Daily Interest Rate Monitor – April 10

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Emerging Markets: The Catch-Up Trade?

Ketchup ImageEmerging markets are finally starting to find a bid.  The Brazilian Bovespa, after a nice reversal on Friday, came into the week down almost 10 percent with most other emerging market equity indices lagging the S&P500 in a big way.  Dogs that don’t  haven’t hunted.

As the global markets internalize and works through the implications of the Bank of Japan massive quantitative easing and its affect on capital flows,  on top of continued Fed QE,  EM equities are finally starting to move.   Only so much capital can flow into the U.S. without it spilling over and looking for a home in other markets.   We’re betting on a “spillover” trade and the reallocation effect as investors become too overweight the U.S. based on relative performance.

Here’s what we said over the weekend:

It’s becoming increasingly difficult to extract market signals as the massive of flood of Bank of Japan money printing begins to flow into the global tributary, which also includes the Fed’s quantitative easing.   Markets, in our opinion, are going to become incredibly gummed up and exhibit unprecedented and unpredictable behavior throughout the rest of the year.

Who would of thought the dollar/yen pair could rally 50 percent from April 1995 to April 1997?   The yen carry trade fueled massive flows into the emerging markets,  pumped up  the U.S. dotcom bubble, and distorted Asian exchange rates… 

The ETFs do reflect currency movements along with equity returns.     The chart of the Mexico (EWW) looks a good with a classic breakout move and Brazil, we think,  has a lot of room to catch up.

We may be , and are often, wrong and recognize the liquidity trade is dangerous in the long run and can reverse on a dime.   The long run doesn’t put food on the table, however.

Always with a stop.

Apr10_EM  Apr10_MexicoApr10_BrazilApr10_EEM

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Masters Week: Champions Dinner, Bikini Wax, and Phil

Masters_ImageClick here for a great graphic of the past 20 years of menus from the Masters Champion Dinners.

Bubba Watson has yet to reveal what he will be serving up at this year’s Champions Dinner.

Here’s what our menu would like like if we had the honor of hosting the dinner:

Global Macro Monitor Masters Champions Dinner Menu

Appetizer
Yips and Salsa
Chunky Chili Dip
Fried Egg Salad

Main Course
Duck Hook Soup
Lamb Shanks
Red Snapper (served off a tee box)

Dessert
Banana Slices
Snowman Ice Cream Cones

Drink Menu
DQ  Sparkling Water
Hosel Rocket Vineyard – 1997 Pinot Noir
T.C. Chen – 1985 Chardonnay
OB Brewery Pale Ale

Fore right!

Apr9_Masters Diinner

19th Hole Fodder:

Gary McCordBack in 1995, CBS television golf analyst Gary McCord got banned from the Masters for saying “they don’t cut the greens here at Augusta, they use bikini wax.” He also described the bumpy terrain as looking “suspiciously like body bags.”

These quotes are definitely not ideal for the Masters telecast, but it seems a warning or suspension could have been sufficient. McCord has a different type of humor, and his banter with David Feherty makes for good television. It would be nice to see him return to Augusta now that it’s been 16 years.

Tom Watson actually wrote a letter to CBS and the Masters chairman demanding that McCord be fired, and apparently this had a big effect on McCord’s future at the tournament.

McCord isn’t the first to be blackballed from the Masters. Jack Whitaker was taken off the air for comments during a playoff at the 1966 Masters when he called the gallery a “mob.” Whitaker’s suspension lasted four years.

Will the Brazilians bikini wax the greens at the 2016 Rio Olympics?  Just askin’.

The last time golf was part of the Olympics was at the 1904 Games in St. Louis, Missouri, USA, “when the United States and Canada were the only two competing countries. More than a century later, golf again will be played at the 2016 Rio Olympic Games.”

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Remember This?

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U.S. Equity Sector ETF – Daily Performance

Interest Rate Monitor_ETF

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Daily Interest Rate Monitor – April 9

Interest Rate Monitor

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Masters Week: Jack and German POWs

Masters_ImageAnswer to yesterday’s Masters quiz question:

Anthony Kim posted 11 birdies in the second round of the 2009 Masters.

Here’s some more 19th hole fodder to impress your buddies and something I bet you didn’t know about Augusta:  German POWs  from nearby Camp Gordon built the bridge over Rae’s Creek next to the 13th tee box during WWII.  They were part of Rommel’s Panzer division in North Africa responsible for building bridges to enable tanks to cross rivers.

While Augusta National is famed for its almost unnaturally beautiful flora, as it turns out some rather interesting fauna once called the course home as well: 200 heads of cattle and more than 1,400 turkeys. From 1943 until late 1944, Augusta National was closed for play and transformed into a farm of sorts to help support the war effort. Some of the turkeys were given to club members during Christmas (meat rations were in effect) while the rest were sold to local residents to help fund the club. And the cows? Well, they acted as natural lawnmowers but also inflicted quite a bit of damage to Augusta National, devouring many of the course’s famed plants and shrubs.

To help repair cattle-related damage and revive Augusta National for its reopening, 42 German prisoners of war from nearby Camp Gordon were shuttled back and forth to work on the course.

Writes John Strege in “When War Played Through: Golf During World War II:”

“The POWs had been with the engineering crew serving Rommel, the Desert Fox, in North Africa, part of the Panzer division responsible for building bridges that enabled German tanks to cross rivers. It was a useful skill for the renovation work to be done at Augusta National. The Germans were asked to erect a bridge over Rae’s Creek adjacent to the tee box at the thirteenth hole.”

The Masters resumed at Augusta National — now free of German prisoners and barnyard animals — in 1946. And interestingly enough, the Supreme Commander of the Allied Forces in Europe during World War II, Dwight D. Eisenhower, later became a member of Augusta National. Two Augusta National landmarks bearing Eisenhower’s name still stand today: the Eisenhower Tree (a loblolly pine at the 17th hole that the former president and avid golfer repeatedly struck with golf balls and requested be cut down; photo above) and the Eisenhower Cabin (built in the 1950s according to Secret Service security guidelines by the club for the former president’s visits).

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Stratfor: Mexico’s Reset with China

Stratfor Latin America Analyst Elias Kraushaar discusses how increasing trade and investment opportunities between Mexico and China will affect the future of the two countries’ bilateral relationship.
For more analysis, visit: http://www.Stratfor.com

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U.S. Equity Sector ETF – Daily Performance

Interest Rate Monitor_ETF

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Daily Interest Rate Monitor – April 8

Interest Rate Monitor

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Masters Week: Who’s Your Caddy?

Masters_ImageAnswer to yesterday’s Masters quiz question:

Fruitland Nurseries occupied the land that was purchased to build Augusta National Golf Club.

Ever curse your caddy?   Here’s some history to impress your golf buddies at the 19th hole.

Although Catherine of Aragon, Henry VIII’s first wife, reportedly golfed, Mary Queen of Scots is the woman most famously associated with early golf history. Mary is also credited with introducing the term “caddy” to the golf lexicon: When she played in France, she was assisted by young men called cadets (pronounced “kuh-DAYZ”).

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Which player made the most birdies in a single round at the Masters?

a.) Tiger Woods
b.) Anthony Kim
c.) Steve Pate

La Giacca Verde

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