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Salmo trutta

Salmo trutta
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  • Don't Raise Rates In Order To Be Able To Cut Them Later [View article]
    Wicksellian natural rate? All such interest rate analyses have long since been denigrated.
    Oct 8, 2015. 11:05 AM | 2 Likes Like |Link to Comment
  • Garcia-Schmidt And Woodford On Neo-Fisherism [View article]
    The effect of forward interest rates guidance, or "of the time for which the interest-rate peg is expected to be maintained", is indirect, varies widely overtime, and in magnitude. What the net expansion of money will be, as a consequence of a given policy rate pegging, or its adjustment, nobody knows until long after the fact. The consequence is a delayed, remote, & approximate control over the lending and money-creating capacity of the banking system.
    Oct 8, 2015. 11:03 AM | 2 Likes Like |Link to Comment
  • A Forward Look [View instapost]

    You should stop trading for a while (you don't understand the rotation). And you ignore basic trading rules (e.g., money management).

    If you enter a trade and it immediately goes against you, chances are you've missed something in your analysis. Holding on, hoping you'll break-even, or get some of your money back, is predominately, a losing proposition.

    Look at the rally off of the Oct 15 2014 DJIA low.{"allowChartStacking"...

    Investors are perhaps, though a little earlier, anticipating another repeat scenario.

    The war in the Middle-east (a Black Swan), and the exchange value of the US dollar are also both influencing stocks and commodities.
    Oct 8, 2015. 10:55 AM | 1 Like Like |Link to Comment
  • A Forward Look [View instapost]
    Money flows are the base-line. Countervailing flows are telling. To expect that nothing affects the roc in M*Vt other than money lags is non-sense.

    Liquidity pressures in currency pairs were at the lowest levels after Lehman's bankruptcy, then, "only late-2010 was worse." 

    BIS: "Continued large US balance of payments deficits were like a huge ATM for the global financial system, providing an abundant supply of USD"

    "As banks' cross-currency funding grew, so did their hedging requirements and FX swap transactions, according to the BIS research."

    "But the freezing up of credit markets from October 2008 after the failure of Lehman Brothers suddenly meant that these banks were unable to roll over their short-term funding positions, requiring the banks to deliver foreign currency and forcing them to sell or liquidate assets earlier than expected. This created a substantial USD funding gap"

    This year's-end could be tumultuous.
    Oct 8, 2015. 10:31 AM | 1 Like Like |Link to Comment
  • The New Fed Operating Framework Explained With Cheese [View article]
    Rate idolatry.
    Oct 8, 2015. 10:17 AM | 4 Likes Like |Link to Comment
  • A Forward Look [View instapost]
    August until October this year will be less of a change than in 2014. You have to extrapolate this years #s. Then the stock slide from China's contraction, funding exodus, and currency re-provisioning, made US stocks more attractive after the sell off. August 11's PBOC anouncement definitely changed the seasonal pattern.
    Oct 7, 2015. 04:55 PM | 2 Likes Like |Link to Comment
  • A Forward Look [View instapost]
    You can get a geek in a couple of hours for software and minor hardware repairs and upgrades (runs about $100). I've used this guy for 15 years. One closer to me took 2 and 3 weeks, then moved, then went belly up. Another charged me 3x what this guy, who only works 1/2 day, to do. He doesn't have a phone # listed and never called me. So I just headed the other direction every day to play craps.

    I installed my first memory upgrade in 81. And I don't use my hard drive anymore because of hackers. I took a PC repair class and graduated 1st in the class (12 hours of credit). But I don't have the tools to debug the links.
    Oct 7, 2015. 04:46 PM | 1 Like Like |Link to Comment
  • A Forward Look [View instapost]
    Yup, got a recession 1st qtr of 2011 and a negative CPI print the last qtr of 2010.
    Oct 7, 2015. 04:38 PM | 1 Like Like |Link to Comment
  • A Forward Look [View instapost]
    "other things neutral"

    The outflow of funds from China still hasn't been quantified. It takes the IMF years to put together their figures and their publications.

    Compare the y-o-y data (2014 to 2015).
    Oct 7, 2015. 04:36 PM | 1 Like Like |Link to Comment
  • A Forward Look [View instapost]
    (1) Other Central banks are pumping while the Fed is tightening. (2) Long-term money flows will contract regardless.

    Commodities and the dollar have an inverse relationship - PPP, or purchasing power parity. Lower U.S. growth (and interest rate differentials), temporarily, decreases our exchange rate.

    Some money flow lags are deflected by other economic agents. These are largely short-term offsets. There's some extra seasonal demand at this time of the year, but considering the extent of the deceleration, it won't change the trading opportunity.
    Oct 7, 2015. 04:29 PM | 1 Like Like |Link to Comment
  • 'Don't Bother Me With Facts, My Model Tells Me Everything I Need To Know' [View article]
    "So I am not sure this would destroy money"

    An increase in bank capital accounts destroys the money stock releasing excess reserves. That's one reason why the FED's QE was inadequate (due to the massive countercyclical increase in bank capital requirements coming out of the GR).
    Oct 7, 2015. 04:19 PM | 1 Like Like |Link to Comment
  • 'Don't Bother Me With Facts, My Model Tells Me Everything I Need To Know' [View article]
    Leakage? No. Money flowing through the NBs never leaves the CB system.

    Reserve balances are indeed lent & redistributed (shifted among different member banks, or primary deposits to the recipient bank, and or re-deposited within the same bank, or derivative deposits), within the System (changing their composition, RRs vs. ERs). I.e., there is reserve velocity as the commercial banks need clearing balances just to operate.

    In the context of their lending operations it is only possible to reduce bank assets, and deposits, by retiring bank-held loans, e.g., for the saver-holder to use his funds for the payment of a bank loan, interest ona bank loan for the payment of a bank service, or for the purchase from their banks of any type of commercial bank security obligation, e.g., banks stocks, debentures, etc.

    See current unusual contraction:

    Of course, if the Fed didn't offset the expansion of currency(which has been up ever since 1930), with concurrent expansions of Reserve Bank credit, this would decrease IBDDs. Also, foreign currency conversion, e.g., repatriating funds, or FX reserves, etc., would reduce IBDDs.
    Oct 6, 2015. 12:53 PM | 2 Likes Like |Link to Comment
  • Bernanke On NGDP Targeting [View article]
    Inflation doesn't vary much for very long, not even during recessions. We get re-flation faster than re-employment. But R-gDp is more volatile. So to cap R-gDp, by targeting N-gDp, simply increases the output-gap. And if economists can't target R-gDp, they should get a new job.
    Oct 6, 2015. 12:28 PM | 1 Like Like |Link to Comment
  • A Forward Look [View instapost]
    And Quin, my laptop was in the repair shop for almost 2 months. First they said I didn't properly turn off my PC and that was draining my battery. Then when it failed again, they had to replace a memory card (it isn't even 1 year old), etc.
    Oct 6, 2015. 12:20 PM | 1 Like Like |Link to Comment
  • A Forward Look [View instapost]
    "stocks should be sold at September's month-end"

    That's before China's currency realignment.

    Sorry I didn't have your phone #. Things changed since that post. I called my old man and told him to sell his oil stocks in June. I called my brother and sisters and told them to sell stocks then too. Otherwise, I've given no direct advice.

    I told you the trades I made last time. I made no updates nor any fine tuning this time. I don't watch everything, esp. foreign markets. And I lost interest.

    I made my last updates to the monetary numbers from FRED on 7/20/15.

    The current rotation suggests short-term strength. The DJIA is up 40 today. Yesterday and Friday it was up substantially.

    Momentum should start to fall towards the next inflection point on the 15th. So if I was going to be in the market a week or so I'd draw a line under the current up-move and sell if it breaks - then exit going into the turn. But I stopped day-trading decades ago.

    I played IBMs 4th qtr. earnings for years. I never watched what the stock did before Dec. I haven't picked a candidate for Nov.
    Oct 6, 2015. 12:04 PM | 2 Likes Like |Link to Comment