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Lawrence Fuller

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  • The Fed Is Backed Into A Corner With No Way Out [View article]
    I feel like we could do this all day Joseph, too bad we are not in a bar with a beer in hand. I appreciate you continuing to hash these issues out in the articles you write. If only there was some transparency on what sits on bank balance sheets, we might understand better. Thanks for the work.
    Mar 26 01:01 PM | 3 Likes Like |Link to Comment
  • The Fed Is Backed Into A Corner With No Way Out [View article]
    I would think that the hypo and rehypo of assets purchased with QE liquidity through the bank channel would be a bigger influence on US risk assets than the carry trade - that's my guess - but its so difficult to know. As you have said, it seems very coordinated and structured, this is not a random event or one that comes and goes.
    Mar 26 12:19 PM | 3 Likes Like |Link to Comment
  • The Fed Is Backed Into A Corner With No Way Out [View article]
    One problem Russia is going to have is pulling all that energy out of the ground if they shut out the west - same goes for China - they don't have the technology. If VISA and Mastercard boycotted Russian banks, they could turn the whole country into a cash economy and shut it down overnight.

    Regardless, your point about the dollar is well taken, and the carry trade is alive and well, but if i'm borrowing in yen, why am i necessarily investing in the US? And if so, why US stocks... i'm a little slow on this topic, but you lost me there. I got a little lost in the article on this point, which I know was major one.
    Mar 26 10:40 AM | 4 Likes Like |Link to Comment
  • The Fed Is Backed Into A Corner With No Way Out [View article]
    I have no idea what's really going on. All I know is that after watching a screen for 20 years, I know that somethings different, and I started noticing it a few years ago, as did others I work with. I spoke with a good friend yesterday in the hedge fund community that tells me hedge funds are no where near as leveraged as they used to be, in fact sitting on large cash balances, which is also confirmed by some of the large net exposure surveys I have access to, so the typical speculators (hedges) are not the manipulators in my view. They also don't care which way the market moves, and prefer volatility both ways- their returns are also horrible, indicating they are not the manipulators.

    All of the research I have done on HFT tells me that could be a big part of it. I know that the perfect market environment for them is a slow steady uptrend that pulls back gently every so often, allowing them to "layer" in and out rapid fire. Every time I enter an order, the bid is complete BS, as is the ask, both of which disappear the second I place my trade. I feel like i'm going through a toll booth on every trade, even with a limit. Its an abomination.

    The correction comes when valuations are so absurd that even the invisible hand must back off, as I think we are starting to see in R2K. There is clearly underperformance starting to show there in recent days, and look at today. That's the beginning of it in my view - biotechs, social media, small caps. Then it works its way up.
    Mar 26 10:06 AM | 8 Likes Like |Link to Comment
  • The Fed Is Backed Into A Corner With No Way Out [View article]
    That's an interesting read Joseph, but couldn't the NY Fed or a proxy hedge fund just roll $10 or 20 billion in S&P futures endlessly and produce the same effect in the US market - a pseudo plunge protection team as its been called - any time the SPY falls 2% or so? Also seems like the HFT process of "layering" could lead to a similar result.
    Mar 26 07:34 AM | 4 Likes Like |Link to Comment
  • The Evolution Of Quantitative Easing - A House Of Cards [View article]
    Thank you for the gracious comment, it makes it all worth while. I really appreciate that. I'll strive to continue to so in future, I just wish it didn't take me so long to write :)
    Mar 23 10:28 PM | 2 Likes Like |Link to Comment
  • The Evolution Of Quantitative Easing - A House Of Cards [View article]
    Thank you lienlea,

    I may have lost some readers with the House of Cards analogy, but I thought it extremely fitting. For anyone that has not seen this show on Netflix, it is one of the best shows on TV, wow, Kevin Spacey is amazing.
    Mar 23 09:23 AM | Likes Like |Link to Comment
  • The Evolution Of Quantitative Easing - A House Of Cards [View article]
    Excellent summation of your own rmwccoy
    Mar 23 09:20 AM | Likes Like |Link to Comment
  • The Evolution Of Quantitative Easing - A House Of Cards [View article]
    Hi Jerdog,
    Thanks for sending this article, as someone else emailed it to me. The difference between Cullen's correlation is that he is comparing the growth in reserves, while I'm comparing the actual QE purchases. The day of open market operations doesn't immediately translate into reserve growth. It also doesn't account for financial institutions do with those $$ in terms of investing or lending indirectly with the new funds via hypo/rehypo. At least that's my view.
    Mar 23 09:19 AM | Likes Like |Link to Comment
  • The Evolution Of Quantitative Easing - A House Of Cards [View article]
    Thanks for the comment Alan,
    I think I probably lost a few readers with the House of Cards analogy, but when I marathon watched it, I couldn't help but think about the situation today in the real world. It is disgusting. No one wants to talk about it like they are walking on egg shells. No one really wants to expose how broken our system is today, especially how it has fueled a large percentage of the latter stages of this bull market. I love bull markets ! After 20 years of investing though, I want to see one that isn't built on excesses and malinvestment.
    Mar 22 02:04 PM | 3 Likes Like |Link to Comment
  • The Evolution Of Quantitative Easing - A House Of Cards [View article]
    Thank you Seeking Truth,
    I think the general belief is that the Fed is a branch of government that serves the people, which couldn't be further from the truth. It is a bank. Many have no understanding of what the NY Fed does, how it operates, that the CEOs of Wall Street investment banks sit on its board. That it has a trading floor and employs 3,000 people. That the former head of the trading operation just went to work for one of the largest quant hedge funds in the world.

    I'd be happy to eliminate it. A monkey could have lowered short term interest rates to zero and announced it was going to finance the gov't deficits for the next fives years and purchase all the junk debt that wall street firms wanted to dump on it. The Fed is batting ZERO on all of its economic forecasts. Its serves absolutely no value as I see it. I think it a cancer on what was a free market economy.
    Mar 22 02:02 PM | 3 Likes Like |Link to Comment
  • The Evolution Of Quantitative Easing - A House Of Cards [View article]
    Thanks for reading and the comment.
    Mar 22 01:56 PM | Likes Like |Link to Comment
  • The Evolution Of Quantitative Easing - A House Of Cards [View article]
    I always enjoy your experienced and thoughtful comments bartpr, and thanks for reading. I see a lot of similarities today to the 2000 and 2007 period, but it is also very, very different. The leverage and malinvestment are the same, but the Fed's QE program is obviously very, very different. I think Europe and Japan's coordination with the Fed this time makes it global and serious. I still see investment opportunities, but far fewer than 2-3 years ago.
    Mar 22 01:55 PM | Likes Like |Link to Comment
  • The Evolution Of Quantitative Easing - A House Of Cards [View article]
    Very much appreciate the comment, as that was my objective.
    Mar 22 08:52 AM | 1 Like Like |Link to Comment
  • The Greatest Danger For Stock Investors Today [View article]
    OK Ben, I'll root for Vandy and you pull for the Heels and we'll call it a day.
    Mar 21 08:49 PM | 2 Likes Like |Link to Comment
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