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Brian Teeney
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A Canadian accountant fighting the good fight.
  • QE Has Been A Waste Of Money

    Let's face it. If I said to you "I'm going to give you a ton of money at near zero interest rates and I won't raise the rate until you create jobs." The last thing you are going to do is create a job. You may remortgage your house and then invest in some stocks or financial engineering, but you are going to milk the cow for as long as possible by not creating jobs.

    It seem Ms. Yallen and the San Francisco Fed agrees. Today they came out with an economic letter which says QE is a waste of time.

    Click on the link and read.....

    www.frbsf.org/economic-research/publications/economic-letter/2013/august/large-scale-asset-purchase-stimulus-interest-rate/

    The conclusion says:

    "Asset purchase programs like QE2 appear to have, at best, moderate effects on economic growth and inflation. Research suggests that the key reason these effects are limited is that bond market segmentation is small. Moreover, the magnitude of LSAP effects depends greatly on expectations for interest rate policy, but those effects are weaker and more uncertain than conventional interest rate policy. This suggests that communication about the beginning of federal funds rate increases will have stronger effects than guidance about the end of asset purchases."

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Aug 12 4:47 PM | Link | Comment!
  • Even Ben Bernanke Doesn't Believe The Government

    The quote that really caught me last night in his question and answer session was "We currently have an unemployment rate of 7.6%, which I think if anything OVERSTATES THE HEALTH OF THE LABOR MARKET."

    So if the stats he his basing his decisions on are wrong, invented, adjusted or just pulled out of the air we are really in trouble.

    Unicorns and rainbows...

    As someone said yesterday. If we take out all the bad news, everything looks pretty good.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jul 11 11:15 AM | Link | Comment!
  • The Only Sure Trade On The VIX? I'm Afraid Not.

    This morning the VIX chart entered potentially exciting territory. The 50 day simple moving average banged into the 200 day moving average and bounced back. As of this writing the 50 day SMA is at 14.98 and the 200 day SMA is at 15.01.

    (click to enlarge)

    In the last 10 years 50 day SMA has crossed above the 200 day SMA seven times. These events occurred in May and October 2005, May 2006, March 2007, September 2008, May 2010, and July 2011.

    If you had bought VXX in July 2011 when the 50 day SMA moved above the 200 you would have bought in the low $20's and been able to sell within a month with more than a double. If you had held to the end of September you could have sold for over $50.

    May 2010 was not as kind. You would have paid around $30 for VXX and if you were lucky you may have broke even. May 2005 was even worse. The 50 crossed the 200 at just over 14, spiked to just over 17.5 within a few days, but then was back under 12 by the end of May.

    What was the difference? In 2011 The 50 crossing above the 200 was a leading indicator. In 2005 and 2010 it occurred after the big move in the VIX occurred. Also, you have to remember that VXX doesn't track the VIX. It tracks a daily rolling long position in first and second month VIX futures. So yes, a spike in the VIX will cause a spike in the VXX. But to get a huge gain in the VXX you have to expect anguish in the markets to last. You can track what the VIX futures are doing on the CBOE website here:

    http://www.cboe.com/micro/vix/vixfuturesprices.aspx

    What would I be looking for? First, the 50 day SMA crossing above the 200 day SMA is a buying indicator. But, unless the VIX futures are seriously heading up as well, I would be looking at short term trading profits.

    Disclosure: I am long UVXY.

    Jun 24 4:17 PM | Link | Comment!
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