Seeking Alpha
View as an RSS Feed

Tao Jaxx  

View Tao Jaxx's Comments BY TICKER:

Latest  |  Highest rated
  • Yuan heads lower for second day as China sets rate near market's close [View news story]
    Funny to see all talking heads gravely opining that, yes, China now lets "market forces play" while 2 weeks ago same China sent their Army and Navy to round up short sellers on the stock market.
    So they let "the market" set the rate to devalue their reserve currency wannabe but they make stock prices move upward at gun point?
    Best case is the last move is deliberate: they manipulate FX like they did stocks, only in the opposite direction.
    Worst case is they don't have a choice: capital outflows drain the economy as they contract money supply so PBOC has no choice but devalue what was touted to be tomorrow's super currency. That's the only way to dampen tightening impact of capital flight.
    Aug 12, 2015. 12:02 AM | 2 Likes Like |Link to Comment
  • Trouble Is Brewing In The Markets [View article]
    Market timing, market timing...
    So anybody who followed those considerations lost over 1% from being out of the market today.
    Statistics (see Taleb's book) show that the bulk of portfolio performance originates in a very limited number of strongly up days. This is one of them.
    Aug 10, 2015. 05:58 PM | Likes Like |Link to Comment
  • Buyback Nation [View article]
    I may be missing something here. You say "we should expect financially strong businesses to recapitalize when rates are low".
    Right. But they're doing the opposite: They're de-capitalizing, or leveraging up by paying back capital and stocking up on debt.
    Which the tax system encourages them to do, while the Modigliani Miller theorem works nicely in theory but not at all in practice.
    Jun 5, 2015. 09:11 AM | 2 Likes Like |Link to Comment
  • Buyback Nation [View article]
    Surprised no one would raise the unequal tax treatment of debt and equity as a reason for this buyback frenzy. True, lack of profitable investment is a driving force behind returning capital to shareholders. But making the tax treatment between debt service and dividends neutral would eliminate a powerful incentive to leverage up to send money back to shareholders à la Apple.
    Not to mention this pathetic "financial innovation" of private equity eviscerating companies (and their previous shareholders' wealth) to pay special dividends to the "value unlocking" (yes, yes, that's what they call themselves) new managers.
    Modigliani Miller anyone?
    Jun 4, 2015. 08:05 PM | 1 Like Like |Link to Comment
  • Amateur Hour In China? [View article]
    Nice article: Fundamentals are bearish but "Flow of Funds reasons" (lack of alternative investments) are bullish.
    I'll take the latter over the former any day in China's case: Fundamentals are a side show if the almighty central planners so decide.
    May be tempted by the long side. As they say, enjoy the party, but stay close to the door!
    Is there a futures contract on the Chinese index one can access from the US?
    Apr 26, 2015. 05:12 PM | Likes Like |Link to Comment
  • Gold Rally Underway, But First Test Dead Ahead [View article]
    Added here, really?
    Mar 10, 2015. 08:39 AM | Likes Like |Link to Comment
  • Gold Rally Underway, But First Test Dead Ahead [View article]
    "Happy to stick with my call"
    Mar 6, 2015. 01:14 PM | Likes Like |Link to Comment
  • Gold Rally Underway, But First Test Dead Ahead [View article]
    "Gold Rally Underway"?
    Mar 6, 2015. 01:50 AM | Likes Like |Link to Comment
  • Annaly Capital And Chimera Investment Corp.: The Problem Facing Mortgage REITs [View article]
    So your strategy on mREITs is to have the price risk and no dividend? Plus the tax consequences (wash sales galore on Schedule D...)
    Feb 22, 2015. 07:56 AM | Likes Like |Link to Comment
  • The FOMC And Liftoff Levers [View article]
    Dear author
    You seem to focus exclusively on banks deposit rates (liability side). But interest paid by the Fed on reserves is the ultimate risk free rate (ASSET side for the commercial banks). As such, its rise will be transmitted to all bank LENDING rates, which will be the transmission channel for the Fed hike: if a bank gets 50bp from a zero risk asset (its reserve account at the Fed) rather than 25bp, it has no reason to keep its risky lending rates to borrowers unchanged. That's the main tool and it does not rely on any "goodwill" or "cooperative spirit" from the banks, just their profit maximizing goal.
    The ON RPP is a technical tool allowing non-banks to reap the "benefit" of higher rates, but certainly not the main transmission mechanism, just a complementary one.
    Feb 21, 2015. 11:25 PM | Likes Like |Link to Comment
  • GLD - Getting On The Record With The Gold ETF [View article]
    Thank you all for responding.
    Last year 10y yields went pretty smoothly from 3% Jan 1st to 2.17 Dec 31. So pretty favorable to gold except twice in the year yields backed up and that had gold tank:
    Aug 28th 10Y 2.39 Gold $1286, Sep 12th 10Y 2.62, gold $1231.
    Then Oct 15th 10Y 2.15 gold $1237, Nov 6th 10Y 2.39 Gold $1145.


    No I don't believe strongly in my thesis, that's why I'm here to learn from others. Sure, dollar correlation is far from 100%, but it's "reasonably reliable" as I said. It sure works...until it doesn't. Thats why I ask. I focus on US 10Y Yields by the way, not on spot dollar.
    You rightly mention that "gold has been in an uptrend since Nov", Yup, 10y yields went from 2.36 Nov 1st to 1.68 Feb 2nd.
    Then you say "gold has slid in Feb". Fully agree, 10Y yield went from 1.68 to 2.13 yesterday.
    -China sells Treasuries because they have capital outflows. So they sell dollars to stem currency depreciation (who would've thunk they'd get to this some day lol?). Somebody else buys the Treasuries with the dollars PBOC sells.
    -There's some but not much money flowing from US to euro stocks; most of it is going to come from the ECB trillion euro printing, they don't need anybody's help to inflate the bubble…
    So I don't know if I'm right either. Just my $.02. Trying to spot where I may be wrong. I'll change my mind on a dime if need be. As I did early February when I was all gung ho on gold.
    Feb 21, 2015. 10:39 PM | 1 Like Like |Link to Comment
  • GLD - Getting On The Record With The Gold ETF [View article]
    Fair enough as an investment thesis. That was mine until early February.
    Since then, things have changed markedly due to rising $ interest rates. So two questions for the author (and anybody who cares to listen):

    Why would the dollar weaken while the interest rate differential with both euro and yen increases?

    Gold has a reasonably reliable inverse correlation with US 10Y yields. These have moved from 1.68% end January to 2.13% yesterday. What would help gold beat that headwind?
    Feb 21, 2015. 06:59 PM | 1 Like Like |Link to Comment
  • Initial Mining Earnings Essentially Confirm Peak Gold [View article]
    Gold yearly production is about 2000 tons. Gold has unique characteristics: it does not get consumed. Never. Gold above ground inventory (so accumulated production since humans roam the planet) is roughly 175,000 tons. Of which about 60 to 70% is held as investment and therefore available for sale anytime real interest rates turn positive. That's an over 110,000 tons hangover.
    Given these facts, how can a "peak gold" theory impact prices?
    (Not to even mention how credible "peak oil" turned out to be…).
    Stick to 5% of your holdings in gold and forget about it. Zero income but great diversifier.
    Feb 21, 2015. 10:27 AM | Likes Like |Link to Comment
  • FOMC Cautious, But Still Set To Hike Before The UK's MPC [View article]
    We had the doubters go first on "QE to infinity!". Then they downgraded to "The Fed will not taper". So then they came up with "there will be QE4". Then they downshifted to "The Fed will never hike". Then, "not this year". Now we have "25 bp at most".
    So yes. QE is over, job growth returned, Wall Mart hiked wages, the Fed will hike. This year. By 25 basis point. In June. Or September.
    Mr.Market finally woke up on that one. Time to fade the deflation trade. Look at the yield curve moves this month: 2y/10y from 120bp to 146bp. 2Y note from .47% to .67%
    Feb 21, 2015. 10:14 AM | Likes Like |Link to Comment
  • Talking Points On 'America's Imminent Budget Crisis': Focus [View article]
    Nicely drafted response. I am surprised though that in this debate no mention is ever made of what the debt would finance.
    The discussion revolves around the absolute level of debt, which is a short sighted "single entry accounting" view. The real issue is what is that debt used for?
    Debt is neither bad nor good in itself. It is a tool that can be used smartly, financing productive infrastructure an other high yielding assets, or that can be abused, financing useless wars and welfare benefits for unskilled illegals.
    That's the real debate we should have, not the hollow one-liner catchy soundbites.
    Feb 21, 2015. 09:59 AM | 5 Likes Like |Link to Comment