Disqus - Latest Comments for indebtwetrust

Re: The Debts of the Lenders: China Allows Short Selling

indebtwetrust — Sun, 17 Jan 2010 22:09:55 -0000

China - or any other market - eclipsing the US in #s of IPOs should not be surprising. We had very few deals in the past 2 years (08 and 09) because of the unprecedented amount of government interference in the equity, bond, and credit markets. Meanwhile, China and the other BRICs did not have such a drastic change.

I believe that any increase in US IPO or especially LBO deal flow is a sign that risk is back among US institutional managers. According to my biglaw corporate attorney contacts, deals are still getting done - just on a slower basis w/a LOT more due diligence being done.

Harp all you want about US d.d. but when was the last time you were able to pull up accurate figures on a China stock?

Re: E-minis

indebtwetrust — Mon, 21 Dec 2009 15:03:41 -0000

Off topic but I saw that Prechter is now bearish on muni bonds. I have to agree w/him for fundamental reasons.

http://commoditybullmarket....

Re: USD trend change: When will it start dragging down the market?

indebtwetrust — Mon, 21 Dec 2009 15:00:18 -0000

I posted this on the SKF msg board. Hope some readers find it useful.

Goldbugs are wrong. Here is further proof why. Severe asset deflation across the board. Please note the fiscal imbalances table.

And for those euro lovers out there, one look at the EU's fiscal health should be enough to send you packing back to the dollar.

http://www.oecd.org/documen...

Re: USD trend change: When will it start dragging down the market?

indebtwetrust — Thu, 17 Dec 2009 15:17:47 -0000

Chinese Central Banker on the Dollar.

"The United States cannot force foreign governments to increase their holdings of Treasuries," Zhu said, according to an audio recording of his remarks. "Double the holdings? It is definitely impossible."

"The U.S. current account deficit is falling as residents' savings increase, so its trade turnover is falling, which means the U.S. is supplying fewer dollars to the rest of the world," he added.

"The world does not have so much money to buy more U.S. Treasuries."

http://finance.yahoo.com/ne...

Re: Chart of the Week: A Month of New Sector Leadership

indebtwetrust — Tue, 15 Dec 2009 14:48:40 -0000

There was an article in last week's Barron's about yield chasers in utility stocks and natural gas MLPs. That could explain the renewed interest in this traditionally underperforming sector.

Re: Looking at the REITS

indebtwetrust — Tue, 15 Dec 2009 11:13:23 -0000

http://shipping.capitallink...

Re: Looking at the REITS

indebtwetrust — Mon, 14 Dec 2009 10:38:41 -0000

Slightly off topic. But I've been looking at the Baltic Dry Index chart which serves as a proxy for commodities health. I'd like to see a return to October levels before going long commodities.

http://www.bloomberg.com/ap...

Re: Looking at the REITS

indebtwetrust — Mon, 14 Dec 2009 10:28:36 -0000

That is true. But the fund managers move in herds too. When enough momentum gets going in 1 direction, there is the potential for the rest to follow.

Re: GOOG update

indebtwetrust — Mon, 14 Dec 2009 10:27:23 -0000

either

Re: Looking at the REITS

indebtwetrust — Sun, 13 Dec 2009 22:00:58 -0000

This rebound is being driven by institutional yield chasers in the West.

These Western yield chasers are the pension funds, endowments, foundations, and insurance companies which are contractually bound by rates of return to the investments they sold (e.g. annuities, charitable gifts, etc). These investment payouts are in turn based on rosy actuarial forecasts that their fund holdings would outperform.

How can their fund managers deliver above market returns when interest rates (treasuries or even municipal - state bonds) are so low? How can they deliver when their contractual obligations require them to take on extra risk? Put another way, fund managers need to find riskier borrowers to earn out-sized yield performances (and out sized fees).

The only way to accomplish this is by taking on more risk in emerging markets, junk bonds, commodities, and other traditionally beta asset classes using A LOT of leverage. Especially after their disastrous losses last year, some fund managers feel like they have something to "prove."

I have long suspected that the easy monetary policy by Western governments was accomplished by the pressure of the fund lobbyists hoping for enough time to restore their balance sheets. If easy money (as measured by bullish Eurodollar futures - see above) continues, then we will see even BIGGER bubbles than before.

Something tells me this won't end nicely.

David Goldman pointed this out back in 2006, here is a link to a recent update.

http://blog.atimes.net/?p=1190

Re: GOOG update

indebtwetrust — Fri, 11 Dec 2009 10:37:51 -0000

I don't touch GOOG anymore. The options are too expensive. Can you run a chart for CME?

Re: What Is Historical Volatility?

indebtwetrust — Tue, 08 Dec 2009 19:22:43 -0000

Thanks. Good information as always.

Re: The trend was your friend….(USD)

indebtwetrust — Tue, 08 Dec 2009 10:17:48 -0000

I know what you mean. I was short the vix since late November but even thought my puts should've been in the money, they have flat to moderately negative drawdowns instead.

Re: Watch that Dollar (weekly)

indebtwetrust — Sun, 06 Dec 2009 22:33:40 -0000

Friday was interesting. We saw big moves in forex but equities and bonds kept their momentum up. Gold however sold off. Watch the implied volatility for GLD and UUP. There are clues to be had there.

Re: Attention: Bernanke says NO ASSET BUBBLE

indebtwetrust — Thu, 03 Dec 2009 17:22:29 -0000

Bernanke = epic fail

Re: Where Is VIX and More Headed?

indebtwetrust — Thu, 03 Dec 2009 15:44:31 -0000

I don't know if adding more math is a good idea. I kind of like the chartist (T/A) approach.

Re: The Debts of the Spenders: When Bad News is Good News at Citi

indebtwetrust — Mon, 30 Nov 2009 17:25:14 -0000

Most mortgages reset in 2010 and 2011 for Alt-As and subprime. I'm banking on an extension of Q.E.

Re: The Debts of the Spenders: EU Picks First Prime Minister

indebtwetrust — Mon, 30 Nov 2009 17:24:21 -0000

thanks those are good pts.

Re: The Debts of the Lenders: China's Garlic Bubble

indebtwetrust — Sun, 29 Nov 2009 21:27:29 -0000

The latest credit bubble follows the same pattern as all the others throughout recent history - easy money provided by the government. In China's case, they could easily remove the formation of bubbles but that would require them to de-peg away from the dollar. The alternative is for the US to strengthen the dollar by taking fiscally sound steps.

Since I believe there is little chance of either event happening the formation of bubbles will continue. Garlic may pop only to be replaced by another.

Re: A Look at Declining Volume on Five Prior Market Tops

indebtwetrust — Wed, 25 Nov 2009 23:13:22 -0000

Very good post. I use tradestation too. Good suite of tools. How come you didn't include 2008 or the 2002-2003 periods?

Re: The Debts of the Spenders: Are CoCos the Answer to Solving Systemic Risk?

indebtwetrust — Mon, 23 Nov 2009 15:04:57 -0000

Thank you for the clarification. I did not know this. And stand corrected!

Re: The Debts of the Spenders: Are CoCos the Answer to Solving Systemic Risk?

indebtwetrust — Sat, 14 Nov 2009 20:01:56 -0000

It's not just Bernanke but also Mervyn King (of the BOE). The UK is also running a quantitative easing program. It's actually pretty interesting b/c Canary Wharf (the wall st of London), has seen a surge in overseas buyouts by wealthy Arabs. That should put a fundamental floor on the value of the CMBS assets held in the UK.

In the US, the maturation of a large number of Alt-As, subprime, and commercial real estate next year will require borrowers to roll their debt. They will be unable to do so if rates rise. That is why money market funds (the saver side of the eurodollar markets) is only paying between .06 - .08%!

I am betting that Bernanke will continue the extension.

Convertible bonds are part of a greater set of assets known as hybrid capital. You may also want to look into the preferred bank shares of UK banks - particularly RBS, HSBC, and a few of the other majors. The time to buy was earlier this year - around March - July actually. You won't gain much in appreciation at current levels (those who bought at those entries have seen gains of 80-100% - remarkable for bonds) but if you're looking to lock in some steady gains in a low interest rate environment then it may be a good idea.

As always, check w/your adviser and tax professionals. No part of this post is an endorsement of any trading activity and exists for Informational purposes only.

Re: The Debts of the Spenders: Are CoCos the Answer to Solving Systemic Risk?

indebtwetrust — Fri, 13 Nov 2009 17:45:44 -0000

white_powder, most of these bonds are listed on the OTC market. That means you need to call a full service broker.

Please note that there is an ongoing debate on whether or not the CoCos satisfy Tier 2 capital (this is more of an issue for European banks than American ones).

But the issues become inter-related due to the nature of the underlying - RMBS, CMBS, CDOs, etc. For the most part, RMBS are easy to standardize. The same cannot be said for CMBS and CDOs.

After all, they are mixed up Frankensteins of diverse loan packages. How does one value an office park vs an industrial park? An amusement park? Why not just make up a value and throw it in the air? (Which is what Lehman and Bear seem to have done).

I suggest questioning your broker about the underlying. For the most part agency bonds are safer - if only b/c Bernanke will keep buying them into March 2010.

Re: The biggest moves happen when you least expect them (GS)

indebtwetrust — Thu, 12 Nov 2009 17:00:09 -0000

Great post - you capture the momentum of the tape beautifully.

Re: The Debts of the Spenders: SPY, Money Flow, and On Balance Volume

indebtwetrust — Sat, 10 Oct 2009 22:43:17 -0000

Here are some key levels to watch:

We have rallied since the July 8 daily low of 870.

Looking further back, important levels to watch include the April 7-8 daily lows at 815, the March 30 daily low at 780, and chart support from mid-March near 766 to 750.

Declines below these levels suggest serious asset deflation and/or fear.

Another asset class to watch is oil - not gold. Oil has been used as a proxy for risk taking even though supply has increased while demand has decreased.

I am going to do a post on Var for different banks later on - especially GS and its position on oil as a risk taking indicator.