Kyle Bass: Central Bankers Are Building Potemkin Villages To Deceive Us [View article]
Bbro would like to hear your thoughts about today's bloodbath in Japanese equities.
Is there anyone in this world who has a perfect prediction record. Heck, I can point to Warren Buffet and find some fault with some of his investments as well. Paulson et all was wrong as well until they got it right. As usual the key is the expectations no i.e. how much will you bet getting when you are right and vice versa.
Equity futures turn sharply lower overnight, possibly in reaction to weak manufacturing data out of China and a mini-crash in Japan that left the Topix -6.9%. Factory activity in China shrunk for the first time in 7 months, reflecting "slower domestic demand and ongoing external headwinds." S&P futures currently -1.1% to 1637.50 after dropping below 1634 when European markets first opened. [View news story]
I was going to sell my call options yesterday but no I had to get greedy. Oh well, I managed to get a ton of UVXY on the cheap though precisely to cater to this scenario. But .... they'll probably repress volatility as well ......
Bernanke: Stocks continue with solid gains as the chairman suggests the Fed may never sell the massive assets it's accumulated, instead just letting them roll down. Most interesting are Treasury prices (TLT -1.1%) rolling over - the 10-year yield sunk to 1.89% as Bernanke's soft comments hit the tape, but has reversed to now threaten 2%. Gold (GLD +0.6%) has given up much of its knee-jerk gains, and the dollar (UUP +0.3%) is having none of it, higher across the board, particularly vs. the aussie (FXA -1.1%), yen (FXY -1%), and loonie (FXC -0.6%). [View news story]
That's why I've been laughing at people who have said that QE will be pulled someday. Ladies and Gents!!! We've found the ultimate recipe of prosperity and it's called QE. Jamie Dimon for President!!! With him and Bernanke at the helm, we've be derivating each other until we reach a gazillion dollar in derivatives.
Stocks post early gains with the Dow +0.4% and outperforming the other major indexes thanks to nice gains in Home Depot (2.7%) post-earnings, and JPMorgan (2%) as Jamie Dimon looks set to keep both of his jobs. [View news story]
Jamie Dimon for president, I bet the Dow will go to 36000. I promise. Heck with him and Bernanke, they can create the first gazillion derivatives market.
The yen (FXY -0.9%) legs down to a new multi-year low - the dollar now buying ¥103.24 - continuing a truly remarkable move since late last year. It's an instance where politicians told you they were going to devalue, every trader and strategist around told you they were shorting the yen, and sure enough the yen went down ... hard, and in as straight of a line as markets ever allow. Ah, if it were always that easy. Other ETFs: JYN, YCL, YCN. [View news story]
Well, wouldn't that trade only work well if Gold is going up together with the dollar?
The Nikkei (EWJ, DXJ) soared another 2.3% overnight to top 15K for the first time since 2007 as the yen (FXY) slid 0.3% to a new multi-year low of ¥102.65. Leading was Sony (SNE), up 10% following Dan Loeb's push for a breakup. Toyota (TM) paced the exporters with a 3.7% gain. JGBs (JGBL) were calm, the yield on the 10-year flat at 0.86%. [View news story]
Don't argue with the tape. This year I am up big on my short Yen and long Nikkei option trades. In the long run, the Nikkei is worth crap at this once great nation's current trajectory, but in the meantime ....
Stocks appear set to open the week with losses as S&P 500 (SPY) and Nasdaq 100 (QQQ) futures slide -0.4%. Ex-Japan, Asia lost ground overnight and Europe's posting moderate losses, though Italy's IBEX 35 is off a more substantial 1.3%. [View news story]
I'd be shocked if the market does not end up green.
The stronger dollar has precious metals resuming their decline in force (or is the decline in precious metals strengthening the dollar), with gold (GLD) off 2.3% and silver (SLV) off 2.2%. Crude oil (USO) pulls back a bit from its recent big rally, -0.9% to $95.53. [View news story]
I am willing to bet the winnings in my Yen trade so far that the Japanese central bank is up to its old trick. But don't fight the trend, buy some put options. I am long physical, but I relish every opportunity to short the paper version.
For the first time since April of 2009, the yen (FXY) fell through the 100-level against the dollar, helping the Nikkei rally nearly 3% on the session and almost 7% on the week. Japanese equities (EWJ) are now trading at levels last seen in January of 2008. Japanese capital flows data finally showed what many had been waiting for since BOJ Governor Kuroda's shot across the bow at deflation: an outflow, as Japanese investors became net buyers of foreign bonds. [View news story]
Go go Power Rangers!!! Oh wait, I don't think that's a Japanese series, but whatever.
With Europe's Economy In The Tank, Why Is The Euro So Strong? [View article]
In strange times, I love conspiracy theories, so here's my theory: a bunch of people are forcing up the Euro while buying options betting on the Euro breakup. The higher the Euro goes, the worse all the economies get, thereby making the breakup inevitable. Otherwise the Euro will just floats down slowly, and with the help of improving exports, the game may very well get extended for a while.
There's a "real chance" Jamie Dimon (JPM +1%) may have to drop his dual chairman and CEO roles, according to sources at the bank, reports Charlie Gasparino, lamenting what he calls a politically-based attack. The key may end up being BlackRock - a major shareholder whose CEO Larry Fink also happens to be chairman. Fink, however, has his eye on the Treasury Secretary's office and may "throw Dimon under the bus" to advance that goal. [View news story]
I am not a fan of either one but I don't think Fink is a rubber stamper either. I've heard him said that QE beyond no 2 is "highly disturbing".
IShares' Malaysia ETF (EWM) will be on watch in the coming week as the country goes to the polls Sunday in a pivotal election. Opposition leader Anwar Ibrahim, promises a mix of "a market economy and Occupy Wall Street" if elected, a partial reference to his pledge to break the link between UMNO and business magnates. Meanwhile, Prime Minister Najib Razak has record stock prices (I, II, III), robust economic growth, 56 years of political tradition, and ~$3.6B in cash handouts on his side. If elected, he promises more free money — cash, as they say, is king. [View news story]
Don't look now, but this country's debt to gdp is not exactly on the safe side (Rogoff, et all non withstanding), and no matter who wins, that number is going up because well both sides have promised more free moolah.
European stocks and the euro - after some gyrations - are above their levels from just before the ECB rate cut. The Stoxx 50 (FEZ) +0.4%, led by Spain (EWP) +0.7%. ECB President Draghi's press conference is at 8:30 ET where he may (or may not) detail other easing measures, such as an easing in collateral requirements. S&P 500 futures add to gains, +0.5%. [View news story]
Kyle Bass: Central Bankers Are Building Potemkin Villages To Deceive Us [View article]
Is there anyone in this world who has a perfect prediction record. Heck, I can point to Warren Buffet and find some fault with some of his investments as well. Paulson et all was wrong as well until they got it right. As usual the key is the expectations no i.e. how much will you bet getting when you are right and vice versa.
Equity futures turn sharply lower overnight, possibly in reaction to weak manufacturing data out of China and a mini-crash in Japan that left the Topix -6.9%. Factory activity in China shrunk for the first time in 7 months, reflecting "slower domestic demand and ongoing external headwinds." S&P futures currently -1.1% to 1637.50 after dropping below 1634 when European markets first opened. [View news story]
Bernanke: Stocks continue with solid gains as the chairman suggests the Fed may never sell the massive assets it's accumulated, instead just letting them roll down. Most interesting are Treasury prices (TLT -1.1%) rolling over - the 10-year yield sunk to 1.89% as Bernanke's soft comments hit the tape, but has reversed to now threaten 2%. Gold (GLD +0.6%) has given up much of its knee-jerk gains, and the dollar (UUP +0.3%) is having none of it, higher across the board, particularly vs. the aussie (FXA -1.1%), yen (FXY -1%), and loonie (FXC -0.6%). [View news story]
With him and Bernanke at the helm, we've be derivating each other until we reach a gazillion dollar in derivatives.
Stocks post early gains with the Dow +0.4% and outperforming the other major indexes thanks to nice gains in Home Depot (2.7%) post-earnings, and JPMorgan (2%) as Jamie Dimon looks set to keep both of his jobs. [View news story]
Heck with him and Bernanke, they can create the first gazillion derivatives market.
The yen (FXY -0.9%) legs down to a new multi-year low - the dollar now buying ¥103.24 - continuing a truly remarkable move since late last year. It's an instance where politicians told you they were going to devalue, every trader and strategist around told you they were shorting the yen, and sure enough the yen went down ... hard, and in as straight of a line as markets ever allow. Ah, if it were always that easy. Other ETFs: JYN, YCL, YCN. [View news story]
April Industrial Production: -0.5% vs. -0.2% expected, +0.4% prior. Capacity utilization 77.8% vs. 78.3% consensus; 78.5% prior. [View news story]
The Nikkei (EWJ, DXJ) soared another 2.3% overnight to top 15K for the first time since 2007 as the yen (FXY) slid 0.3% to a new multi-year low of ¥102.65. Leading was Sony (SNE), up 10% following Dan Loeb's push for a breakup. Toyota (TM) paced the exporters with a 3.7% gain. JGBs (JGBL) were calm, the yield on the 10-year flat at 0.86%. [View news story]
Stocks appear set to open the week with losses as S&P 500 (SPY) and Nasdaq 100 (QQQ) futures slide -0.4%. Ex-Japan, Asia lost ground overnight and Europe's posting moderate losses, though Italy's IBEX 35 is off a more substantial 1.3%. [View news story]
The stronger dollar has precious metals resuming their decline in force (or is the decline in precious metals strengthening the dollar), with gold (GLD) off 2.3% and silver (SLV) off 2.2%. Crude oil (USO) pulls back a bit from its recent big rally, -0.9% to $95.53. [View news story]
For the first time since April of 2009, the yen (FXY) fell through the 100-level against the dollar, helping the Nikkei rally nearly 3% on the session and almost 7% on the week. Japanese equities (EWJ) are now trading at levels last seen in January of 2008. Japanese capital flows data finally showed what many had been waiting for since BOJ Governor Kuroda's shot across the bow at deflation: an outflow, as Japanese investors became net buyers of foreign bonds. [View news story]
With Europe's Economy In The Tank, Why Is The Euro So Strong? [View article]
There's a "real chance" Jamie Dimon (JPM +1%) may have to drop his dual chairman and CEO roles, according to sources at the bank, reports Charlie Gasparino, lamenting what he calls a politically-based attack. The key may end up being BlackRock - a major shareholder whose CEO Larry Fink also happens to be chairman. Fink, however, has his eye on the Treasury Secretary's office and may "throw Dimon under the bus" to advance that goal. [View news story]
Good show regardless.
IShares' Malaysia ETF (EWM) will be on watch in the coming week as the country goes to the polls Sunday in a pivotal election. Opposition leader Anwar Ibrahim, promises a mix of "a market economy and Occupy Wall Street" if elected, a partial reference to his pledge to break the link between UMNO and business magnates. Meanwhile, Prime Minister Najib Razak has record stock prices (I, II, III), robust economic growth, 56 years of political tradition, and ~$3.6B in cash handouts on his side. If elected, he promises more free money — cash, as they say, is king. [View news story]
European stocks and the euro - after some gyrations - are above their levels from just before the ECB rate cut. The Stoxx 50 (FEZ) +0.4%, led by Spain (EWP) +0.7%. ECB President Draghi's press conference is at 8:30 ET where he may (or may not) detail other easing measures, such as an easing in collateral requirements. S&P 500 futures add to gains, +0.5%. [View news story]
Facebook's Current Price Is Unsustainable [View article]