E Nuff Sed

Why This Rally Is Unsustainable

I agree the "pull back" everyone is expecting may not happen any time soon. The S&P 500 has already pulled back 5% twice in its 30% climb from the bottom on March 9th.
stockcharts.com/h-sc/ui?s=$SPX&p=D&st=2...
Every pull back is an invitation for more longs on the side lines to pile in

Why This Rally Is Unsustainable

I agree with the comments that TBT has been a good trade. Also TBT is showing great technical signs. I think it has another 25% to go.
stockcharts.com/def/se...[PA!B50][D][F1!3!!!2!2...
I disagree with author on his bearish position. While the market is certainly overbought technically and due to a 10 - 15% correction - its going up after this. The reasons are fundamental. Look at figure 1 in pzena's analysis. The S&P 500 relative to 10 year treasuries is cheaper than its ever been in 30 years.
www.pzena.com/investme...
As credit markets stabilize there the meltup in equity prices will continue.

Global Capital Asset Death Spiral

I believe the fix is slowly being put in place. The treasury just turned fannie and freddie into a resolution trust for mortgages. Once the new govt. is in place they can set about putting together a resolution trust which then start to buy other assets on the cheap.

American Capital Agency: Making Money the Old-Fashioned Way

The value of their existing portfolio's should increase in the short term given the explicit backing of the govt. So there might be a short term trading opportunity.

American Capital Agency: Making Money the Old-Fashioned Way

Looks like their model is the same as Annaly, Hatterras etc. The borrow short term to buy long term mortgages. This is a profitable business as long as the yeild curve is steep. The model will breakdown in a flat yeild curve or inverted yeild curve.

Financial leverage of 8 X is actually not bad. It is much better than most banks. Leverage is needed to amplify the spread between short term interest they have to pay in order to buy MBS from the GSE's.