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Michael Parmar

 
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  • U.S. banks to be hit with tougher capital rule [View news story]
    lol, more to the point, how much would it settle for adn how much of its obligations would it be able to meet?
    Sep 10 05:48 AM | Likes Like |Link to Comment
  • U.S. banks to be hit with tougher capital rule [View news story]
    The issue here is VAR - converting a 1 per 50 year crisis into a 1 per 75 year crisis as you move along the when TSHTF curve of probabilities further into the tails.

    Its all a casino, just like crossing the road.


    Sep 10 05:47 AM | Likes Like |Link to Comment
  • Even The Council On Foreign Relations Is Saying It: Time To Rain Money On Main Street [View article]
    Hi Ellen,

    I am a fan of your articles and look out for them. Don't get discouraged by negative comment, and thank you for your contribution
    Sep 3 09:11 AM | Likes Like |Link to Comment
  • Even The Council On Foreign Relations Is Saying It: Time To Rain Money On Main Street [View article]
    Also, the things you say about the FEd current policy being against the ropes is also a good assessment, hence sticking to their "unwind of expansion"..path
    Sep 3 07:58 AM | Likes Like |Link to Comment
  • Even The Council On Foreign Relations Is Saying It: Time To Rain Money On Main Street [View article]
    The Fed is not down to its last bullet.

    Deflation has a simple cure, which the Fed is currently looking at: increase interest rates.

    The problem is low inflation,low interest rate expectations environment. Economic growth is there, the Demand side economy is growing. The Fed has met its targets and is looking at the cure for the liquidity trap. Dropping more money into peoples pots is not going to do it, despite what the CFR, who generally have no idea about economics, says. They are great at foreign policy assessment, but fail economics 101.

    Nice article though
    Sep 3 07:56 AM | Likes Like |Link to Comment
  • Reacting To Earnings Reports: Let's Get Real! [View article]
    Great article and an area of growing interest.

    This is an external validation of something we help corporates with via predictive analytics methods: how brands are managed and corp communications campaigns are managed and day-to-day news generated from the company affects share-price volatility, analyst perceptions and ultimately the firm's cost of capital.

    It is surprising how few big companies make the link between their front end communications (except when in crisis mode) and the impact on their key investing KPIs, something all small companies do.
    Aug 11 05:59 AM | Likes Like |Link to Comment
  • Calm Before The Storm? [View article]
    Great article, nice review, always enjoy your style and more importantly, insight into the bigger picture

    As you say, unemployment rates rarely get much better than this. To get to recession, however, needs normally, inflationary pressure and monetary policy tightening ( i think you had an article about how monetary policy tightening almost always precedes recession?).

    IMHO with unemployment this low, Fed is free to aim at one thing, inflation control, and has flexibility to move interest rates.

    Here is an "unintended paradox" of current FED policy: lower interest rates/easy money from here stoke inflation, so Fed will start warning about inflation dangers -> people start heading for risk exits -> lowering interest rates in risk off asset prices -> key interest rates dont move up, they go down!

    Fed signals danger, puts up interest rates, contributes to "risk off/rush for exits"

    I think Fed will be far more flexible in rate increases than people suspect at the moment, because the Fed will be concerned about interest rate insensitivity/investor complacency and an underestimate of inflation pressures. My arguments are here: (http://seekingalpha.co...)

    The price of offloading risk to someone else is drifting to normal as you say, some people looking ahead to the not so soft landing.

    Everyone has been talking about "in anticipation of Fed tightening, interest rates are rising" but so far signs are all about risk repositioning in IMHO, long bond rates are falling...

    I would be very interested on your views on inflation pressures and term structure: would you be publishing something on that soon?
    Aug 8 02:59 AM | Likes Like |Link to Comment
  • Patient Bulls Finally Get A New Entry Point, Thanks To Inflation Fears [View article]
    anarchist, i think the bigger picture (now) is that there is a recovery, there is a long term up-trend in equities still intact.

    3% from the highs (unless you are a short term trader) is not a significant entry point especially with clear signals of monetary policy change coming (which I think will be sooner and faster than the market expects) and market concerns about equities being over priced (I personally don't see significant overpricing in the current environment, but there are some "stretched valuations" as the Fed puts it)
    Aug 4 09:28 PM | Likes Like |Link to Comment
  • Patient Bulls Finally Get A New Entry Point, Thanks To Inflation Fears [View article]
    David, what about demand pull inflation?

    As you say, many commodity prices are at cost of production. China just launched its own form of QE, demand is rising across all continents, where are commodity prices going to go from here? Below cost of production?

    The link between Wage inflation and final goods price inflation is the link the FED is trying to keep anchored when it says "long run inflation expectations remain anchored"

    And it will raise interest rates.

    I appreciate Scotts article, its a good exposition of momentum trading on technicals which is pointing to buy the dip. I would advise people to look at the bigger picture as well

    Aug 4 07:36 PM | Likes Like |Link to Comment
  • The Fed Is Changing Gear [View article]
    Thanks for your comment Moon Kil Woong,

    Has there been an increase/weighting in the proportion of short maturity bond buying by the Fed?

    That would make sense for the Fed in the run up to an interest rate change, and as you point out an interest rate change would re-balancing in its purchase strategy too..

    The Fed is unlikely to reverse much of the QE purchases sitting on its balance sheet, it will just hold to maturity. In that sense, it is not going to exit QE for a long time to come. It is hoping purchasing the MBS rubbish off bank balance sheets is a one off, with repetition of the last crisis being prevented by the whole new set of banking regulations, oversights, and so on.

    For those willing to believe - or betting - that the Fed will support the main economy by allowing inflation to take hold in order to keep unemployment down - are all mistaken. The Fed does not and will not act this way.

    Despite my posting evidence to show this, people refuse to believe it.

    The Fed has a 1.6% to 1.8% central inflation forecast for the rest of this year until 2016, and its behaviour is clearly, in those circumstances, accommodative with low interest rates.

    Inflation trends suggest higher rates - beyond 2% in part of the rest of thiis year and into the next, making the Fed anxious.

    I would not worry about an economic collapse or a collapse of the US $ just yet, we are in a socialist Fed controlled capital market.
    Aug 4 07:21 PM | Likes Like |Link to Comment
  • The Fed Is Changing Gear [View article]
    Just some guy, thanks for your comment.

    Indeed, because they bought those trillions in real estate, they don't have to worry about it again.

    Think about it.
    Aug 4 10:51 AM | Likes Like |Link to Comment
  • The Fed Is Changing Gear [View article]
    Ptstanford, thanks for your comment and sentiment, i share it
    Aug 4 10:43 AM | Likes Like |Link to Comment
  • The Fed Is Changing Gear [View article]
    The Fed's adopted its EXTREME policy to keep inflation expectations anchored at 2%, not create new expectations of lower than 2% or deflation.

    IT is still worried about this, hence it is still where it is today. But once inflation is heading beyond 2% it will have evidence that people are starting to build inflation expectations beyond 2%, and MUST act to keep them anchored.


    The FED is not anyone's friend, the FED has policy objectives.
    Aug 4 10:41 AM | Likes Like |Link to Comment
  • The Fed Is Changing Gear [View article]
    Many thanks for your kind words.

    If I had said it I would have been shot down for blowing my own trumpet.
    But I totally agree with you. This is IMHO, the most important issue in the market today.

    Many thanks.
    Aug 4 10:37 AM | Likes Like |Link to Comment
  • Reaching For Yield [View article]
    Owen, thanks for a great article.

    I was curious to see what your WMA US composite risk indicator looked like with the periods of QE overlaid? And also for the European one, connect it to monetary policy?

    If you cant put it into comments or perhaps write short follow up article, would you be kind enough to message me with the graph?

    Many thanks for the insights in this article
    Jul 29 10:53 AM | Likes Like |Link to Comment
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