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Greg Merrill  

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  • The Market: You Don't Buy The Last Bounce, Especially When Mars Attacks [View article]
    Note: My proprietary RiskMeter does not use equity prices or equity volatility as an input.
    Oct 4, 2011. 01:48 PM | Likes Like |Link to Comment
  • The Market: You Don't Buy The Last Bounce, Especially When Mars Attacks [View article]
    Well unfortunately that tactic worked well for so long. 'Pushing on the rope' just hid the problem with progressively more and more debt. Now the consumer is completely exhausted and lower rates are no longer the 'solution' as it will no longer work.
    Oct 4, 2011. 01:48 PM | Likes Like |Link to Comment
  • Fed Primer: Could The U.S. Repeat Weimar's Inflation Experience? Part 1 [View article]
    While there is a possibility of a Weimar style money printing induced episode of hyperinflation we are not there yet and will very likely not experience such a situation. The _amount_ of money that would need to be created is much higher than what current broad money supply figures are showing:

    http://bit.ly/pZ6uwD

    Also there is the phenomenon of money supply spiking as people rush out of investments and into the 'safety' of cash.

    If you are looking for another example of how the central bank can 'print' I point you to Japan where they've been doing it for year and it has not blown up, yet.
    Sep 22, 2011. 02:14 PM | Likes Like |Link to Comment
  • High Conviction: An Attractive Residential Mortgage REIT (Yes, You Read That Right) [View article]
    1. Ignore the xdiv date. The stock will drop by about the price of the div.

    2. Short term the nuke problems in Japan are not done with. I would wait until the Geiger counters stock clicking before I consider any purchases. (That's what I'm doing) If we get any more big 'booms' out of Japan it may cause a panic and you'll see some more dumping.
    Mar 16, 2011. 01:35 PM | Likes Like |Link to Comment
  • Oil inventories creeping upwards [View instapost]
    Unfortunately I don't think this sort of data matter much now , between the Ben Bernank and troubles in the Middle East fundamental research has been thrown out the door. Either the supply continues to flow and prices stabilize / fall OR expanding political problems create more concerns regarding supply and the price goes up... Place your bets.
    Mar 8, 2011. 05:05 PM | Likes Like |Link to Comment
  • Some Perspective on the Muni Bond Market [View article]
    I do not consider muni bond investing 'risk free' (that was sarcasm in the post) but the current situation of muni yields being higher than treasury yields of a comparable maturity is unusual and bears watching. EVENTUALLY it should return to the more normal ratio but right now it is going in the opposite direction.
    Nov 19, 2010. 01:36 PM | Likes Like |Link to Comment
  • Some Perspective on the Muni Bond Market [View article]
    I failed to comment on the BAB supply issue in my article as I should have. There's a good blog post regarding this supply demand issue at
    self-evident.org/?p=870

    I am not calling for mass defaults in the muni bond space.

    Yes, the BAB / year end tax situation can explain some of the recent price declines but muni bond prices have been falling since May.
    I do not think you can attribute the possible BAB payment credit expiration for the entire relative price decline.
    Nov 19, 2010. 01:33 PM | Likes Like |Link to Comment
  • The Fed Is Exacerbating the Move in Bonds [View article]
    Bill Gross is in a different situation because he manages so much money he IS the market in some ways. Very tought spot to be in.
    I agree his market clout is enough to where he can directly negoiate with the Treasury if he wanted to. Impressive.

    As for the credit card market, yes, the credit card companies screw over people.
    Aug 31, 2010. 05:51 PM | Likes Like |Link to Comment
  • The Fed Is Exacerbating the Move in Bonds [View article]
    I think you replied to your own argument. With the excessive debt we are seeing now the loss of growth is dramatically increasing the unemployement rate which is then forcing a lot of that 30 year debt (as you call it) to immediately callable debt.

    I think you are mis interpreting the thoughts of the 'New Normals' as Pimco coined the phrase (I believe) One may not enjoy the new normal but you had better realize what the future may hold in order to prepare for it.

    I would put to you the 'New Normal' meme is the best way to describe how 30 year T bonds are at such low yields without a crash in the equity markets.

    Creative destruction implies some destruction and thus pain along the way.
    Aug 31, 2010. 05:46 PM | 1 Like Like |Link to Comment
  • The Fed Is Exacerbating the Move in Bonds [View article]
    Shortening up the duration of US Govt lending is dangerous. While we are not there 'yet' if we continue our deficit spending for the next several years we could pass the 100% debt / gdp number and then things could get interesting for America as a reserve currency. It would be better for the gov't to lock in these low rates as much as possible. I recall this is the government's plan right now.

    A mass refinancing of home loans, regardless of credit quality, by the US government would work ONCE. Remember you would screw over all the current MBS holders (myself included) who would then require a higher yield to compensate for the possibility of the government trying that again. It looks like 'free money' but it actually isn't. I would never buy a government MBS above par again, and so would people who manage a LOT of money. That would increase lending rates in the future.
    Aug 31, 2010. 01:31 PM | Likes Like |Link to Comment
  • The Fed Is Exacerbating the Move in Bonds [View article]
    I think the inverse funds have a place in a portfolio but are like shorting stocks; they need to be used carefully. I do not think they are large enough to cause systemic risks. The big boys, hedge funds and IB's trade in orders of magnitude larger than those etf's. In my opinion HFT's are more of a problem right now.

    Leveraged etfs (whether long or short) are dangerous instruments due to their option like decay. I actually sell options against x2 etf's.

    In my opinion treasury rates will continue to fall and so will bank lending. As disclosed I'm long TLT, have been for a while.
    Aug 31, 2010. 01:18 PM | Likes Like |Link to Comment
  • The Fed Is Exacerbating the Move in Bonds [View article]
    I think the Fed realizes it can no longer use its old tool box of monetary policy changes as they no longer affect the markets. I am doubtful of any nefarious implications and you need to remember the Fed is populated by bankers and economists.

    I agree with you that what the Fed is attempting will have very little effect on the real economy.
    They allowed the bubble of excessive debt and there's no way to 'fix' it except by slowly shepherding the leverage down over time and keeping the pain and explosions to a minimum. [At least that is what I would do if you made me Fed Chairman]
    Aug 31, 2010. 01:14 PM | Likes Like |Link to Comment
  • The Fed Is Exacerbating the Move in Bonds [View article]
    So why don't you tell us how you really feel? :)
    The last question of 'Did the Fed think this through?' was half rhetorical. One method of 'repairing' bank balance sheets is to induce a steep yield curve, allowing banks to increase their lending margins.
    The Fed's purchase of longer dated Treasuries induces downward pressure further out on the yield curve, reducing bank's lending margins.
    Aug 31, 2010. 10:42 AM | Likes Like |Link to Comment
  • The Fed Is Exacerbating the Move in Bonds [View article]
    There are other demands on the bond market, including the one you mention. I was attempting to isolate another new factor entirely of the Fed's creation.
    This insta blog was upgraded to an article so if you have any other comments lets move the conversation there.
    Aug 31, 2010. 10:37 AM | Likes Like |Link to Comment
  • High Conviction: An Attractive Residential Mortgage REIT (Yes, You Read That Right) [View article]
    You can try to play the volatility but until:

    The US govt starts having problems selling debt (not there yet)
    The Fed sells off its FNMA/Freddie Mac MBS portfolio (not there yet)
    Lending picks up (really not there yet)

    I think you should keep it and collect the dividends. That's what I'm doing.
    Aug 23, 2010. 02:58 PM | 3 Likes Like |Link to Comment
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