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  • The Fed's 'Own Goal' [View article]
    Sure, Jason, the crisis was everyone's fault except for the banks' management. I guess I am the populist, then. It could have been worse, you could have accused me of being an economist. Anyway, I must be in the wrong business, so please keep it low, otherwise I will get kicked out of the hedge fund business.
    Jun 24 02:21 PM | Likes Like |Link to Comment
  • The Fed's 'Own Goal' [View article]
    Jason, I love your rant and how easily you blame and disqualify people who have a different opinion. What facts? Poor bankers as the victims of the crisis? That's rich. Who are the guilty parties, in your opinion, then? I think the overall criticism of the banking industry is fair. But what do I know, anyhow.
    Jun 21 03:14 PM | 2 Likes Like |Link to Comment
  • The Fed's 'Own Goal' [View article]
    Interestingly, in spite of the contentious back and forth between the two of you about semantics, I put it to you, respectfully, that you seem to have, both, completely missed the real meaning of the broad complain against most banks having been bailed out and, hence, not having learned their lesson: The complain isn't that the banks' shareholders didn't suffer enough or that they didn't learn their lesson. The complain is that banks' management, who were truly at fault, didn't.
    And, so, we are likely to find ourselves in a similar mess again in the future.
    Jun 21 07:20 AM | 1 Like Like |Link to Comment
  • The Fed's 'Own Goal' [View article]
    Excellent article, Mike. Excellent.
    Jun 19 05:06 PM | 2 Likes Like |Link to Comment
  • They Came To Play [View article]
    ¨...but is actively taking steps to make sure that the liquidity being added to the system is flushed, rather than leaked, into the transactional money supply.¨

    This, IMO, is the most significant difference between previous steps the ECB or the Fed have taken. A common and valid complain about how central banks have managed the crisis is that while they have done practically anything to help and prop up the banks, they have done almost nothing to make sure that their actions pass through to the bank's customers and the real economy (other than unnecessarily pushing up financial markets). The banks have highly profited from the central banks' actions but didn't do anything to help their customers or the real economy. The ECB's actions, this time around, hope to change that. Perhaps they should have thought along these lines from the very start.
    Jun 6 05:45 PM | 4 Likes Like |Link to Comment
  • Apple: Reality Bites, So Time To Sell [View article]
    Less than 10 months later and AAPL is already almost 50% higher and it seems ready to crack $700 again.

    As I wrote in my original post: "the timing of your advise to sell Apple is horrendous."
    Jun 5 04:52 PM | Likes Like |Link to Comment
  • Worried About Not Being Worried [View article]
    Well Mike, apparently the Fed is, finally, also worried about everyone not being worried. Surprisingly, the Fed also seems to accept that they have been the main cause of such complacency.

    Hilsenrath speaking up on the issue is significant, IMO, as he is the Fed's preferred megaphone.

    "Hilsenrath Confirms Fed Angry At Itself For Making "Market" Too Risk-Free."
    Jun 3 05:21 PM | 1 Like Like |Link to Comment
  • What's The Bond Market Telling Us? [View article]
    "So, what is the bond market telling us? The bond market is telling us that inflation is currently low."

    Well no, you had it right the first time around, before you oversimplified it:

    "...the assumption is that lower yields are a sign that inflation expectations are low..."

    Bond market prices are, indeed, more closely correlated with future inflation expectation. The problem is that current bond prices would indicate future near-term low inflation that most experts believe will not be the case. How much of a divergence between the current bond prices and near-term inflation is the real issue. Being that yields are so low (and prices so high), get the inflation part wrong, and you are bound to lose money.

    As wether equity or bond traders are right or wrong, you haven't considered a third option: That the bond market is mispriced and bond traders are right but short treasuries. So, it is more likely that bond trades are short (and right, if the market is mispriced and yields will rise), and investors, who are long treasuries, are wrong and will lose money.

    BTW, you can apply the same principle to the equity markets where retail investors who buy at these levels will, in all likelihood, end up holding the bag.
    May 30 08:24 PM | Likes Like |Link to Comment
  • Deflation, Indeed! [View article]
    As always, excellent post, Mike.
    May 16 05:54 PM | 1 Like Like |Link to Comment
  • Patience Is A Pain [View article]
    Good timing, Mike.

    Today's 30-year auction was weaker than expected with non-dealers demand dropping significantly, which resulted in a considerable divergence in bonds: 30Y +3bps, 5Y -3bps. So the curve is steepening modestly.

    In spite of Yellen's testimony, did we just witness the start of the long bonds' turnaround and the steepening of the curve today?
    May 8 05:59 PM | Likes Like |Link to Comment
  • Evaluating The New Kid [View article]
    What are the real, tangible effects of the Fed's policies in the market place? A complete disconnect between the markets and underlaying assets.

    "Simply put, warns Matt King - as the taper continues - "markets stopped following fundamentals about two years ago." Leaving the question... when does that change?"

    At some point the Fed's smoke and mirrors policy will stop having the desired effect, and when that happens the markets will face the precipice with no one there to artificially prop them up.
    May 8 12:25 PM | 2 Likes Like |Link to Comment
  • Patience Is A Pain [View article]
    Nice post and discussion, Mike. Good to have you back.

    Given the conversation, what do you make of the flattening of the curve and what do you expect will happen in the near future?
    May 6 05:35 PM | 1 Like Like |Link to Comment
  • Forecasting Cold To Continue Into Summer [View article]
    Nice post, Mike. Thanks.
    Jan 8 03:45 PM | 1 Like Like |Link to Comment
  • Artful Dodger [View article]
    Once again, thank you, Mike.
    Dec 20 11:06 PM | Likes Like |Link to Comment
  • Artful Dodger [View article]
    Thank you, Mike.

    I should have written: the 'yield' of the ten year has very briefly rallied..., but then has proceeded to drop. I think you understood that's what I meant.

    I am, and have been for quite some time, short 20+ year treasuries. It has been a bumpy ride but I have maintained the position because I believe it should serve as necessary hedge, especially under current circumstances. Nevertheless, it is a bit unnerving to see yields briefly spike to then collapse, time and again, once the Fed's stimulus programs end. Seeing yields fall again this morning, in spite of good economic news and equities moving higher, I started to wonder if we would see the patterned repeat itself again.

    I still think that being long 20+ year treasuries would be dangerous and being short, instead, is the right position. I am wrong? It is fine to have doubts and I keep on telling myself that I should never be more invested in being right than in making money. But I am wondering whether this could prove to be one of those times.
    Dec 20 04:35 PM | Likes Like |Link to Comment