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  1. #8276
    Join Date
    Aug 2004
    Location
    New Haven Line heading north
    Posts
    2,702
    Charlie, here comes the deuce. And when you speak of me, speak well.

  2. #8277
    Join Date
    Dec 2012
    Posts
    9,279
    And it all works until it doesn't.
    "timberridge is terminally vapid" -- a fortune cookie in Yueyang

  3. #8278
    Join Date
    Sep 2001
    Location
    The Cone of Uncertainty
    Posts
    46,998
    I took that as pretty much his point.

  4. #8279
    Join Date
    Dec 2012
    Posts
    9,279
    So did I. I can't believe we all agree on something in TGR.

    You gotta pay for the talcum powder up the hoo-hoo lawsuits some way.
    "timberridge is terminally vapid" -- a fortune cookie in Yueyang

  5. #8280
    Join Date
    Dec 2008
    Location
    PDX
    Posts
    2,345
    This is fine. https://www.zerohedge.com/markets/fe...ol-rates-again

    Sent from my Pixel 3 XL using TGR Forums mobile app

    ...Oh, and for those wondering why the Fed did a repo, the answer is simple: it did not want to launch QE just yet. But make no mistake, once repo is insufficient, the Fed will have no choice but to escalate to the next step which is open market purchases.

    Which brings us to the bigger question of how long such overnight repos will satisfy the market, and how long before the next repo rate spike prompts the Fed to do the inevitable, and restart QE.

    At least president Trump will be delighted...

  6. #8281
    Join Date
    Dec 2008
    Location
    Posts
    5,131
    Thing is, Fed has a lot of options to sustain liquidity in certain markets. They can buy ES futures outright if things get really bad. From my perspective the equity markets are controlled by futures, which are controlled by rolling gamma exposure (https://twitter.com/SqueezeMetrics/with_replies). As long as gamma is positive it will collar the ES/RTY/NQ/YM futures, which will drive SPY & the overall equity complex.

    Repo inversion above FFR (I think that's the calc., could be wrong) just means large financial institutions pay a tax on daily liquidity. Not something that will trigger bankruptcies overnight but just drain liquidity from those firms via losses on daily liquidity maintenance. So if the Fed takes a week or whatever but eventually sets up a standing repo facility it will largely cure that problem.

    The broader issue is that, at max employment & near all time equity highs, the base infrastructure of the financial system is groaning under the weight of high leverage amid paltry liquidity/risk appetite. A core principle of the Austrians & more conservative economists out there is that sustained high leverage like we have now is a proy for exceptionally high fragility & susceptibility to Keynes' famed deflationary debt spiral. Think of it as variability in a random walk in a field (no biggie) vs at the edge of a cliff (requires obsessive risk mgmt).

    some non-ZH press

    https://finance.yahoo.com/news/chaot...160538207.html
    https://www.cnn.com/2019/09/17/busin...fed/index.html

  7. #8282
    Join Date
    Feb 2007
    Location
    righthere/rightnow
    Posts
    2,340

  8. #8283
    Join Date
    Oct 2003
    Location
    Portland, OR, U.S.A.
    Posts
    2,529
    Quote Originally Posted by Bromontane View Post
    Thing is, Fed has a lot of options to sustain liquidity in certain markets. They can buy ES futures outright if things get really bad. From my perspective the equity markets are controlled by futures, which are controlled by rolling gamma exposure (https://twitter.com/SqueezeMetrics/with_replies). As long as gamma is positive it will collar the ES/RTY/NQ/YM futures, which will drive SPY & the overall equity complex.

    Repo inversion above FFR (I think that's the calc., could be wrong) just means large financial institutions pay a tax on daily liquidity. Not something that will trigger bankruptcies overnight but just drain liquidity from those firms via losses on daily liquidity maintenance. So if the Fed takes a week or whatever but eventually sets up a standing repo facility it will largely cure that problem.

    The broader issue is that, at max employment & near all time equity highs, the base infrastructure of the financial system is groaning under the weight of high leverage amid paltry liquidity/risk appetite. A core principle of the Austrians & more conservative economists out there is that sustained high leverage like we have now is a proy for exceptionally high fragility & susceptibility to Keynes' famed deflationary debt spiral. Think of it as variability in a random walk in a field (no biggie) vs at the edge of a cliff (requires obsessive risk mgmt).

    some non-ZH press

    https://finance.yahoo.com/news/chaot...160538207.html
    https://www.cnn.com/2019/09/17/busin...fed/index.html
    This helped me understand a lot, after I read the linked articles.
    another Handsome Boy graduate

  9. #8284
    Join Date
    Dec 2008
    Location
    PDX
    Posts
    2,345
    Quote Originally Posted by Platinum Pete View Post
    This helped me understand a lot, after I read the linked articles.
    Try this read.

    https://twitter.com/allenf32/status/...302523904?s=19

    Sent from my Pixel 3 XL using TGR Forums mobile app

  10. #8285
    Join Date
    Nov 2005
    Location
    Down In A Hole, Up in the Sky
    Posts
    25,190
    That’s it, I’m selling all of the real estate and going short on cocaine manufacturing futures.
    StokePimpin' ain't easy

  11. #8286
    Join Date
    Sep 2006
    Posts
    2,880
    Quote Originally Posted by rideit View Post
    That’s it, I’m selling all of the real estate and going short on cocaine manufacturing futures.
    I would go long CBD, and also on synthetic oxy, with a dash of fentanyl as a hedge.
    "We don't beat the reaper by living longer, we beat the reaper by living well and living fully." - Randy Pausch

  12. #8287
    Join Date
    Mar 2006
    Posts
    14,843
    Something gotta give. Typically break higher:

    Last 6 days of $SPX closes since the ECB cut rates and now that the Fed has cut again:

    3006.71
    3005.70
    2997.96
    3007.39
    3009.57
    3000.93


    Sent from my iPhone using TGR Forums

  13. #8288
    Join Date
    Dec 2016
    Location
    In a van... down by the river
    Posts
    3,922
    Quote Originally Posted by Toadman View Post
    I would go long CBD, and also on synthetic oxy, with a dash of fentanyl as a hedge.
    Don't forget some Bitcoin! It's also part of a well balanced breakf^H^H^H^H^H^Hportfolio!

  14. #8289
    Join Date
    Apr 2010
    Posts
    423
    Quote Originally Posted by PassTheDutchie View Post
    Where would one park a ton of cash? MM? CDs? Savings?
    Fuck it, I parked it in a boat. I doubt I'll miss the $ when I'm 80 and eating pureed carrots.

    Sent from my SM-N950U using Tapatalk

  15. #8290
    Join Date
    Oct 2003
    Location
    9,300ft
    Posts
    17,723
    Quote Originally Posted by 4matic View Post
    Something gotta give. Typically break higher:

    Last 6 days of $SPX closes since the ECB cut rates and now that the Fed has cut again:

    3006.71
    3005.70
    2997.96
    3007.39
    3009.57
    3000.93
    If you push the gas and get no extra vroom when you are already going vroom, then don't keep pushing.

    I'm worried that if things shit the bed, there is less room to push the gas.
    Quote Originally Posted by blurred
    skiing is hiking all day so that you can ski on shitty gear for 5 minutes.

  16. #8291
    Join Date
    Dec 2016
    Location
    In a van... down by the river
    Posts
    3,922
    Quote Originally Posted by VTeton View Post
    Fuck it, I parked it in a boat. I doubt I'll miss the $ when I'm 80 and eating pureed carrots.
    Attachment 294560

  17. #8292
    Join Date
    Dec 2008
    Location
    PDX
    Posts
    2,345
    Quote Originally Posted by skaredshtles View Post
    Don't forget some Bitcoin! It's also part of a well balanced breakf^H^H^H^H^H^Hportfolio!
    Wrong thread, JONG!

    Sent from my Pixel 3 XL using TGR Forums mobile app

  18. #8293
    Join Date
    Mar 2006
    Posts
    14,843
    Good (for me) to see rates move lower after fed meeting. It won’t take much to retest the previous lows in treasury. I don’t have an exit plan yet..


    Sent from my iPhone using TGR Forums

  19. #8294
    Join Date
    Mar 2006
    Posts
    14,843
    Down 8% yoy:

    The Fidelity Contrafund (FCNTX) is the largest actively managed mutual fund in the world, with more than $134 billion in assets under management (AUM) as of Oct.19, 2018. It is among the most widely held funds by 401(k) plans and other retirement plans.

  20. #8295
    Join Date
    Nov 2005
    Location
    Down In A Hole, Up in the Sky
    Posts
    25,190
    Uh oh...this along with yield inversions is not a good sign

    https://mobile.reuters.com/article/amp/idUSKBN1W91XJ
    StokePimpin' ain't easy

  21. #8296
    Join Date
    Mar 2006
    Posts
    14,843
    Consumer is always the last to go. Good day for bonds

  22. #8297
    Join Date
    Apr 2006
    Posts
    1,654
    do what charlie says.

    (notice how he is in the center, and the last to speak)

    c'mon now


  23. #8298
    Join Date
    Nov 2005
    Location
    Down In A Hole, Up in the Sky
    Posts
    25,190

  24. #8299
    Join Date
    Nov 2005
    Location
    Down In A Hole, Up in the Sky
    Posts
    25,190
    StokePimpin' ain't easy

  25. #8300
    Join Date
    Dec 2008
    Location
    Posts
    5,131
    I <3 Caitlin. She's sharper on the mechanics of this stuff than most hedge fund managers yet has none of the ego baggage.

    https://www.forbes.com/sites/caitlin.../#1f44b7087caa

    The closest I’ve heard a financial regulator speak publicly of this is former CFTC Chairman Chris Giancarlo, to his credit, when he answered a question after a 2016 speech:

    “At the heart of the financial crisis, perhaps the most critical element was the lack of visibility into the counterparty credit exposure of one major financial institution to another. Probably the most glaring omission that needed to be addressed was that lack of visibility, and here we are in 2016 and we still don’t have it.”

    This is why the FT’s interview with Williams was so extraordinary. It’s as close as a regulator will come to admitting the reality that the system doesn’t work the way most of us think it does and that the Fed may not even understand critical things about it. Specifically, the Fed’s focus on the fed funds market is misplaced because the real action is in the much bigger, much more global repo market; the Fed shouldn’t have allowed America’s big banks to pay dividends or buy back stock when they’re so capital-constrained that they can’t even pick up an 8% “risk-free” arbitrage; the Fed’s proclamation that “the financial system remains resilient,” when it released the results of the most recent bank stress tests in June 2019, strains credulity; a staggering amount of US dollar liabilities have been issued offshore in recent decades and the Fed not only doesn’t control them but can’t measure them with any degree of accuracy; and banks’ financial statements don’t accurately reflect their financial health. No one really knows how solvent (insolvent?) the financial system is.

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