Coldplay And Chris Martin At Levi

Posted on October 5, 2017 by macromon

Did Coldplay last night at Levi Stadium with a couple of borderline Millennials/iGenners.   Good kids.  Gives me hope for the future if they can find a way out of all the debt and public pension obligations we boomers have stuffed them with.  Inflation?

Chris Martin puts on one heckuva of a show and seems like one great guy.   Good at reading mood of this country.  Kissed the American flag juxtaposed with a “Love” flag to close the show.  Sincere.

The song, Vida la Vida,  reminds me of us more senior traders who used to trade on the Street when trading was trading back in the day and are now up against the “machine learned” trading ‘bots.   Progress, baby!

Apropos, on the way to the stadium, in the heart of Silicon Valley,  billboards from tech companies advertising  “Artificial Intelligence” and “Machine Learning” are ubiquitous.

 

Viva la Vida

I used to rule the world
Seas would rise when I gave the word
Now in the morning I sleep alone
Sweep the streets I used to own

I used to roll the dice
Feel the fear in my enemy’s eyes
Listen as the crowd would sing
“Now the old king is dead! Long live the king!”

.

 

Posted in Algos, Uncategorized, Video | Tagged , | Leave a comment

Fed Chair Watch

Posted on October 5, 2017 by macromon

Warsh gaining momentum in prediction markets.

Fed_watch

Posted in Fed, Monetary Policy, Uncategorized | Tagged , | Leave a comment

COTD: Corporate Debt

Posted on October 4, 2017 by macromon

No lack of supply/issuance in the corporate debt market.   No shortage of demand either.

Lots of nuances in interpreting data, however.  First, much of debt going to financial engineering, i.e., stock buybacks.  Some of the supply is borrowing against capital stuffed overseas driven by tax incentives, such as Apple.

Last, but not least,  NIRP and ZIRP – record low real interest rates.

One big concern is, given the increase in financial regulation,  who is going to make the markets and liquidity for this stuff when investors start coughing it up?

 

Corporate Debt_Oct3

(COTD = Chart of the Day)                                                          Hat Tip:  Jesse Felder

Posted in Bonds, Credit, Uncategorized | Tagged | Leave a comment

Here Is Where The Volatility Is…

Posted on October 4, 2017 by macromon

Unbelievable vol in the prediction markets over the next Fed chair.

Checked last night and Neel Kashkari, the super dove,  was over 30 cents.   John Taylor, the rules-based Stanford prof,  was up around 20 cents.   Kevin Warsh, who leans hawkish and anti-bubblista, maintains the pole position.

The selection of the next chair will be a big market moving event.  Hawk or dove?

We will try and post the graphic at the same time tomorrow to see where the market stands on the next Fed chair.

.

PredictIT

 

Posted in Fed, Monetary Policy, Uncategorized | Tagged , , , , | Leave a comment

We Have Finally Made “The Show”

Posted on October 4, 2017 by macromon

We finally made the FINGURURADAR  infographic.   Feels like we have made “the Show“.

FinGuru

 

Your shower shoes have fungus on them. You’ll never make it to the bigs with fungus on your shower shoes. Think classy, you’ll be classy. If you win 20 in the show, you can let the fungus grow back and the press’ll think you’re colorful. Until you win 20 in the show, however, it means you are a slob.
– Crash Davis, Bull Durham

Posted in Infographics, Uncategorized | Tagged , , | Leave a comment

QOTD: Free Fallin’

Posted on October 3, 2017 by macromon

I’m old enough to have lived in a country where, if you were willing to work hard, you could have a fairly nice life. You could support a family and even get a shot at owning your home but you never thought you’d get a swimming pool. Now the culture has hypnotized people into thinking they’re really nothing if they’re not wealthy and a Kardashian.  – Tom Petty,  R.I.P.

(QOTD = Quote of the Day)

Posted in Quote of the Day, Uncategorized | Tagged , | 1 Comment

Why You Need Blogs

Posted on October 3, 2017 by macromon

Here is a repost of the piece we did way back when.  More relevant today than ever as data and news have grown exponentially over the past few years.

Why Do You Need Bloggers?

Posted on October 11, 2011 by

To help you sift through the data:

The pace of data creation on the Internet is growing at an exponential rate. In any 48-hour period in 2010, more data was created than had been created by all of humanity in the past 30,000 years, according to a presentation by entrepreneur Yuri Milner. – WaPost

Why do we blog?   To discipline our thoughts and sharpen our framework of how we see the world.

 

Posted in Infographics, Uncategorized | Tagged | Leave a comment

Mrs. Watanabe Can Stand Many Things, But Not Zero Percent

Posted on October 2, 2017 by macromon

Good piece posted on Bloomberg about how Japanese retail is chasing yield in Turkey.

It’s those 10 percent-plus rates across the Turkish bond curve — among the highest in major emerging markets — that are luring Mr. and Mrs. Watanabe to the country’s assets.

Starved for return by near-zero rates at home, individual investors have propelled a 27 percent jump in Japanese mutual funds’ investments in lira-denominated bonds this year. At 50.8 billion yen ($450 million) through August, it’s poised to be the biggest annual increase since 2012, according to data from Japan’s Investment Trusts Association.  – Bloomberg

Another example that the zeitgeist of the global markets is yield chasing.

As long as there’s a decent economic narrative — the current being “synchronized global economic expansion” — valuations, fundamentals, and event risk take a back seat to the yield seekers.

Surely Ms. Watanable knows about Turkey’s twin deficits and its highest inflation in almost a half decade, not mention the risk of being pulled into Middle East war.   Ten percent can forgive a multitude of sins in today’s NIRP, ZIRP, and one percent world.  Until it doesn’t.

Seeing Japanese retail pile into a market usually was a signal of a top back in the day.

Turkey_Ms Wantabe

Nevertheless, we do not see an end to the yield-seeking zeitgeist until U.S. policy rates hit 3 percent plus (the market thinks never), the Fed balance sheet shrinks at least ten percent, and Euros are ready to roll on QT.   EMs are the place to be in this environment.

A few yuuuge hiccups along the way?  Absolutely.  We are expecting one this month.

Posted in Interest Rates, Uncategorized | Tagged , | Leave a comment

Option Value of Cash More Valuable When Scarce

Posted on October 2, 2017 by macromon

Look at the date of the cash peak and trough.

Not a perfect timing chart, but you know you’re in the zip code.  Unless, of course, this time is different.

It could take more time this time, however.

WSJ_Cash

Posted in Equities, Uncategorized | Tagged , | Leave a comment

COTD: Venezuela Oil Production (t/bpd)

Posted on October 2, 2017 by macromon

COTD_Venezuela

Ergo (among other things), this:

COTD_Venezuela_1

There is some minimum threshold level of reserves most central banks will not cross and will resort to various policies to protect and ration foreign exchange reserves, including devaluation, import restrictions, capital controls, selective default, and a full-blown debt moratorium.

Venezuela has used most of these except the latter.   That may be tested in the next five weeks as the country has $3.5 billion of debt payments coming due, mainly by the state-owned oil company known as PDVSA.

The country has been very crafty finding ways keeping PDVSA from defaulting  by rationing reserves, selective defaults to suppliers and other creditors, and finding foreign sponsors, such as China and Russia.

The next few months may be the breaking point for the country, however, especially after U.S. sanctions really begin to bite.

COTD_Venezuela_3

(COTD:  Chart of the Day)

Posted in Credit, Crude Oil, Uncategorized | Tagged , , | Leave a comment