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Macro and Cheese  

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  • The Year Of The Currency [View article]
    Agree the won seems to be linked to the relative strength (weakness in this case). I watch AUDCAD and that one has been coming down for a while now.

    I'm bearish on equities as well, and though it's a bit strange to think we'll go down this time of year for the third year in a row, I think that's what we'll get.
    May 5, 2012. 03:07 PM | 1 Like Like |Link to Comment
  • The Year Of The Currency [View article]

    It's hard to generalize and really depends on the currency and particular strategy. I am long-term bearish on the Aussie, for example, and have been short for at least two months now. I am more opportunistic with the yen and euro, and don't usually have a position for more than a few weeks. Sometimes I do daytrade currencies, basically on a mean reversion basis if I think they've gone too far, but tend to stay with medium and long term strategies.

    Also I never trade the "exotic" currencies like the Chinese yuan or Malaysian ringgit. There are undoubtedly opportunities to be had but I put a premium on liquidity and 24-hour access.
    May 5, 2012. 11:09 AM | Likes Like |Link to Comment
  • The Year Of The Currency [View article]
    I'm using options more myself these days. At least you know your downside!

    I'll have the won chart up tonight.

    Thanks for your comments.
    May 4, 2012. 09:18 PM | 1 Like Like |Link to Comment
  • The Year Of The Currency [View article]
    Have you seen an overlay of the S&P 500 with the Korean won? If you can't, go to my blog, I will post it over the weekend:

    The two charts are virtually identical...until recently. Very interesting.
    May 4, 2012. 09:05 PM | 1 Like Like |Link to Comment
  • The Year Of The Currency [View article]
    I don't know, untrusting. I would have thought at least the peso would be around. One way to play it would be to favor Mexican stocks over the US market, but there would be a lot of other factors involved in that decision.
    May 4, 2012. 08:12 PM | Likes Like |Link to Comment
  • Why Economic Charts Looking Like A Van Halen Logo May Be The Best We Can Hope For [View article]
    Love it. Always refreshing stuff. Encore!
    May 4, 2012. 02:14 PM | Likes Like |Link to Comment
  • Who Cares About Friday's Unemployment Number? [View article]
    Longer than we can stay solvent, or until government intervention stops, whichever comes last.
    May 4, 2012. 06:08 AM | Likes Like |Link to Comment
  • Did LTRO Work, And Will There Be Another? [View article]
    I completely agree, and Hollande won't be any help at all. Europe has a lot of low-hanging fruit reforms they can and should do, but it's not likely to happen. And the leverage in the banking system is so big it's truly overwhelming. So what to do? Leverage more: LTRO.
    May 3, 2012. 08:33 PM | 1 Like Like |Link to Comment
  • Is Deflation Exactly What Every U.S. Household Needs? [View article]
    This is an interesting debate, and we can all thank our host for that.

    I don't know about the 1800s, maybe there was "good" deflation. But my sense of history of the 1900s through to the present is better, and deflation is not good. Japan seems like the logical example: Booming economy followed by a bubble and collapse, and a need to deleverage as the economy contracted. Japan has been in and out of deflation over the last 15 years, and on average prices have declined. No one would argue that deflation has been good for Japan.

    Cheaper smart phones is one thing, a general decline in all prices is another.
    Apr 30, 2012. 09:30 PM | 2 Likes Like |Link to Comment
  • The Market At Equilibrium [View article]
    Thanks for reading and letting me know.
    Apr 30, 2012. 04:12 PM | Likes Like |Link to Comment
  • Is Deflation Exactly What Every U.S. Household Needs? [View article]
    Alexander if we enter deflation what will happen to peoples' spending habits if they think goods and services will cost less tomorrow than they do today?

    I don't think you would convince many Japanese to agree with you on your idea.
    Apr 30, 2012. 03:35 PM | 5 Likes Like |Link to Comment
  • Microsoft Enters The E-Book Wars [View article]
    Well-written, enjoyed reading this.
    Apr 30, 2012. 02:45 PM | 1 Like Like |Link to Comment
  • Selling The 'Sell In May, Go Away' Strategy [View article]

    Could you please explain in a paragraph the reasoning behind your chart? Since the VIX is negatively correlated to the S&P I don't follow what you are reading from the chart.

    Apr 30, 2012. 10:22 AM | 2 Likes Like |Link to Comment
  • The Market At Equilibrium [View article]
    You ask a difficult question and not easy to answer here. You can't really separate earnings from GDP in the long run. I tfind the argument that earnings are mean-reverting to be compelling. There is no doubt that corporates are doing extraordinarily well earnings-wise, but these earnings are not "normal," and competition and economic slack should bring them down towards the norm. This is not an argument for today per se, but markets tend to discount the future as well as the past. That's why markets aren't all that higher despite the great earnings of the past few weeks.

    The timing is tricky. Many indicators that I follow are weakening or diverging from the market, and that together with events in Europe (as jhooper mentioned) is the main backdrop I'm looking at for entry. But I'm the first to admit it's tricky, and because of rates bulls have the wind at their backs.
    Apr 30, 2012. 10:04 AM | 1 Like Like |Link to Comment
  • The Market At Equilibrium [View article]
    Frosty I'd be careful about drawing any conclusions regressing the period from 2008 to 2012, we were coming out of a deep trough and YoY comparisons were inflated. It's also a question of data points. A 4-year period divided into quarters only gives 16 of them; a 16-year period has 4 times as many. More data is statistically stronger and removes some of the noise. That's why I like the longer horizon, and removed the worst of the GDP data to illustrate that the trend is still down. (In fact I see no real reason to remove that data, since it can be seen as an adjustment to the inflated construction component over the 10 years or so leading to the '08 crash.)
    Apr 30, 2012. 09:07 AM | 1 Like Like |Link to Comment