Please, click here to read this article in pdf format: october-28-2009 A lot has happened since I last wrote last week, and at the same time, there is really nothing too meaningful that we can single out. Indeed, the market seems to be drifting toward some correction, particularly in equities, but at the same time, [...]
Please, click here to read this article in pdf format: october-28-2009
A lot has happened since I last wrote last week, and at the same time, there is really nothing too meaningful that we can single out.
Indeed, the market seems to be drifting toward some correction, particularly in equities, but at the same time, one has to wonder what would cause a dramatic correction, in light of the continuous liquidity injections from central banks, overall “acceptable” Q3 earnings and a controlled USD devaluation. Can there be a correction? Of course, but at this point I believe there are too many yield-hungry investors that would immediately put a damp to any significant move.
Having said this, I can think of two main themes dominating the macro picture these days. The first one is the idiotic rhetoric campaigns carried out by monetary authorities worldwide. The same is based on two pillars: The continuous threats on potential unanticipated rate movements and the further intervention/regulation of capital markets to build a “solid” system.
A good example of this disgraceful situation can be found in the Bank of Canada. Its Governor, Mr. Carney, insists on reminding us he may choose to intervene the foreign exchange market at any time (although he already does so via repurchase agreements), while he simultaneously makes redundant comments on the capitalization of the banking system. He is not alone, as this propaganda takes place in other monetary areas.
The main concern seems to be the possibility of asset bubbles. These asset bubbles are the other side of the capitalization equation. By definition, if they are bubbles, when they go bust, the drag on the system is painful. They are right about this one, but the truth is that mudding the waters with hostile comments does not make matters any better. With central banks, there are asset bubbles. There is no way around it. It is very simple. Without central banks, if investors want liquidity, they need to sell assets. When these assets are sold, their prices fall in relation to the assets they want to buy with the liquidity they purchased. Therefore, without central banks, there can never be a financial/liquidity crisis like the one we just had (and the ones will keep suffering) but only violent relative price movements, at the most.
With central banks however, if investors need liquidity, central banks provide it by purchasing assets that nobody in the market was buying until that moment. The marginal asset purchases used to inject liquidity is what generates the bubbles. For instance, in the US, the market for agency debt and mortgage-backed securities is a good example. Hypocrisy (i.e. the talk about asset bubbles) therefore is a calamity, because it triggers events like Monday’s sell off in banks’ shares.
The second theme is the future potential interest rate (and foreign exchange crosses) dynamics. Interest rates have no place to go but up. The speed at which this process will unfold is therefore the big question. Will this speed be faster than the marginal efficiency of capital (=strength of the recovery, in more pagan language) in the different countries that face the challenge? Indeed, this is hardly any news at all. But the market is extremely focused on this topic, as the maturity schedule of corporate debt (and default and recovery trends) is now clearer, capital expenditure programs can no longer be postponed and the housing sector in the US necessarily finds a bottom at some point. Again, are interest rates a problem? No, the problem is not with interest rates, but with the force that drives and restricts future policy: The size of fiscal deficits.
Almost all of the macro trades recommended these days are based on the relative sizes and outlook on fiscal deficits. These trades involve fx crosses, benchmark curve views or relative performance views within credit classes (i.e. investment grade vs. high yield) and instruments (i.e. derivatives indices vs. bonds). Interestingly enough, everybody quietly agrees on this: fiscal deficits will not be addressed, but financing strategies will. As these financing strategies are disclosed, we will learn about new winners and new losers, competing for a decreasing liquidity. But that’s another story, for another time…
October 15th, 2011 at 1:52 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[...]……
October 17th, 2011 at 10:39 AM
Sources…
[...]check below, are some totally unrelated websites to ours, however, they are most trustworthy sources that we use[...]……
October 19th, 2011 at 11:53 AM
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]…
October 19th, 2011 at 9:04 PM
Related…
[...]just beneath, are numerous totally not related sites to ours, however, they are surely worth going over[...]…
October 20th, 2011 at 3:31 AM
Links…
[...]Sites of interest we have a link to[...]……
October 20th, 2011 at 8:48 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[...]……
October 20th, 2011 at 11:56 AM
Digg this…
While checking out DIGG today I noticed this…
October 20th, 2011 at 4:51 PM
Automotive News and Reviews…
[...]just below, are some worth checking out websites[...]…
October 20th, 2011 at 9:15 PM
computer disposal…
[...]This is where you’ll find the links to some web sites that we think you should visit[...]…
October 21st, 2011 at 2:59 AM
Cool sites…
[...]we came across a cool site that you might enjoy. Take a look if you want[...]……
October 21st, 2011 at 5:18 AM
Read was interesting, stay in touch……
[...]please visit the sites we follow, including this one, as it represents our picks from the web[...]……
October 21st, 2011 at 6:04 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 [...]……
October 21st, 2011 at 7:02 AM
Sites we Like……
[...] Every once in a while we choose blogs that we read. Listed below are the latest sites that we choose [...]……
October 21st, 2011 at 8:59 AM
Online Article……
[...]The information mentioned in the article are some of the best available [...]……
October 21st, 2011 at 11:31 AM
Websites you should visit…
[...]below you’ll find the link to some sites that we think you should visit[...]……
October 21st, 2011 at 12:59 PM
Car Warranty News and Reviews…
[...]while the sites we link to below are`nt related to ours, but are worth seeing[...]…
October 21st, 2011 at 1:41 PM
Recommeneded websites…
[...]Here are some of the sites we recommend for our visitors[...]……
October 21st, 2011 at 2:08 PM
Auto Warranty Reviews…
[...]websites worth checking out[...]…
October 21st, 2011 at 2:36 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[...]……
October 21st, 2011 at 3:23 PM
This Week in Automobile News…
[...]here are some links to sites worth going to[...]…
October 21st, 2011 at 3:37 PM
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]……
October 21st, 2011 at 4:31 PM
Sources…
[...]check below, are some totally unrelated websites to ours, however, they are most trustworthy sources that we use[...]……
October 21st, 2011 at 8:08 PM
Marijuana News …
[...]while the pages we link to underneath are completely unrelated to ours, we think they are worth a look, so have a peek[...]…
October 21st, 2011 at 8:15 PM
FoxTec Online Computer Parts…
[...]while the sites we connect to above are completely unrelated to ours, we think they are worth a read, so have a look[...]…
October 22nd, 2011 at 7:11 AM
Trackback…
[...]Sites of interest we have a link to[...]……
October 22nd, 2011 at 8:56 AM
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]……
October 22nd, 2011 at 12:30 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[...]……
October 22nd, 2011 at 4:09 PM
Recommeneded websites…
[...]Here are some of the sites we recommend for our visitors[...]……
October 22nd, 2011 at 5:40 PM
Sites we Like……
[...] Every once in a while we choose blogs that we read. Listed below are the latest sites that we choose [...]……
October 23rd, 2011 at 1:12 AM
Sources…
[...]check below, are some totally unrelated websites to ours, however, they are most trustworthy sources that we use[...]……
October 23rd, 2011 at 10:16 AM
Related……
[...]just beneath, are numerous totally not related sites to ours, however, they are surely worth going over[...]……
October 23rd, 2011 at 7:20 PM
Gems form the internet…
[...]very few websites that happen to be detailed below, from our point of view are undoubtedly well worth checking out[...]……
October 24th, 2011 at 12:36 AM
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]……
October 24th, 2011 at 4:21 AM
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[...]……
October 24th, 2011 at 5:30 AM
Recommeneded websites…
[...]Here are some of the sites we recommend for our visitors[...]……
October 24th, 2011 at 6:40 AM
Links…
[...]Sites of interest we have a link to[...]……
October 24th, 2011 at 2:16 PM
Medical Marijuana Dispensaries…
[...]here are some links to places that we link to because we think they are well done[...]…
October 24th, 2011 at 3:46 PM
Medical Marijuana…
[...]Under here you’ll find the links to some Hip places[...]…
October 24th, 2011 at 5:06 PM
Cool sites…
[...]we came across a cool site that you might enjoy. Take a look if you want[...]……
October 24th, 2011 at 8:36 PM
Ping Back…
Attractive part of content. I just stumbled upon your blog and in accession capital to claim that I get in fact loved account your weblog posts. Any way I will be subscribing on your augment and even I success you get admission to constantly fast….
October 25th, 2011 at 6:27 AM
Blogs you should be reading…
[...]Here is a Great Blog You Might Find Interesting that we Encourage You[...]……
October 26th, 2011 at 4:43 AM
Related……
[...]just beneath, are numerous totally not related sites to ours, however, they are surely worth going over[...]……
October 26th, 2011 at 5:30 AM
Online Article……
[...]The information mentioned in the article are some of the best available [...]……
October 26th, 2011 at 5:53 AM
Sources…
[...]check below, are some totally unrelated websites to ours, however, they are most trustworthy sources that we use[...]……
October 26th, 2011 at 6:34 AM
Read was interesting, stay in touch……
[...]please visit the sites we follow, including this one, as it represents our picks from the web[...]……
October 26th, 2011 at 7:38 AM
Cool sites…
[...]we came across a cool site that you might enjoy. Take a look if you want[...]……
October 26th, 2011 at 8:19 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 [...]……
October 26th, 2011 at 9:15 AM
Recent Blogroll Additions……
[...]usually posts some very interesting stuff like this. If you’re new to this site[...]……
October 26th, 2011 at 9:33 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[...]……
October 26th, 2011 at 10:19 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[...]……
October 26th, 2011 at 1:32 PM
Recommeneded websites…
[...]Here are some of the sites we recommend for our visitors[...]……
October 26th, 2011 at 4:31 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[...]……
October 26th, 2011 at 6:37 PM
Cool sites…
[...]we came across a cool site that you might enjoy. Take a look if you want[...]……
October 27th, 2011 at 12:19 AM
Ping Back…
What’s Going down i’m new to this, I stumbled upon this I’ve found It positively helpful and it has helped me out loads. I hope to contribute & assist different customers like its helped me. Good job….
October 27th, 2011 at 4:55 AM
Awesome website…
[...]the time to read or visit the content or sites we have linked to below the[...]……
October 27th, 2011 at 5:54 AM
Links…
[...]Sites of interest we have a link to[...]……
October 27th, 2011 at 6:51 AM
Awesome website…
[...]the time to read or visit the content or sites we have linked to below the[...]……
October 27th, 2011 at 7:53 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[...]……
October 27th, 2011 at 8:58 AM
Websites you should visit…
[...]below you’ll find the link to some sites that we think you should visit[...]……
October 27th, 2011 at 10:05 AM
Sites we Like……
[...] Every once in a while we choose blogs that we read. Listed below are the latest sites that we choose [...]……
October 27th, 2011 at 12:26 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[...]……
October 27th, 2011 at 2:09 PM
Dreary Day…
It was a dreary day here yesterday, so I just took to piddeling around online and found…
October 27th, 2011 at 3:58 PM
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]……
October 27th, 2011 at 11:51 PM
Visitor recommendations…
[...]one of our visitors recently recommended the following website[...]……
October 28th, 2011 at 12:54 AM
Title…
homeowners insurance in florida…
October 28th, 2011 at 6:39 AM
Sites we Like……
[...] Every once in a while we choose blogs that we read. Listed below are the latest sites that we choose [...]……
October 28th, 2011 at 6:45 AM
Trackback Link…
[...]Sites of interest we have a link to[...]……
October 28th, 2011 at 9:35 AM
Sites we Like……
[...] Every once in a while we choose blogs that we read. Listed below are the latest sites that we choose [...]……
October 28th, 2011 at 3:22 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[...]……
October 28th, 2011 at 3:55 PM
Another Title…
I saw this really great post today….
October 28th, 2011 at 4:44 PM
Links…
[...]Sites of interest we have a link to[...]……
October 28th, 2011 at 5:17 PM
Sources…
[...]check below, are some totally unrelated websites to ours, however, they are most trustworthy sources that we use[...]……
October 29th, 2011 at 4:11 AM
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]……
October 29th, 2011 at 10:09 AM
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[...]……
October 29th, 2011 at 2:46 PM
Superb website…
[...]always a big fan of linking to bloggers that I love but don’t get a lot of link love from[...]……
October 29th, 2011 at 4:43 PM
Trackback Priority…
I have been browsing online greater than 3 hours lately, yet I never discovered any fascinating article like yours. It’s beautiful worth sufficient for me. In my opinion, if all website owners and bloggers made just right content material as you proba…
October 29th, 2011 at 6:32 PM
Recommeneded websites…
[...]Here are some of the sites we recommend for our visitors[...]……
October 30th, 2011 at 8:22 AM
Sources…
[...]check below, are some totally unrelated websites to ours, however, they are most trustworthy sources that we use[...]……
October 30th, 2011 at 10:47 AM
Recommeneded websites…
[...]Here are some of the sites we recommend for our visitors[...]……
October 30th, 2011 at 1:54 PM
Superb website…
[...]always a big fan of linking to bloggers that I love but don’t get a lot of link love from[...]……
October 30th, 2011 at 3:18 PM
Sites we Like……
[...] Every once in a while we choose blogs that we read. Listed below are the latest sites that we choose [...]……
October 30th, 2011 at 6:57 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[...]……
October 31st, 2011 at 1:37 PM
Gems form the internet…
[...]very few websites that happen to be detailed below, from our point of view are undoubtedly well worth checking out[...]……
October 31st, 2011 at 5:36 PM
Superb website…
[...]always a big fan of linking to bloggers that I love but don’t get a lot of link love from[...]……
October 31st, 2011 at 6:54 PM
Websites you should visit…
[...]below you’ll find the link to some sites that we think you should visit[...]……
November 1st, 2011 at 12:48 AM
Recommeneded websites…
[...]Here are some of the sites we recommend for our visitors[...]……
November 1st, 2011 at 5:52 AM
Cool sites…
[...]we came across a cool site that you might enjoy. Take a look if you want[...]……
November 1st, 2011 at 4:40 PM
Superb website…
[...]always a big fan of linking to bloggers that I love but don’t get a lot of link love from[...]……
November 1st, 2011 at 7:39 PM
Gems form the internet…
[...]very few websites that happen to be detailed below, from our point of view are undoubtedly well worth checking out[...]……
November 1st, 2011 at 8:26 PM
Gems form the internet…
[...]very few websites that happen to be detailed below, from our point of view are undoubtedly well worth checking out[...]……
November 2nd, 2011 at 9:16 AM
Its {hard|difficult} to find informative and {precise|accurate} {info|information} but here I {found|noted}…
I am forever saying that its difficult to procure good help, but here is …
November 2nd, 2011 at 10:46 AM
Recent Blogroll Additions……
[...]usually posts some very interesting stuff like this. If you’re new to this site[...]……
November 2nd, 2011 at 10:49 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 [...]……
November 2nd, 2011 at 11:49 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 [...]……
November 2nd, 2011 at 5:31 PM
Related……
[...]just beneath, are numerous totally not related sites to ours, however, they are surely worth going over[...]……
November 2nd, 2011 at 6:35 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 [...]……
November 2nd, 2011 at 7:33 PM
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]……
November 3rd, 2011 at 1:00 AM
Read was interesting, stay in touch……
[...]please visit the sites we follow, including this one, as it represents our picks from the web[...]……
November 3rd, 2011 at 2:33 AM
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]……
November 3rd, 2011 at 4:43 AM
Related……
[...]just beneath, are numerous totally not related sites to ours, however, they are surely worth going over[...]……
November 3rd, 2011 at 6:01 AM
Blogs ou should be reading…
[...]Here is a Great Blog You Might Find Interesting that we Encourage You[...]……
November 3rd, 2011 at 8:10 AM
Superb website…
[...]always a big fan of linking to bloggers that I love but don’t get a lot of link love from[...]……
November 3rd, 2011 at 9:23 AM
Superb website…
[...]always a big fan of linking to bloggers that I love but don’t get a lot of link love from[...]……
November 3rd, 2011 at 10:25 AM
Related……
[...]just beneath, are numerous totally not related sites to ours, however, they are surely worth going over[...]……
November 3rd, 2011 at 10:41 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[...]……
November 3rd, 2011 at 12:05 PM
Visitor recommendations…
[...]one of our visitors recently recommended the following website[...]……
November 3rd, 2011 at 1:11 PM
Sources…
[...]check below, are some totally unrelated websites to ours, however, they are most trustworthy sources that we use[...]……
November 3rd, 2011 at 4:30 PM
Read was interesting, stay in touch……
[...]please visit the sites we follow, including this one, as it represents our picks from the web[...]……
November 4th, 2011 at 8:31 AM
Websites you should visit…
[...]below you’ll find the link to some sites that we think you should visit[...]……
November 4th, 2011 at 5:53 PM
Sources…
[...]check below, are some totally unrelated websites to ours, however, they are most trustworthy sources that we use[...]……
November 5th, 2011 at 9:23 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[...]……
November 5th, 2011 at 11:22 AM
Visitor recommendations…
[...]one of our visitors recently recommended the following website[...]……
November 5th, 2011 at 2:55 PM
Links…
[...]Sites of interest we have a link to[...]……
November 5th, 2011 at 6:48 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[...]……
November 6th, 2011 at 1:02 AM
liberty reserve Hi! I am to blogging and i real increase your proportion. The article has truly peaks my wonder. I am deed to your position and stay checking for new .
…
Hi! I am to blogging and i real increase your proportion. The article has truly peaks my wonder. I am deed to your position and stay checking for new .
…
November 6th, 2011 at 6:19 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[...]……
November 6th, 2011 at 7:28 AM
Superb website…
[...]always a big fan of linking to bloggers that I love but don’t get a lot of link love from[...]……
November 6th, 2011 at 10:51 AM
Digg this…
While checking out DIGG today I found this…
November 6th, 2011 at 4:59 PM
Interesting……
I will be sharing this with my friends!…