they feel comfortable buying US Treasuries (the Bernanke nee Greenspan put), thus keeping borrowing rates low so that the US govt can run a deficit to stimulate the economy, and given that we run a large trade deficit, that in effect stimulates the rest of the world.”
Fish,
very good post.
State of the Union.
Looted.
Fish
I agree.
Why is everyone so sure that the dollar will bottom out soon? China is just starting to raise its currency and the Europeans don’t care so much about a higher Euro… Well, some might care but the Germans don’t care because they have the best products and the French don’t care because all women buy their expensive perfume so if Germany and France don’t care no one cares…
China is not going to follow through and actually raise their currency, whatever they say. There is no incentive for them to do so.
Jobs. PFFFFFF
Who needs jobs? We’ll have $5 gas and $10 milk, but it’s okay because the Wal-Marts will start taking shares of NFLX instead of dollars. No need to work anymore, we’ll all be on the dole soon.
When i looked all round the walls and up at the tall ceiling, i realized it was all made of paper.
And it had become like a hall of mirrors. Echos of the same misguided notions reverberating around the room.
How could one possibley stay short ‘FXY’ in light of Japan’s move to ease – now likely the preffered currency for carry trades in the not so distant future?
Its ‘triple top’ type all time high – and intervention and ‘more ease on the way’ – she is gonna turn pronto no?
I am long FXY. Japan is repatriating assets back home. They have no control.
The banner changed slightly.
Has everyone fully ruled out the double dip?
I read it’s technically impossible to call it double dip because too much time has passed. Yay.
Izzat Young Abe Lincoln?
______
Nope. It’s a statue of a nameless Minuteman Patriot located in Battle Green Square, Lexington, Massachusetts. He’s been known to surface after these attempted foreign takeovers from time to time.
Important meetings coming up ( this could be the beginning ‘Global dept restructuring’)…currency and currency manipulation front and foremost.
Scoff all you want……
A “deal” is coming
How far are we from a Global agreement (- Chinese) of a new “International Trade Instrument” ?
Several Countries have been making bold statements leading into this…Dow 36000 may not be so far fetched after all
Neighbor Fly. As you know the Homeowners Association put me in charge of security for our development. I have completed the research and hired the primate you see in the video. Please do not shoot him as he works for us.
http://www.youtube.com/watch?v=lov9mdgO4G0&feature=player_embedded
SLV shorts have been like American tourists crossing the street in the UK – looking to the left.
What shorts?
lol, you’re right
make that todays sellers
Wait till the CDO market collapses, bringing the CDS market with it.
Sellers will be soweeeeeee.
I will “Hunt brothers” them lol
I just remember when we were so eager to jump out of TNA at around 40, having loaded up in low/mid 30s.. If only we held, eh 🙂
You got that right. I was 180% long into this meltup and sold my TNA at 39 from 33.75. Also was in TYH at 25. Good lesson learned.
Fuggehdabout TNA… I had a tonne of AGQ that I’d bot high 40’s, low fitties and sold at $76 thinking I was a genius.
Almost $20 later….
(Luckily, I kept some of it.)
if you only read one thing i said in this comment section ever make it this
“this shit is gonna get wacky”
🙂
If been in meetings all day, so maybe I missed some important news…..
When the Japanese have intervened against their own currency in the past, they went into the Forex or bought US Treasuries.
But I’m wondering if Japan’s MOF and the BOJ’s frustration with the ineffective attempts to break the Yen will incite them to do the unthinkable:
…..buying non-Yen denonimated assets like stocks, even commodities and gold….anything to drive their currency lower, the dollar higher, the stock market higher, and the prospect of QE2 dimmer. They might even make some money in the process.
$420 billion is a lot of money to hit the stock markets in a short period of time.
Where am I going wrong?
Sorry, “I’ve been in meetings….”
I like it, alpha. If we’re playing by game theory rules, this would seem like Japan’s next logical move–buy stuff denominated in dollars. If everyone wants to reflate the shit out of their currency, they might as well use the added purchasing power to their advantage.
I’ve been long a small position in EWJ. It could turn out to make sense if Japan wants to reflate asset prices in order to weaken the Yen.
Japan’s version of QE2.
Mortgage Electronic Registration Systems database (“MERS”).
Find out who holds your note…Or does’nt
http://www.mersinc.org/index.aspx
http://www.marketwatch.com/story/us-bank-industry-entering-new-crisis-analyst-2010-10-06?siteid=rss&rss=1
Good artical..
I posted this on Scotts blog.
e..
bloody “e” does not work real well on a brand new Dell lap top.
Apologies for posting yet another one of these links, but there have been some good interviews recently:
Chris Whalen, Jim Rickards, Hugh Hendry http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/9/24_Chris_Whalen.html
http://ezinearticles.com/?Is-Your-Mortgage-Registered-in-the-MERS-Database?&id=2802150
intro to M.E.R.S – Mortgage Electronic Registration Systems database (“MERS”).
Scott that rumor may come true. How else do you get out of this jam.. Have fannie and freddie take over all the bad loans then adjust principle and refi…
where there is smoke…
Gold to $2000 and beyond.
blank endorsement
Open endorsement that carries only the signature of the endorser and does not specify in whose favor it is made (who is the new endorsee), thus converting a document of title (such as a ‘to order’ bill of lading) into a negotiable (bearer or transferable) instrument. Any holder (bearer) of a blank-endorsed document has claim to ownership of the merchandise or property that is the subject matter of the document. Blank-endorsed insurance policies, for example, can be used by any party to make a claim. Also called endorsement in blank.
Read more: http://www.businessdictionary.com/definition/blank-endorsement.html#ixzz11dGUU65w
This is how the MERS system, if im reading this correctly can take ownership of your house..
wow !! how simple.
AUD/USD breaking out to all time highs. Its time to stop talking about how fucked up this country is and get the fuck outa here before it turns into Mexico. Adios Amigos! Heading to Australia. Pretty soon the only thing your dollars are going to be good for is wiping your ass.
It’s time to vote new people into office who will do what needs to be done to right the ship, whose word is their bond, and who cannot and will not be bought with special interest money.
We need good old fashioned CONSERVATIVE statesmen.
Did you hear that Purdy?
………(*crickets*)
whose word is their bond, and who cannot and will not be bought with special interest money.
No offense personally, because yours is a most noble thought. However I have to wonder, what color is the sky in this fucking world you speak about?
Does anyone else thing Barry Ritholz is a total douchebag?
The guy continues to say he’s not a far left kook and continues posting up worthless far left socialist garbage to prove himself wrong.
Anyone who has any money with the guy would be infinitely better at the local OTB outlet.
What a fucking douchebag!
Go Twins!
(Damn! Yankees just scored their 1st run)
4 – 3 now, alpha.
Better cheer for the other team.
Tha Yankees win….
Thaaaaaaaa Yankees WIN!
_________
Indeud.
Getting nervous here. Waaaay too many things that don’t add up. The market has been behaving like Lady GaGa in a bi-polar way.
AAR just laid off nearly 300 people, some of whom have worked at the local plant here for 20+ years. Rumor has it the jobs are going elsewhere. The ripple effect in our two county area will be large to say the least.
Investors pulled $1.59 billion out of SPY on Tuesday due to belief that the fed was moving into treasuries. $69.8 million poured into VXX on the same day.
Go figure.
When the fed buys treasuries they are making demand. If your a big player you can Short treasuries into this demand, and get cash. You are effectively getting a low interest loan since you will have to pay the interest. You can then use that money to buy stocks paying dividends at double the rate.
This effectively pumps money into the stock market. That is how the fed buys the market up.
Do I not understand this? that is why I thought was going on.
This obviously requires some effective risk management and this can end badly if the trade needs to reverse.
OK….for the last two days I wanted to see the market kicked in the nuts and thrown into a trash can with a slushy thrown on top like one of my fav ubber geek show, GLEE. BUT the US stock markets have had gay POMO playing body guard for it, drinking his Appletinis….millions of treasuries have been bought for this rally. But….guess what boys and girls, POMO won’t be around tomorrow and we won’t know until Tuesday when the Bodyguard will be back…so now lets see how tough this market will be without its protection.
Sold all my position in profunds ultra emerging market fund today, and will sell out my position in profunds ultra semiconducter sector fund. Buying govts…(levered, of course). Short term trading money.
Still egregiously long 80% equities, as the Russell 2000 weekly MACD readings are still positive and rising, NYSE bullish percent, S&P bullish percent and world-stock bullish % are all positive.