Seeking Alpha

GaltMachine

GaltMachine
Send Message
View as an RSS Feed
View GaltMachine's Comments BY TICKER:
Latest  |  Highest rated
  • Richard Barley has a kind word for bonds (currently in the midst of a savage sell-off), saying the global growth outlook continues to be dismal despite the Fed and ECB. Could the curve get steeper still? Sure, but the date of any increase in short rates keeps getting pushed further into the future, which should help anchor the long end. [View news story]
    It is literally amazing that the policy of QEfinity whose stated purpose is to lower long-term rates has had exactly the opposite results since the announcement yesterday especially compared to a month ago. WTF?

    Is the FED trying to trigger a bond selloff?
    Sep 14 11:39 AM | Likes Like |Link to Comment
  • Something's up in the Spanish bond market, where yields are shooting higher, the 2-year +24 bps to 3.19%, the 10-year +18 bps to 5.81%. ECB bond purchases won't begin until Spain submits to a bailout, and Spain won't submit to a bailout as long as bond yields remain contained, ergo, another peripheral bond panic almost certainly lies ahead. [View news story]
    In the immortal words of Charlton Heston from "The Planet of the Apes":

    http://imdb.to/QYP6IX
    [last lines]
    George Taylor: Oh my God. I'm back. I'm home. All the time, it was... We finally really did it.
    [screaming]
    George Taylor: You Maniacs! You blew it up! Ah, damn you! God damn you all to hell!

    I miss Charlton :)
    Sep 14 11:33 AM | Likes Like |Link to Comment
  • Something's up in the Spanish bond market, where yields are shooting higher, the 2-year +24 bps to 3.19%, the 10-year +18 bps to 5.81%. ECB bond purchases won't begin until Spain submits to a bailout, and Spain won't submit to a bailout as long as bond yields remain contained, ergo, another peripheral bond panic almost certainly lies ahead. [View news story]
    The FED has removed all risk from the world. There is nothing to see here.
    Sep 14 11:18 AM | Likes Like |Link to Comment
  • Aug Consumer Price Index: +0.6% in-line with consensus, 0.0% prior. Core CPI +0.1% vs. +0.2% expected, +0.1% prior. [View news story]
    bbro,

    This core CPI calculation is bs.

    Anybody that shops for food or buys gas, knows that the prices of those necessities has risen precipitously over the past year and the past 4 years.

    Just take a look at a basket of staples: milk, eggs, bacon, orange juice, bread, steak, etc. The price increases are staggering and I shop at BJ's which always does it best to keep prices at the lowest possible level.

    The problem with CPI calculations based upon hedonics is that they ignore the real-world experience of the 90% people who aren't rich.

    If prices don't increase from their currently elevated levels we will have no inflation in the future according to the calculation but lo and behold everything is way more expensive than it used to be while incomes have fallen or remained stagnant. This is nonsensical.

    God forbid they fall again to their prior levels because that would be deflationary and cause the FED to go into further "panic" despite the fact the general welfare of the people would improve.

    I am not an inflationista, rather like the FED I believe deflation is still our biggest risk but what we are getting now is the worst of both worlds: rising food and energy prices combined with declining/stagnant incomes.

    Who knew the President was a big believer in trickle down economics (the "wealth effect")?

    This is in part why economics is the dismal science.
    Sep 14 11:01 AM | 4 Likes Like |Link to Comment
  • Aug Industrial Production: -1.2% vs. -0.1% expected, +0.5% prior (revised). Capacity utilization 78.2% vs. 79.2% expected. [View news story]
    bbro,

    Not talking about recession just "softening" which is what this is showing isn't it?

    Given where we are at the present rate of growth a "pause" in manufacturing growth is not a positive for the future. I don't believe that that's an ideological statement.
    Sep 14 10:50 AM | Likes Like |Link to Comment
  • The ECRI Weekly Leading Index rises to 124.9 for the week ended Sept 7 from 124.1 previously (revised from 123.7). The annual growth rate rises to 2.1% from 1.4%. It's the highest level since August 2011 and one wonders if Lakshman Achuthan is pulling his recession call. [View news story]
    No he hasn't which is actually quite amazing. Here's his latest defense of their call:

    http://bit.ly/SHRXXM

    "Some believe that our own Weekly Leading Index contradicts our U.S. recession call. This is not the first time that charge has been made. Recall that, a couple of years ago, people said that its movements guaranteed a double-dip recession. At the time we flatly and correctly rejected that interpretation. Today we can tell you that the Weekly Leading Index is not pointing to recovery and, more importantly, this is also the message from our full array of leading indexes."
    Sep 14 10:46 AM | Likes Like |Link to Comment
  • The 1.2% dive in industrial production is the biggest decline since the depths of the financial crisis, though 0.3% of the fall is being attributed to Hurricane Isaac. S&P futures add a bit to gains, now +0.3% - maybe in hope the Fed will double QE to $80B/month? [View news story]
    So apparently the genius forecasters that come up with these consensus numbers which are supposed to be based upon the whole universe of data, missed the fact that there was a hurricane last month when they came up with their original forecast?

    Really. Come on.
    Sep 14 09:55 AM | Likes Like |Link to Comment
  • Aug Industrial Production: -1.2% vs. -0.1% expected, +0.5% prior (revised). Capacity utilization 78.2% vs. 79.2% expected. [View news story]
    bbro,

    I know you like to look at the bright side but isn't this a pretty horrible report?

    With a fall of this magnitude, I suspect the revisions will be even worse. It's all blamed on the hurricane so apparently we are back to blaming weather again for these "unexpected" declines.

    Rising inventories and falling demand are not a good combination for an economy.
    Sep 14 09:43 AM | Likes Like |Link to Comment
  • Aug Consumer Price Index: +0.6% in-line with consensus, 0.0% prior. Core CPI +0.1% vs. +0.2% expected, +0.1% prior. [View news story]
    We don't eat or drive core inflation.
    Sep 14 08:41 AM | 2 Likes Like |Link to Comment
  • 3 Reasons The Fed Should Hold Off On QE3 This Week [View article]
    Well if there was no reason to buy a house now, there is even less reason to buy a house now if you expect interest rates to fall even further. We really are in the liquidity trap as per Irving Fisher.
    Sep 13 03:40 PM | Likes Like |Link to Comment
  • Cliff Diving: Will Congress And The President Destroy The U.S. Economy? [View article]
    benny,

    Sorry Obamabot I thought I was communicating with a rational being :)
    Sep 13 01:55 PM | 4 Likes Like |Link to Comment
  • Cliff Diving: Will Congress And The President Destroy The U.S. Economy? [View article]
    Benny,

    So many to choose from, how about this:

    http://abcn.ws/RUxj42
    "President Obama: On all these issues, but particularly missile defense, this, this can be solved but it’s important for him to give me space.
    President Medvedev: Yeah, I understand. I understand your message about space. Space for you…
    President Obama: This is my last election. After my election I have more flexibility.
    President Medvedev: I understand. I will transmit this information to Vladimir."
    Sep 13 01:33 PM | 5 Likes Like |Link to Comment
  • DJIA +0.7%, adding to gains following the QE3 announcement. The big move comes in Treasurys, the long bond diving nearly two full points in price. The dollar slides a bit further against the major currencies. [View news story]
    So interest rates rise on the announcement of QE3 whose purpose was to lower interest rates?

    What a pathetic decision.
    Sep 13 01:13 PM | Likes Like |Link to Comment
  • A rule banning large-size sugary drinks at New York City restaurants and eateries gains approval with the Board of Health. Though movie theaters will fall under the new plan limiting sodas to 16 ounces or less, it's anything goes at supermarkets or convenience stores. Beverage companies such as KO, PEP, MNST, COT, DPS aren't expecting to take a significant hit over the NYC ban, but would just as soon the issue keep to the Big Apple. [View news story]
    Is there an exemption for diet soda? club soda?

    Glad to see that Bloomberg finally got his number 1 legislative priority completed. Now he can back to focusing on putting windmills on the top of every building in NY.

    Forced breastfeeding, no salt, soda bans, seriously is this guy as whacked out as he seems?
    Sep 13 12:56 PM | 2 Likes Like |Link to Comment
  • FOMC Announcement: QE3 is on to the tune of an open-ended pledge to buy $40B in MBS per month. The pledge to keep rates extraordinarily low is extended until mid-2015. [View news story]
    Personally I think this is shameful. What a joke our economy has become - Amerika is not far off. Interest rates aren't low enough already?

    "To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

    "In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015."
    Sep 13 12:36 PM | 8 Likes Like |Link to Comment
COMMENTS STATS
1,140 Comments
1,505 Likes