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Dr. Duru

 
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  • Draghi Does Everything But QE [View article]
    Indeed, Draghi said absolutely nothing about the euro.

    "Buy the rumor and sell the news" is an old adage, but what surprised me was that the euro actually went lower after the news before heading higher. I interpreted that to mean there were still some bears waiting for the news before all the bears got "all in."

    Anyway, I am still perplexed by the substantial reduction in excess reserves in the past year or two. That drawdown should have had some kind of positive economic impact? Or is the fact the economy has spun its wheels despite the massive reduction in reserves another sign of how bad things are...?
    Jun 6 12:38 PM | Likes Like |Link to Comment
  • Draghi Does Everything But QE [View article]
    Would love to get your commentary on the euro's complete recovery from the initial selling? Almost everyone who wanted short euro was already short? Does Draghi need to keep pushing until the euro finally weakens or can deflation be beat with a stubbornly high currency?

    Also what of the observation I have seen elsewhere that excess reserves are down significantly from a year ago and that the current size is too small to matter much if banks rush to lend it out.
    Jun 6 01:12 AM | Likes Like |Link to Comment
  • Cash Buyers And Optimism Counter The Notion Of An Imminent Housing Crisis Triggered By Baby Boomers [View article]
    I forgot to add that in surveying, 1000 is indeed large enough for a representative sample. See here for a starter on why: http://bit.ly/1uk61pu
    Jun 4 11:11 PM | Likes Like |Link to Comment
  • Cash Buyers And Optimism Counter The Notion Of An Imminent Housing Crisis Triggered By Baby Boomers [View article]
    To clarify, the point of my piece here is not to claim that Baby Boomers are creating a housing boom. Or even that Baby Boomers are suddenly prosperous as a whole. It is instead to throw plausible skepticism on the thesis that selling Baby Boomers will trigger the next housing crisis (or any housing crisis).

    It is precisely because I sense a looming sense of doom and pessimism about the prospects of our oldest generation that I like to read and highlight articles and data points that paint an alternative (and plausible) view. I remember it was not too long ago that Boomers were being blamed for being a threat to the stock market because they would try cashing out in droves with no one behind them to pick up the baton. The claims that Boomers will create a housing crash sound almost like deja vu.

    The data are clear that the housing market as a whole is still at historic lows in terms of economic activity. Instead over-projecting fresh lows over the horizon, I have preferred to look for the potential upside, particularly at whatever point the economy gets back on solid footing.
    Jun 4 09:22 PM | Likes Like |Link to Comment
  • Cash Buyers And Optimism Counter The Notion Of An Imminent Housing Crisis Triggered By Baby Boomers [View article]
    That's exactly right. Cash buyers form a solid base for the market. The investors who were first formed a base of buyers that put a floor on the market and stopped the bleeding. Today's non-investor cash buyers are early signs of reasons for future optimism, particularly for retirees as described here.
    Jun 4 09:11 PM | Likes Like |Link to Comment
  • Buy The Rumor, Sell The News: The Case Of Apple's Worldwide Developers Conference [View article]
    Thanks for the opportunity to clarify. "Rumor" is used loosely in the adage. It also refers to announcements ahead of an event. In the case of the split, what can happen is that traders will load up on shares ahead of the split, knowing that there are a bunch of buyers waiting for the event because the shares will be "cheaper" at that time. The folks who loaded up ahead of time, take advantage of the surge in liquidity to unload their shares.

    So, there is a swirl here and very hard to unpack. Monday turned out to be a down day, as usual, but at least buyers stepped in as Apple's one-day loss reached the median historical loss.

    Since I am bullish Apple here, I am most intrigued about the relative consistency of buying ahead of WWDC rather than the consistency of losses during WWDC.

    Finally, to those who have absolute confidence in the perpetuity of good fortune, like Apple's historic bull run since 2003, I say kudos. I have never been that confident about anything! Nor have I ever had such clairvoyance. (For example, the good friend who finally converted me to Apple, has been a die-hard long-time holder much to his benefit. I just wish I had met him a lot earlier in the run-up).
    Jun 3 11:57 PM | Likes Like |Link to Comment
  • Thoughts On The Mysterious Low Volatility In The Capital Markets [View article]
    It is more than just the Fed. We have heard the same observations on excessively low volatility from the Bank of England and even the Reserve Bank of Australia. (Charlie Bean posted a great spider chart of this in his last speech). I have interpreted those warnings to mean that the yields on higher risk bonds, like junk bonds, are much lower than they should be. CIt could also mean stocks are overdue for a real correction. Carney was specific when he noted that liquidity risk has been passed to the banks yet not priced into yields. (I wrote about this a week or so back). I think throwing in Tett's commentary muddles the issue a bit. There is growing recognition that volatility is too low given real risks. But I don't think it is necessary to jump to the conclusion that doomsday or another crisis is around the corner. Only that when some *new* bad news happens, the market pullback could be particularly severe. Carney in particular seemed to imply that once interest rates start their climb, the excessively low volatility will turn quickly into fresh bouts of spikes in volatility. Time will tell of course...

    The irony for me is that Carney expressed what I think all central bankers feel - when bouts of volatility come again, the Banks stand ready to use policies to prevent volatility from resolving into threats to financial stability. I think those reassurances alone naturally equate to volatility levels lower than what we might otherwise expect.
    Jun 3 04:43 PM | Likes Like |Link to Comment
  • Buy The Rumor, Sell The News: The Case Of Apple's Worldwide Developers Conference [View article]
    I don't think I really qualify as a pundit.

    I didn't think there was space in this article to explain my latest trade on AAPL. Particularly SA's policy against technical articles made me cautious not to go there in this piece. I will be explaining the latest trade on my blog. Bottom-line: I sold my shares on Friday as I noticed a fade developing. I interpreted it as a *short-term* sell signal. I am VERY eager to buy the dips (thus my disclosure that I could go long within the next 72 hours). I am also very focused on my Apple Trading Model (also covered on my blog) which could have me long as soon as Monday morning depending on how the open unfolds.
    Jun 1 04:57 AM | 9 Likes Like |Link to Comment
  • Where Is The Risk? The Ironies And Tensions Between Low Volatility And Accommodative Monetary Policies [View article]
    Glad it helped!
    May 29 08:11 PM | Likes Like |Link to Comment
  • Where Is The Risk? The Ironies And Tensions Between Low Volatility And Accommodative Monetary Policies [View article]
    Sure. Put options on leveraged ETFs like SSO. Or call options on leveraged ETFs like QID. The market is still showing no rush to pullback, so, similarly, no rush to build a full position. I like going with options because you can be wrong in the timing a few times, but make it more than worth your while when the inevitable finally strikes. I write about timing on my blog since it is mainly technical stuff (http://bit.ly/TYbx4u)
    May 29 08:10 PM | Likes Like |Link to Comment
  • Growing Stalemate: Housing Starts, Affordability And Sentiment Vs. Student Debt [View article]
    I agree that the longer first-time homebuyers stay on the sidelines, the more risk there is in the housing recovery. I just disagree we are at that point just yet. Housing activity remains well below even normal levels from prior cycles. Housing could keep chugging and churning along at this current pace for quite some time with certain local markets continuing to boom.
    May 27 02:11 AM | Likes Like |Link to Comment
  • Growing Stalemate: Housing Starts, Affordability And Sentiment Vs. Student Debt [View article]
    No connection between the ominous signs in the Australian dollar and my sentiment on housing. I think folks who pay attention to housing are VERY tuned into risk just because the scars run so deep from the popping of the housing bubble. Still, any market pullback will likely take housing-related stocks down as well. That would be a very buyable dip. More worrisome would be a setback in a wide watch of housing fundamentals.

    Note I just posted an article about the growing complacency about risk and the role of monetary policy. That might also sound strange given I am bullish about housing stocks! The way to differentiate is timeframes. I am looking at housing as still a multi-year opportunity. The overall complacency in financial markets could be swiped clean in a matter of months...
    May 27 02:09 AM | Likes Like |Link to Comment
  • Bad Signs: The Australian Dollar Trips As Iron Ore Stumbles Over $100 [View article]
    One issue is that the problems in China have been very clear for many years now. And predictions of a collapse fail to bear fruit year-after-year. Perhaps it will happen one day. But it seems that the outcome, and particularly the timing, is next to impossible to predict. I certainly would not look to any given season or month for a pay-off on related bets.
    May 26 12:47 PM | Likes Like |Link to Comment
  • Growing Stalemate: Housing Starts, Affordability And Sentiment Vs. Student Debt [View article]
    Interesting pairs trade! I like it. I will have to do more thinking on those kinds of plays given it could take some time for resolution of these various signals. I also need to look up Bill Miller's latest commentary.
    May 21 02:45 PM | Likes Like |Link to Comment
  • Bad Signs: The Australian Dollar Trips As Iron Ore Stumbles Over $100 [View article]
    Still waiting for India. Right now, the current export restrictions must be artificially deflating prices within the country (and providing at least amrginal support to global prices).
    May 21 02:41 PM | Likes Like |Link to Comment
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