In the past two weeks, we have seen an explosion of research debating the future exit strategies. I have my personal opinion. However, it is an evolving creature and for the sake of clarity, I prefer to defer its exposition until further developments prove me right or wrong. In the meantime, we are going to witness volatility in the forex markets, on benchmark curves (today we saw an important steepening move in Treasuries), in swaps and agency debt while gold should quietly strengthen.
Please, click here to read this article in pdf format: october-1-2009
Yesterday’s session was full of noise. On the surface, we had the backward-looking macro data releases: MBA weekly Mortgage Applications at -2.8% vs. 12.8% (neutral in my view), the ADP Employment change at -254,000 vs. -200,000 consensus (positive), GDP QoQ annualized at -0.7% vs. -1.2% consensus (positive), personal consumption at -0.9% vs. -1% consensus (positive), Chicago Purchasing Manager at 46.1 vs. 52 consensus (negative). Thus, early in the session, we were in risk-taking mood. On top of this, the Department of Energy’s weekly release of inventory data showed that gasoline inventories had fallen by 1.66 million barrels, while the market was expecting an increase of about a million. Oil, on the news, hit $70+/bl, from $66+ at open. Yet, none of this was enough to get us to close higher in equities. Why? While we have the positive data on the surface, deep underneath, we have the uncertainty over interest rates beginning 2010. Early in 2010, quantitative easing policies will be ending in the countries that implemented them and it will be up to the fiscal policies to take the lead.
As we have endlessly discussed here, the unique feature of this financial crisis of 2008 is the coordination in monetary policies. Monetary policy is easy to coordinate. There is only one head of a central bank in each country and all of them can meet at Jackson Hole, or Bretton Woods to plot against the value of our monetary assets. They can carry out balance sheet transfers overnight, they can surprise us with untimely comments, they can side with bankers to keep rates inordinately low, etc. Coordinating fiscal policies is however a different issue. It is simply impossible to coordinate them.
In the past two weeks, we have seen an explosion of research debating the future exit strategies. I have my personal opinion. However, it is an evolving creature and for the sake of clarity, I prefer to defer its exposition until further developments prove me right or wrong. In the meantime, we are going to witness volatility in the forex markets, on benchmark curves (today we saw an important steepening move in Treasuries), in swaps and agency debt while gold should quietly strengthen. It is also true, we may attribute some of these changes to the fact that we are trading at month and quarter end.
Below, I show the last seven trading sessions in the gold market (source: Bloomberg). You can see how gold sold off last Thursday, on the news that Robert Mundell urged politicians to implement the convertibility of the Euro vs. the USD. We commented the implications of this proposition two days ago (ref. “A Thought on a convertible Euro” www.sibileau.com/martin/2009/09/29 ) and concluded that such convertibility is not feasible on political grounds and that the late sell-off in gold should be seen as an opportunity. Gold is 1.8% up since then. Was it a mere coincidence?
February 10th, 2012 at 4:34 PM
Related……
[...]just beneath, are numerous totally not related sites to ours, however, they are surely worth going over[...]……
February 10th, 2012 at 7:06 PM
Online Article……
[...]The information mentioned in the article are some of the best available [...]……
February 10th, 2012 at 7:13 PM
Related……
[...]just beneath, are numerous totally not related sites to ours, however, they are surely worth going over[...]……
February 10th, 2012 at 7:42 PM
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]……
February 10th, 2012 at 8:13 PM
Cool sites…
[...]we came across a cool site that you might enjoy. Take a look if you want[...]……
February 10th, 2012 at 8:38 PM
Awesome website…
[...]the time to read or visit the content or sites we have linked to below the[...]……
February 11th, 2012 at 10:29 AM
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]……
February 11th, 2012 at 1:29 PM
Recommeneded websites…
[...]Here are some of the sites we recommend for our visitors[...]……
February 11th, 2012 at 2:40 PM
Websites you should visit…
[...]below you’ll find the link to some sites that we think you should visit[...]……
February 11th, 2012 at 4:11 PM
Sites we Like……
[...] Every once in a while we choose blogs that we read. Listed below are the latest sites that we choose [...]……
February 11th, 2012 at 5:06 PM
Blogs ou should be reading…
[...]Here is a Great Blog You Might Find Interesting that we Encourage You[...]……
February 11th, 2012 at 5:44 PM
Recommeneded websites…
[...]Here are some of the sites we recommend for our visitors[...]……
February 11th, 2012 at 5:55 PM
Superb website…
[...]always a big fan of linking to bloggers that I love but don’t get a lot of link love from[...]……
February 11th, 2012 at 7:26 PM
Awesome website…
[...]the time to read or visit the content or sites we have linked to below the[...]……
February 11th, 2012 at 8:16 PM
Websites we think you should visit…
[...]although websites we backlink to below are considerably not related to ours, we feel they are actually worth a go through, so have a look[...]……
February 11th, 2012 at 8:20 PM
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]……
February 12th, 2012 at 6:52 AM
Blogs ou should be reading…
[...]Here is a Great Blog You Might Find Interesting that we Encourage You[...]……
February 12th, 2012 at 7:36 AM
Check this out…
[...] that is the end of this article. Here you’ll find some sites that we think you’ll appreciate, just click the links over[...]……
February 12th, 2012 at 7:50 AM
Visitor recommendations…
[...]one of our visitors recently recommended the following website[...]……
February 12th, 2012 at 9:29 AM
Sources…
[...]check below, are some totally unrelated websites to ours, however, they are most trustworthy sources that we use[...]……
February 12th, 2012 at 9:52 AM
Superb website…
[...]always a big fan of linking to bloggers that I love but don’t get a lot of link love from[...]……
February 12th, 2012 at 9:55 AM
You should check this out…
[...] Wonderful story, reckoned we could combine a few unrelated data, nevertheless really worth taking a look, whoa did one learn about Mid East has got more problerms as well [...]……
February 12th, 2012 at 10:48 AM
Sources…
[...]check below, are some totally unrelated websites to ours, however, they are most trustworthy sources that we use[...]……
February 12th, 2012 at 10:56 AM
Online Article……
[...]The information mentioned in the article are some of the best available [...]……
February 12th, 2012 at 2:10 PM
Visitor recommendations…
[...]one of our visitors recently recommended the following website[...]……
February 12th, 2012 at 3:36 PM
Sources…
[...]check below, are some totally unrelated websites to ours, however, they are most trustworthy sources that we use[...]……
February 12th, 2012 at 4:00 PM
Websites you should visit…
[...]below you’ll find the link to some sites that we think you should visit[...]……
February 12th, 2012 at 5:23 PM
Websites we think you should visit…
[...]although websites we backlink to below are considerably not related to ours, we feel they are actually worth a go through, so have a look[...]……
February 12th, 2012 at 7:40 PM
Links…
[...]Sites of interest we have a link to[...]……
February 12th, 2012 at 7:50 PM
Sites we Like……
[...] Every once in a while we choose blogs that we read. Listed below are the latest sites that we choose [...]……
February 12th, 2012 at 8:01 PM
Superb website…
[...]always a big fan of linking to bloggers that I love but don’t get a lot of link love from[...]……
February 12th, 2012 at 9:03 PM
Recent Blogroll Additions……
[...]usually posts some very interesting stuff like this. If you’re new to this site[...]……
February 13th, 2012 at 5:11 AM
Blogs ou should be reading…
[...]Here is a Great Blog You Might Find Interesting that we Encourage You[...]……
February 13th, 2012 at 5:18 AM
Websites we think you should visit…
[...]although websites we backlink to below are considerably not related to ours, we feel they are actually worth a go through, so have a look[...]……
February 13th, 2012 at 7:09 AM
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]……
February 13th, 2012 at 9:23 AM
Recommeneded websites…
[...]Here are some of the sites we recommend for our visitors[...]……
February 13th, 2012 at 9:49 AM
Related……
[...]just beneath, are numerous totally not related sites to ours, however, they are surely worth going over[...]……
February 13th, 2012 at 10:04 AM
Blogs ou should be reading…
[...]Here is a Great Blog You Might Find Interesting that we Encourage You[...]……
February 13th, 2012 at 4:35 PM
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]……
February 13th, 2012 at 5:58 PM
Awesome website…
[...]the time to read or visit the content or sites we have linked to below the[...]……
February 13th, 2012 at 6:29 PM
Awesome website…
[...]the time to read or visit the content or sites we have linked to below the[...]……
February 13th, 2012 at 6:32 PM
Read was interesting, stay in touch……
[...]please visit the sites we follow, including this one, as it represents our picks from the web[...]……
February 14th, 2012 at 6:59 AM
Awesome website…
[...]the time to read or visit the content or sites we have linked to below the[...]……
February 14th, 2012 at 7:58 AM
Links…
[...]Sites of interest we have a link to[...]……
February 14th, 2012 at 7:59 AM
Gems form the internet…
[...]very few websites that happen to be detailed below, from our point of view are undoubtedly well worth checking out[...]……
February 14th, 2012 at 8:19 AM
Superb website…
[...]always a big fan of linking to bloggers that I love but don’t get a lot of link love from[...]……
February 14th, 2012 at 9:23 AM
Blogs ou should be reading…
[...]Here is a Great Blog You Might Find Interesting that we Encourage You[...]……
February 14th, 2012 at 9:23 AM
Recent Blogroll Additions……
[...]usually posts some very interesting stuff like this. If you’re new to this site[...]……
February 14th, 2012 at 9:46 AM
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]……
February 14th, 2012 at 10:56 AM
You should check this out…
[...] Wonderful story, reckoned we could combine a few unrelated data, nevertheless really worth taking a look, whoa did one learn about Mid East has got more problerms as well [...]……
February 14th, 2012 at 11:00 AM
Recommeneded websites…
[...]Here are some of the sites we recommend for our visitors[...]……
February 14th, 2012 at 12:16 PM
great blog here…
You should take part in a contest for one of the best blogs on the web. I will recommend this site!…
February 14th, 2012 at 6:40 PM
Cool sites…
[...]we came across a cool site that you might enjoy. Take a look if you want[...]……
February 14th, 2012 at 8:40 PM
You should check this out…
[...] Wonderful story, reckoned we could combine a few unrelated data, nevertheless really worth taking a look, whoa did one learn about Mid East has got more problerms as well [...]……
February 15th, 2012 at 3:49 AM
Recommeneded websites…
[...]Here are some of the sites we recommend for our visitors[...]……
February 15th, 2012 at 3:55 AM
Read was interesting, stay in touch……
[...]please visit the sites we follow, including this one, as it represents our picks from the web[...]……
February 15th, 2012 at 7:27 AM
You should check this out…
[...] Wonderful story, reckoned we could combine a few unrelated data, nevertheless really worth taking a look, whoa did one learn about Mid East has got more problerms as well [...]……
February 15th, 2012 at 8:12 AM
Blogs ou should be reading…
[...]Here is a Great Blog You Might Find Interesting that we Encourage You[...]……
February 15th, 2012 at 11:55 AM
thanks a million…
Aw, this was a really nice post. In idea I would like to put in writing like this additionally – taking time and actual effort to make a very good article… but what can I say… I procrastinate alot and by no means seem to get something done….
February 15th, 2012 at 12:15 PM
Youre so cool!…
Youre so cool! I dont suppose Ive read anything like this before. So nice to find somebody with some original thoughts on this subject. realy thank you for starting this up. this website is something that is needed on the web, someone with a little ori…
February 15th, 2012 at 3:28 PM
Nice post…
I learn something more challenging on different blogs everyday. It will always be stimulating to read content from other writers and practice a little something from their store. I’d prefer to use some with the content on my blog whether you don’t mind…
February 15th, 2012 at 4:54 PM
Cool sites…
[...]we came across a cool site that you might enjoy. Take a look if you want[...]……
February 15th, 2012 at 5:44 PM
Visitor recommendations…
[...]one of our visitors recently recommended the following website[...]……
February 15th, 2012 at 7:06 PM
Check this out…
[...] that is the end of this article. Here you’ll find some sites that we think you’ll appreciate, just click the links over[...]……
February 15th, 2012 at 9:32 PM
Great website…
[...]we like to honor many other internet sites on the web, even if they aren’t linked to us, by linking to them. Under are some webpages worth checking out[...]……
February 16th, 2012 at 12:54 AM
Gems form the internet…
[...]very few websites that happen to be detailed below, from our point of view are undoubtedly well worth checking out[...]……
February 16th, 2012 at 1:57 AM
Websites to visit…
[...]below you’ll find the link to some sites that we think you should visit[...]…
February 16th, 2012 at 4:50 AM
Recommeneded websites…
[...]Here are some of the sites we recommend for our visitors[...]……
February 16th, 2012 at 5:11 AM
Online Article……
[...]The information mentioned in the article are some of the best available [...]……
February 16th, 2012 at 9:08 AM
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]……
February 16th, 2012 at 9:33 AM
Sites we Like……
[...] Every once in a while we choose blogs that we read. Listed below are the latest sites that we choose [...]……
February 16th, 2012 at 4:52 PM
Websites you should visit…
[...]below you’ll find the link to some sites that we think you should visit[...]……
February 16th, 2012 at 6:37 PM
Online Article……
[...]The information mentioned in the article are some of the best available [...]……
February 16th, 2012 at 7:21 PM
Visitor recommendations…
[...]one of our visitors recently recommended the following website[...]……
February 16th, 2012 at 7:39 PM
Related……
[...]just beneath, are numerous totally not related sites to ours, however, they are surely worth going over[...]……
February 16th, 2012 at 10:07 PM
you are the best…
You then can listen to a playlist created based on an amalgamation of what all your friends are listening to, which is also enjoyable. Those concerned with privacy will be relieved to know you can prevent the public from seeing your personal listening …
February 17th, 2012 at 3:52 AM
Cool sites…
[...]we came across a cool site that you might enjoy. Take a look if you want[...]……
February 17th, 2012 at 4:22 AM
Websites you should visit…
[...]below you’ll find the link to some sites that we think you should visit[...]……
February 17th, 2012 at 5:14 AM
Superb website…
[...]always a big fan of linking to bloggers that I love but don’t get a lot of link love from[...]……
February 17th, 2012 at 9:45 AM
Online Article……
[...]The information mentioned in the article are some of the best available [...]……
February 17th, 2012 at 10:53 AM
Check this out…
[...] that is the end of this article. Here you’ll find some sites that we think you’ll appreciate, just click the links over[...]……
February 18th, 2012 at 4:46 PM
you are the best…
There are certainly a lot of details like that to take into consideration. That is a great point to bring up. I offer the thoughts above as general inspiration but clearly there are questions like the one you bring up where the most important thing wil…
February 19th, 2012 at 9:08 AM
Slow down man!…
I’ll gear this review to 2 types of people: current Zune owners who are considering an upgrade, and people trying to decide between a Zune and an iPod. (There are other players worth considering out there, like the Sony Walkman X, but I hope this give…
February 19th, 2012 at 10:58 AM
very nice post…
very nice post, i certainly love this website, keep on it…