Tradefair & Financials
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Whippet, I'd like you to know I wouldn't do this for anyone else on here. I would normally let you go on trading these markets in blissful ignorance, not understanding what moves them, but I like you. I think you have potential if you can learn to control your temper. I'm posting this now because I thought since you've had a chance to walk away from your computer last evening, calm down and stop posting insults, you'd be able to understand my explanation of what happened this week. Obviously, from reading your posts on the other threads, I'm wrong. Calming down and not spewing insults doesn't seem to be something you are capable of doing. Since I put this together however, I'll put it up, may be other posters would gain from it.
Here's a brief description (to the extend possible) of what took place this week that seems to have you so befuddled. We got a rally in the markets when based on what you were posting you were clearly expecting a selloff or at least "flatlining". What's worse, you still don't seem to know or understand why. You posted, "there shouldn't be a massive selloff from here" - massive being the key word. In other words you thought a selloff was quite possible but not likely a massive one. In the same post you said "I reckon it will be pretty flat", not exactly an endorsement for buying the market. Your posts are still up readers can look them up for themselves. So redefining reality ("I held on to my longs") and mocking the "perma-bears" AFTER THE MARKET did what it did, makes you irresponsible and silly.
Here's the crux of the matter: The FED is trying to create the illusion of recovery WITHOUT THE INFLATION. This is not a conspiracy theory, it's there right in front of your nose if you know where to look.
First of all, to sell the illusion of recovery, Bernanke needs a rallying market. He knows better than anyone that most people relate a rising market to a healthy and growing economy.What a better time to ramp the market up when you can get cover from the Greece "solution" and right before the July 4, independence day long weekend. What a better time to pull this off when you can get panicked shorts to do a lot of the lifting for you when they cover positions and run for the hills. Short interest had been building up on NYSE by the TA traders and those paying attention to fundamentals (bad economic indicators everywhere, slowing growth in global economy, EZ sovereign debt issues led by Greece). NYSE short interest was the highest in 2011, at 13.5 billion shares an increase close to half a billion shares in just two weeks. This is an old page out of the FED's playbook and If you didn't see it coming, you just weren't paying attention. They pulled the same stunt in the fall of 2008, spring 2009, summer 2010.
You may argue that I have no way of proving this thesis, that it is all a conspiracy theory. You could argue that but you'd have a tough time explaining to me how Citi, JPM, GS & BAC only had one losing day at the prop desks, all four banks COMBINED, during the last quarter. What is that, a nine sigma event?
Second, the FED needs to deal with INFLATION which they deny they created through money printing. They need lower petrol and lower food prices. This play was telegraphed by the FED and again, I posted about it. Just get the IEM to issue a statement about releasing strategic supplies (half from the SPR) AT A TIME WHEN IT WAS TOTALLY UNNECESSARY since the trend for oil prices was already heading lower and...mission accomplished. Well, almost. The oil market reacted and the oil price bounced back up when it was starting to become obvious that the petroleum strategic reserves would now be held, instead of the sovereign members of the IEA, by.....the too big too fail banks. There's a lot of doubt now whether actually any inventories will be moved out, or if the whole scam is simply....a paper transaction.
How did the FED deal with trying to lower food prices? Simple, just get the USDA to announce an out of the blue and totally unexpected high yield corn acreage number AT A TIME WHEN PRICES WERE EASING ANYWAYS and you have those holding long positions running for the hills. Not only in corn, but the entire grain complex, not to mention the expected spill over into the livestock sector. The end result, lower food prices on all products using corn and wheat but also lower meat and chicken prices at the same time. Just like magic. Isn't that Bernanke a miracle maker?
And last but not least, the mirror that reflects the FED's debasement of the USD had to be viciously attacked, that of course being gold. The price of gold dropping like a rock when the "risk on" trade is back on with a vengeance and Greece has magically disappeared from everyone's radar screen.......AT A TIME WHEN THE COMMERCIAL NET SHORT FUTURES have taken an incredible plunge. And if this doesn't make you scratch your head and go hmmmmm, you better go back and read that last line again.
Whippet, I have been posting ad nauseum on this forum, "the markets have dislocated from the real economy" and "don't fight the FED" but evidently you haven't been listening. I also posted that commodities are about to be mercilessly attacked because Bernanke sees inflation as "transitory". If you weren't commodities short and equities long (that's where the money leaving the commodities market would end up chasing alpha) the last couple of weeks, you either don't understand what's been posted or you are too proud to ask.
As far as the prediction you posted is concerned (FTSE 7000, DOW 14000, Gold $1250, AAPL $450 from here), I can't really comment on it since there is no timeframe attached. I have no idea if you believe those levels will be achieved next week, next month, next year or at some other unspecified point in time. I would say, as long as Bernanke runs the show, these markets will continue to levitate despite poor fundamentals.....unless an unforeseen event beyond their control takes place. Also what will eventually catch up with Bernanke is something called.......reality.
The last thing I want to leave you with is that putting up those predictions at the end of a week where we saw the DOW climb over 600 points looks and feels to me that you are following the herd of sheep. Stay close to the exit to make sure you don't get sheared as all ignorant lemmings like you inevitably eventually do.
Here's a brief description (to the extend possible) of what took place this week that seems to have you so befuddled. We got a rally in the markets when based on what you were posting you were clearly expecting a selloff or at least "flatlining". What's worse, you still don't seem to know or understand why. You posted, "there shouldn't be a massive selloff from here" - massive being the key word. In other words you thought a selloff was quite possible but not likely a massive one. In the same post you said "I reckon it will be pretty flat", not exactly an endorsement for buying the market. Your posts are still up readers can look them up for themselves. So redefining reality ("I held on to my longs") and mocking the "perma-bears" AFTER THE MARKET did what it did, makes you irresponsible and silly.
Here's the crux of the matter: The FED is trying to create the illusion of recovery WITHOUT THE INFLATION. This is not a conspiracy theory, it's there right in front of your nose if you know where to look.
First of all, to sell the illusion of recovery, Bernanke needs a rallying market. He knows better than anyone that most people relate a rising market to a healthy and growing economy.What a better time to ramp the market up when you can get cover from the Greece "solution" and right before the July 4, independence day long weekend. What a better time to pull this off when you can get panicked shorts to do a lot of the lifting for you when they cover positions and run for the hills. Short interest had been building up on NYSE by the TA traders and those paying attention to fundamentals (bad economic indicators everywhere, slowing growth in global economy, EZ sovereign debt issues led by Greece). NYSE short interest was the highest in 2011, at 13.5 billion shares an increase close to half a billion shares in just two weeks. This is an old page out of the FED's playbook and If you didn't see it coming, you just weren't paying attention. They pulled the same stunt in the fall of 2008, spring 2009, summer 2010.
You may argue that I have no way of proving this thesis, that it is all a conspiracy theory. You could argue that but you'd have a tough time explaining to me how Citi, JPM, GS & BAC only had one losing day at the prop desks, all four banks COMBINED, during the last quarter. What is that, a nine sigma event?
Second, the FED needs to deal with INFLATION which they deny they created through money printing. They need lower petrol and lower food prices. This play was telegraphed by the FED and again, I posted about it. Just get the IEM to issue a statement about releasing strategic supplies (half from the SPR) AT A TIME WHEN IT WAS TOTALLY UNNECESSARY since the trend for oil prices was already heading lower and...mission accomplished. Well, almost. The oil market reacted and the oil price bounced back up when it was starting to become obvious that the petroleum strategic reserves would now be held, instead of the sovereign members of the IEA, by.....the too big too fail banks. There's a lot of doubt now whether actually any inventories will be moved out, or if the whole scam is simply....a paper transaction.
How did the FED deal with trying to lower food prices? Simple, just get the USDA to announce an out of the blue and totally unexpected high yield corn acreage number AT A TIME WHEN PRICES WERE EASING ANYWAYS and you have those holding long positions running for the hills. Not only in corn, but the entire grain complex, not to mention the expected spill over into the livestock sector. The end result, lower food prices on all products using corn and wheat but also lower meat and chicken prices at the same time. Just like magic. Isn't that Bernanke a miracle maker?
And last but not least, the mirror that reflects the FED's debasement of the USD had to be viciously attacked, that of course being gold. The price of gold dropping like a rock when the "risk on" trade is back on with a vengeance and Greece has magically disappeared from everyone's radar screen.......AT A TIME WHEN THE COMMERCIAL NET SHORT FUTURES have taken an incredible plunge. And if this doesn't make you scratch your head and go hmmmmm, you better go back and read that last line again.
Whippet, I have been posting ad nauseum on this forum, "the markets have dislocated from the real economy" and "don't fight the FED" but evidently you haven't been listening. I also posted that commodities are about to be mercilessly attacked because Bernanke sees inflation as "transitory". If you weren't commodities short and equities long (that's where the money leaving the commodities market would end up chasing alpha) the last couple of weeks, you either don't understand what's been posted or you are too proud to ask.
As far as the prediction you posted is concerned (FTSE 7000, DOW 14000, Gold $1250, AAPL $450 from here), I can't really comment on it since there is no timeframe attached. I have no idea if you believe those levels will be achieved next week, next month, next year or at some other unspecified point in time. I would say, as long as Bernanke runs the show, these markets will continue to levitate despite poor fundamentals.....unless an unforeseen event beyond their control takes place. Also what will eventually catch up with Bernanke is something called.......reality.
The last thing I want to leave you with is that putting up those predictions at the end of a week where we saw the DOW climb over 600 points looks and feels to me that you are following the herd of sheep. Stay close to the exit to make sure you don't get sheared as all ignorant lemmings like you inevitably eventually do.
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took me three attempts to read the full post.I fell asleep the first 2 times.[;)]
at least you kept the abuse to a minimum melly. interesting thoughts actually. I just have a few questions , if you could help. here in aust in the AFL footy this year virtually all the favs have won all season.Almost no upsets.However this weekend there were a number of upsets. Was it bernake? In the aust womens soccer game against eq guinea one player caught the ball but the referee missed it completely- a bernake agent? Theres big floods in china, will push up rice prices apparently- did a bernake agent leave a tap on somewhere do you think? Of course the Thai election result- bernakes doing. One other thing ,Im asking you for advice, like J2 does, where do you think the price of bernake, ooops sorry GOLD will go from here. Please help.  |
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Mrben Joined: 25 Oct 03
Replies: 3784 02 Jul 11 05:12 beat me with a rubber stick baby!!!!!! be a good boy and take your pants down I'll show what Bernake can do then it's gonna hurt for a while but you'll get over it |
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your a cream puff canada, you proved it omn the other thread. You could'nt pull the skin off a rice custard.
actually I'm surprised you did'nt mention a word ending in "tard"  |
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I'm starting to change my mind about beating you up
I see too many of these  in your postsI'm starting to think you're gay...... .....not that there's anything wrong with that ozzie "man" |
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gay, definitely gay
I mean using words like "cream puff" **** pleeeease ***** I hope I didn't hurt you too much girl, eeer, sorry I mean ozzie "man" |
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"cream puff"
PMSL why don't you throw your high heels at me ozzie "man"?  |
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canadian is loved where ever he goes
 04 Jul 11 04:18 Joined: 25 Oct 10 | Topic/replies: 3,686 | Blogger: TeenQueen's blog MrCanada, Got anything interesting to say, say it, otherwise, fk off! |
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throw your purse at me ozzie "man"
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a few inaccuracies, or better, few too many personal views into what happened.
so i give you my version, where i try to link the dots you cannot explain: firstly: the markets are rallying after greece passed the budget cuts making it less likely the european banking systems is going to implode ( and by the way, this is not just kicking the can, greece is tightening the belt and reducing the future liabilities, maybe too slowly but at least the EZ is doing somethign about its fiscal problems, wish we could say the same about the US ). at the same time we had a strong reading from michigan and mainly ISM ( i actually warned you and others here that the previous drop of 6pct points was way too big and was due a rebound, it was probably the easiest forecast to make if one knows how the ism is compiled and recorded ), so now we have hopes/feelings/convictions of a soft patch rather than a double dip. and of course with the markets stretched on the short side, you always going to get a sharper retracement, i ll repeat it again and again, but prices are a result of demand and supply, not of some intrinsic value.. about the price of oil and corn, most think that it was the right thing to do; ok, the price must have gone the right direction for a couple of days before then, but it s been going the wrong direction for at least a couple of yrs now - wasnt you saying that when fuel cost more than 4$ in america we always get a recession? so, isnt it a fair response to try to fight that? arent reserves something you store in order to use them in emergencies? about gold, yeah a bit puzzling that it s going down where other assets rally, but again, it s you saying it s a ccy so shudnt behave like the spx, although most of the times it s correlated. but in a world where the fears of double dip and EZ banking system collapse have just been reduced ( if only for a few weeks ), the price of the safest haven has to come down. look at what happened to the chf - which is the closest thing to gold you can get these days, it s TWI dropped around 3%.. so risk on, most of times means 'dollar off' ( if inflationary pressures are building ), but at other times means 'safehavens off' ( considering the inflationary pressures shud come off a bit in light of what happened again in some of the commodity markets - oil, corn... remember we even got a slow pmi out of china recently, and they been the biggest commodity buyers in last 2 yrs, so a cool down there in the economy might mean less pressures on prices ( ehy, after hiking few times this yr, there are already rumours of rate cuts in china now ..) lastly, i need to ask you where you get this information: You may argue that I have no way of proving this thesis, that it is all a conspiracy theory. You could argue that but you'd have a tough time explaining to me how Citi, JPM, GS & BAC only had one losing day at the prop desks, all four banks COMBINED, during the last quarter. What is that, a nine sigma event? are you sure you re not confusing the terms trading desks and prop desks? ;-) the clue shud be in the fact that all these banks actually have shut down their prop desk ( as per volker ).. trading desks always operate at profit, in the trading books you have all the market making activities and if banks werent making money there they could even stop the activity...( it s almost like a supermarket selling zero goods in a day ) prop desks are meant to have ups and downs - and hopefully a positive yr in the end, but their performances are much more volatile. their return most of times reflect the street returns ( read: hedge funds, macro ), so it would be incredible to see prop desks making money (and every single day, sharpe in the 'one thousand' region), while hedge funds are struggling - werent you making comments about how rubbish taylor, paulson and whoever else were this yr ( and the few guys who are positive are showing a sharpe of 1 to 2 at best)? i would double check your source of information, but please if you have a link, would be great if you could share it. jw |
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Nice piece of fiction there JW laced with mistakes and inaccuracies. I can't decide whether I should take the time to point those out to you, or just let it go. No one grew richer trying to set people straight on a public forum before so I'm really torn. I'll let you know.
The only thing I will bother commenting on now because it's still ongoing and it jumped out of the page at me, is your naive belief that the can was not kicked down the road, Greece is tightening the belt and reducing future liabilities. You either don't understand that you can't solve a debt problem by piling on more debt, or that the austerity measures so far (and now more to come) have led to widening the gap between government spending and receipts (this is usually what happens when you push your economy down a depression spiral) and the debt to GDP ratio will be higher at the end of this bailout package than what it is today. So mush for not kicking the can down the road. Greece will default within the next 24 months and return to the drachma. This will take place as soon as French and German banks push all their toxic Greek paper onto the back of the ECB and the job of looting Greece of all it's assets through "urgent privatization" is completed. I have always found it amazing how is all your posts on here you tow the Big Bank, Big Corporation, Big Government party line. Lift your head up from the propaganda every now and then, you may get a different view of the world. |
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Now Menelaus the tone of your reply to JW is totally unclled for.
He's the only one on here who is prepared to debate you calmly, intelligently and, most importantly, politely and you treat him like this. I think you really might have serious personality issues after all. |
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However, putting all that nastiness to one side for the sake of progessing further, isn't it true that both of you are indulging in what I believe is called " tne narrative fallacy" in financial circles.
That is you are both trying to put a read or a spin ( different in your two cases) on almost all the minutae of information that comes into the market daily. As a consequence you even start to read meaning into data that is essentially just info. on random movements. I can read both your scenario rationalisations and walk away none the wiser and perhaps even more torn and confused. |
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FAFH, I don't know if you clued in yet but reading certain poster's stuff on here is OPTIONAL. I would highly suggest to you that if you feel "I have serious personality issues after all" that you stop reading my posts. Because if one were to come to the same conclusion as you did, yet continue not only to read but comment on someone's posts with "personality issues", then another could easily come to the conclusion that the second poster (that's you FAFH in case I lost you) has more serious personality issues than the first. Food for thought.
My post didn't go up to be debated, it went up to inform. If I'm unsure about something, I will ask for feedback and input, otherwise I could care less about "debate". May be I'm the sensitive type but labeling my post as having "inaccuracies" simply because someone is towing the government published propaganda is not something I take kindly to, but that's just me. As far the actual JW post was concerned, I don't know if it's worth my time to respond anymore, when he quotes the "publicized" fiction in main stream financial media was that the market was bouncing in a better than expected reading from Michigan. One of these days when I stop laughing I will post why several other economic indicators, as important as the Michigan survey data if not more important, came in way worse than expected but got shrugged off. The Michigan number and the Greece bailout were cover for the FED, no more, no less. And the comment on the Greek bailout as not kicking the can down the road, well it's just totally distorting reality, at a time when even shoe shine boys are coming to the conclusion that Greece will inevitably default. Why? Because the maths don't support any other solution, that's why. If you are "confused" ask specific questions, and if I have time, I'll try to clear things up for you. Coming on here always as a Johnny come lately sharing what appears to be random thoughts won't get you too far. Cheers. |
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the canadian is a gayer imo.
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No Menelaus you're wrong I'm afraid to say.
If you want respect from your peers ( and you seem to want it) then you have to show respect. Now JW has done nothing but show you respect and he is, in my opinion at least, certainly one of your peers. The rest of us, I agree, would appear just to be interested bystanders and so I can understand to a large extent why you couldn't give a monkey's what we think. And I agree that the likes of Benny are just a joke. But you really do have to at least think about toning all this intellectual arrogance down a bit. It's actually self defeating. You're not getting the type of feedback you actually deserve for the obvious amount of effort you are putting into your posts. I mean here the economic academic parts of them, not the derogatory parts. |
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FAFH, I'm really starting to worry about you or may be it takes a smarter person than me to reconcile the "you really might have personality issues after all" post with what you just posted right now. It matters not, it's for you to decide what this all means, I simply don't have the time nor patience to bother anymore.
I think in the future I will limit my contributions to the forum to "drive-by shootings" and correcting "inaccuracies" like the majority of posters on here. A lot safer that way. Have a great evening. |
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few comments.
about greece. so all of sudden you ve become keynesist and start to advocate that a bigger budget (ie.extra spending) would be better to reduce the gap between spending and receipts. good to know that you swapped to this camp, so i guess what greece had done in 2007/8/9 to defend from the crises was correct in your view, at least in the intentions. im of the opinion that things like increasing the retiring age, cutting some tax benefits and loopholes, it s something more than kicking the can. history repeas itself, only a couple of yrs ago we were supposed to witness the bankrupties of lithuania and latvia. the eur/lat 6mths forward was trading at parity ( from a 0.7070 parity level ), the offshore rates were above 40%, all of this pointing at a devaluation of the ccy of 40-50% .. today, 2yrs of austerity later, with real personal income dropped by 20-25% , their economy is back on track and the republic of latvia issue the 10yrs below spain. did i mention the ccy? the eur/lat 6mths forward is stuck with glue at spot levels.. about the greek privatizations.. of course it s an ambitious plan for greece, but it s good to try it, and although unlikely to generate the moneys written down in the forecasts, it would be still a meaningful bite in their debt burden. kicking the can would have been just lending them money and pay for their liabilities. or worst, letting them go to the drachma, witness their banks, insurances and most companies go bankrupt, see the country go into civil war. this while they still run a primary budget deficit ( not to mention the current account ) which means they re not autarchic at all, neither in terms of capitals nor of goods and services. but to be honest i dont even care wheter greece will go bust or not within few yrs. and again, you re not saying anything new by saying they will ( i mean the probability given the cds levels is about 70-75% ). and you re not even saying anything new by putting me in the bullish camp. what we care though is what can happen in the next 1-2 months, i have no use of a longer term horizon. or werent you the one telling off pierrelarouge because he s been a bear since ever, and risk to finish his chips before his swan pass by? to finish with greece, and to show how biased you are, this is my comment, with underlined the bits i think you didnt read: "this is not just kicking the can, greece is tightening the belt and reducing the future liabilities, maybe too slowly but at least the EZ is doing somethign about its fiscal problems, wish we could say the same about the US", you would have got more the sense of my comment ( or if you want me to read the lines and the in betweens: the dollar is going to get punished for this ) about the indicators, although i mentioned the michigan, i even typed in capitals that the ISM was the main one to look at. it is the main indicator in each economy, no one looks at any other indicator more closely than this ( maybe, maybe, but only for traditional reasons, the nfp ). try to have a look at ism vs lagged spx and then go: wow! and i mean try to go back 40-50 yrs.. on top, the average ism since inception has been in the mid 52, and we re now seeing it at 56. it is a strong signal, nothing more nothing less but markets loved it ( same way they hated the massive drop to 53 on the previous reading ). of course i forgot to mention that the other positive bits is been hearing bernanke putting on hold at least for the moment any plan for qe3. i remember another post where i mentioned how market operators were def in favour of a 'stop print' situation rather than 'further print'. i remember as well how you treated this view with your usual smugness even trying to ridicule the market operators ( who? john taylor of fxc, who s down so far this yr? or maybe griffin from citadel or paulson who are dropping money like it s out of fashion? )... guess what, the market operators rewarded the choice it seems. but ehy, who s john paulson or kenneth griffin if you could be menelaus? ;-) mainly anyway, you tend to reply to questions with posts which avoid completely the question itself. i asked you politely where did you get this piece of information about prop desks profits. at the moment you re choosing to forget to reply. we all suspect why ( you can admit it, you made it up? ;-) it would be polite as well to know why you thought of my previous post: "Nice piece of fiction there JW laced with mistakes and inaccuracies." apart from the grek comment - which is a personal opinion, ie cannot count by definition as an inaccuracy, which part was inaccurate? happy to hear your comments, although given the late hour i guess someone else will reply before you. jw |
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Well that is certainly giving Menelaus a dose of his own medicine.
I can't wait for his reply. Please wake up early M. This should be fun. When acadebics spat, it can get very nasty and personal. Egos and intellects clashing generally creates really interesting sparks. And the added bonus is that the throw-off could be a really good learning exercise for us other plebs, in the polarities that exist in the " expert " interpretation of economic data. |
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The question is will M rise to the occasion like a trye champion, or will he just hide behind his last hissy fit post ?.
My money is on him taking on the challenge thrown down to him by JW . Any odds compilers out there, experienced in intellect challenges ? |
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Btw the richest guy I've ever met wouldn't understand a word of what either of these two are saying.
So don't get a complex if it goes right over your head. In fact probably try to find one or two of the very few things they do seem to agree on, and perhaps try some contrarian trades on those. Remember LTCM even had Nobel Laureates in their armory. |
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I know, I know, I've got verbal or posting diarrhoea.
But I'm just so excited by what might just be coming up. |
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"MONEY TREE
04 Jul 11 22:48 the canadian is a gayer imo." Best post of the thread, JW had the better content but trumped by the "brevity is the soul of wit" rule. |
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If nothing else, this thread got the fanboy to lift up his head from his ipad for a few minutes. But I digress.....
Yes, I have some meetings to attend to this morning but I hope to find out the time to respond sometime late afternoon or in the evening. If for no other reason, JW got the Greek situation so bloody wrong, it makes me want to vomit (literally!!!). I will also explain why JW parroting the USG/FED propaganda line of the American economy improving (Michigan, ISM, etc.) is well, how shall I say..... bloody wrong again. Just one request from JW. Please try when posting in the future not to use running sentences and paragraphs that seem to never end. It makes your posts very tough to read. |
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Good on you M.
Don't let it spoil your meetings though. Get your priorities right. We'll all be patiently waiting in great anticipation. Btw I don't think I'd like to be in Money Tree's shoes right now. |
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sorry polybot but if you cant beat them join them, and canadian seems to be so homophobic he is probably a supressed gayer.
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I'm going to let the two people who clearly know more than me duke this out, and see if I can glean some info out of it. However I would like to say this:
Why is Menelaus giving JW sh1t about toeing the big bank/fed line (what he sees as a "bullish" stance), whereas nothing has been said about Menelaus toeing the Zero Hedge line (clearly a perma bear stance (or should that be the "realist" stance?)). Your opening post has pretty much all the same info that I have read over on zero hedge menelaus. Remains to be seen who is right, and we might not know for a while yet. |
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JW, first let me say that I don't mind responding, I was never one to run away from a "intellectual challenge", but if we are to continue doing this (and keep FAFH entertained) then you have to start applying some critical thinking to your posts. I don't mind, but finding this kind of time to put together a well laid out rebuttal simply because you just finished reading the latest FED "central planning" propaganda piece in the Financial Times and decided to post about and present it as gospel is becoming onerous and also rather time consuming and boring.
I'm getting a little tired of you parroting the USG/FED "we're in recovery" party line especially since I have addressed that fallacy numerous times before, and especially since it appears your understanding of the American economy never seems to go beyond the headline. At the end of the day, you can believe what you want to believe, I'm quite comfortable with that, I'm here to state my case, hopefully make some posters aware and move on, not to engage in endless debate to try and convert people to a my way of thinking. It's not my money everyone is investing/trading on the markets, it's theirs, so they can do as they please. This is a good day to post my rebuttal, the economic data released in the US this morning both came in worse than expected. May Factory Orders came in at 0.8pc missing expectations of 1.0pc and Durables (excluding transportation which is a far more important number since it strips out this very volatile segment) was revised lower from an initially expected 0.9pc, subsequently revised to 0.6pc to now printing at 0.2pc. I won't harp on this since you didn't have access to these numbers when you put up your posts but I do need to ask........where's the recovery? Just to keep the debate focused and for the sake of brevity, I will concentrate in addressing two things: Greece & the legitimacy of your claim that the markets rebounded as strongly as they did on improved economic data (Michigan & ISM). First the economic data. It's amusing that you posted that the Michigan consumer confidence survey was a "strong" reading. That's what prompted me to post, "I'll respond when I stop laughing". Perhaps the reports that you read were different than mine, or you simply got carried away with your exuberance to argue the "I told you is only a soft spot" point but the Michigan survey printed at 71.5 missing expectations of 72.0, meaning consumers are now less confident despite steadily declining petrol prices. So much for the consumers themselves feeling we are in a soft patch. Consumer sentiment worsens in June as outlook sours http://finance.yahoo.com/news/Consumer-sentiment-worsens-in-rb-266703697.html?x=0&sec=topStories&pos=main&asset=&ccode= For the record, I had no idea that the ISM was the main economic indicator to keep an eye on for an economy, nor did I know that it has a high correlation to the lagged SPX over many years. I'm glad I run into a someone as sharp as you on the forum of a gambling website to point it out to me (I hope at this point that your sarcasm meter is working) before I suffer some serious losses in my investment portfolio. I find it amazing that you are aware of the high correlation of this indicator and the market, yet you fail to connect the dots in figuring out that this is PRECISELY the number the FED needed to fudge in order to manipulate the market higher. I don't question then number was massive beat, what I question given EVERYTHING ELSE we are observing, is the number REAL? Let's have a closer look. Employment in the report increased strangely enough from 58.2 to 59.9 DESPITE consistently initial claims ( 12 consecutive 400K plus claims reports) and NFP printing worse than expectations and also always it seems upward (worse) revisions for the preceding reporting period. Prices dropping from 76.5 to 68.0 DESPITE CPI numbers edging up the other way. New Orders increasing from 51.0 to a massive 68.0 DESPITE a collapse in corresponding metrics in all the regional FED surveys turning negative. Also, the US ISM is miraculously indicating recovery when every other global growth is slowing. Manufacturing growth data from China is slowing down (weakest level reported since 2009), the EZ slipped to an 18 month low with only Germany not indicating contraction but even at that it was their slowest pace of growth in 17 months. Colour me a skeptic but the ISM number don't pass the smell test. And here's the big kicker, hidden in the bowels of the report, Inventories went up from 48.7 to 54.1. Which means that if you took the difference between ISM Inventories and ISM New Orders, the implied ISM number is below 45 which makes is a huge miss and we're back where we started, a contraction. Where's the recovery? If you don't believe me, here's what the masters of the universe over at Goldman Sacks had to say in their note to clients: "The ISM beats expectations and rises in June. The details of the report, however, were weaker than the headline as more than half of the headline increase was due to an increase in inventories The Institute for Supply Management (ISM) rises unexpectedly in June, up 1.8 points to 55.3. As the median forecast and ourselves had looked for a decline, this is clearly an encouraging upside surprise. The composition of the report, however, was on the weaker side. Specifically, a sharp increase in the inventories index (from 48.7 to 54.1) explained 1.1 points of the 1.8 increase in the headline index. If anything, an increase in inventories is a negative for future activity. The remaining 0.7 point of the headline increase was due to small increases in new orders (by 0.6 point to 51.6), production (by 0.5 point to 54.5), supplier deliveries (0.6 point to 56.3) as well as a more sizable increase in employment (1.7 points to 59.9)." At any rate, manufacturing improving, even if it was real which is not, is not enough to recover the US economy now. The cutbacks that in the pipeline at the State and local level massively dwarf the manufacturing gains (the layoffs in the public education sector are staggering). Unemployment claims have only one way to go and that's up. JW, I can go one and talk about the US housing market entering a double dip, about their auto sector piling up inventories (they are building, but they are sitting on Dealer lots), about their structural employment issues that haven't been dealt with, about hitting the highest ever number of people on their food stamp program, about aggregate demand falling off a cliff with consumer spending and capital spending plunging, about their massive budget deficit but my post would grow from being a short essay to a small book. All lead to the same question.....where'e the recovery? Next up, Greece. It will have to be a separate post however due to the lateness of the hour. To be honest though, I simply can't afford to be spending this kind of time responding to every bit of nonsense someone decides to throw on here and hope it sticks. And quite frankly in your case JW, you posted so many strawman arguments, so much misdirection, so much rubbish about the Greek/EZ situation, I'm having a hard time deciding where to begin. A crime is being committed against the Greek people (not their corrupt politicians and kleptocrats, I could care less about them), in full public view right in front of your nose, all for the "greater good" of seeing an ill founded, ill conceived, ill executed concept of a common currency called the euro survive and you are....applauding!!! You should be ashamed. I'm truly appalled, it reminded me of Lord Young arrogantly telling us to "suck it up - you've never had it so good". As a general comment JW, you are by far the number one poster on here who demonstrates a blind faith in the system. You believe and present every published "official" number as gospel. In your view, every published "official" number must be true because the government says so. The government would never lie, would they? As a result, you consistently come one and try hard to impress by regurgitating that party line that all of us who have an interest in following this stuff already know by then from reading the financial main street media. I would be more impressed with you in the future if you applied some critical thinking to your posts, if you researched beyond the headline you are parroting, if your view reflected reality in the organic economy, not the make believe wealth created by the FED in the paper markets, if quite simply you did exactly what you ironically enough accuse me of doing (in a negative sense), that is posting.......MY OWN OPINION. Yes, I haven't forgotten, I wouldn't dare leave without addressing your question. I was not ignoring you, I simply believed that you are capable of doing your own research, at least at a rudimentary level, without me having to post sources all the time. If I had to source every bit of information I posted on this forum, I'd have to give up my regular job and do this on a full time basis. But since we've come this far, allow me to help you. Very simple, go to the "big banks" websites and look up their SEC filings. Alternatively, google is your friend. Here's some examples of what came up after a couple of quick searches: Bank of America Had Perfect Trading Period in First Quarter - Businessweek http://www.businessweek.com/news/2011-05-05/bank-of-america-had-perfect-trading-period-in-first-quarter.html JPMorgan Joins Bank of America in Perfect Record for First-Quarter Trading - Bloomberg http://www.bloomberg.com/news/2011-05-06/jpmorgan-joins-bank-of-america-in-perfect-record-for-first-quarter-trading.html Since I spent all this time responding instead of shaking my head in disbelief and just walking away, I do want to leave you with a take-away: wake the f@#k up, the biggest manipulator of the markets was, is and will continue to remain......the FED. So I've learned over the years not to fight the FED in order to be on the right side of the trade but never once did I mistake the FED's meddling in the markets as real organic growth force fed (no pun intended) to the public with bogus and manipulated "indicators" that you love so much to quote. Peal the onion, look beyond the surface, it might change your perspective on how you see things. |
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Just checking in quickly and I see that I am going to have to free my calendar up somewhat to make the necessary time to read and take in M's latest posting in detail.
Looks worth the effort though summarily. As i said you cannot fault M for effort. Mind boggling actually. The guy must be an absolute workaholic. But you have to be in the business he's in, if you want to succeed at the highest levels. |
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Btw M do you post at all on any of the actual sports gambling forums ?.
I would be most interested to hear your views on all the current PC imbroglio, particularly as it appears that you are a specialist in corporate finance at the highest senior mgt. levels. Is BF doing a rational, intelligent thing here, or is it shooting itself in the foot ? |
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If you are inclined to opine on this matter, then I would suggest you do it though on one of the dedicated threads currently running on the general betting forum.
Just don't say you know me for God's sake. That wouldn't be a wise move. |
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As usual melly has a bit each way, so that no matter which way things go he can "claim victory."
melly berates JW As a general comment JW, you are by far the number one poster on here who demonstrates a blind faith in the system. You believe and present every published "official" number as gospel. In your view, every published "official" number must be true because the government says so. The government would never lie, would they? As a result, you consistently come one and try hard to impress by melly tell JW he has blind faith in the govt figures and that to do this is wrong.  then melly uses the same govt figures to claim that HIS argument that the sky is falling in is the right one. This is a good day to post my rebuttal, the economic data released in the US this morning both came in worse than expected. May Factory Orders came in at 0.8pc missing expectations of 1.0pc and Durables (excluding transportation which is a far more important number since it strips out this very volatile segment) was revised lower from an initially expected 0.9pc, subsequently revised to 0.6pc to now printing at 0.2pc. I won't harp on this since you didn't have access to these numbers when you put up your posts but I do need to ask........where's the recovery? either the figures are to be believed or the are not. As usual melly u are having it all your own way in your desperation to be superior. You took all the effort to post an epic response to ranting about the ultimate manipulaor the FED, but you cannot post a single trade? Pretender. |
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thanks for the reply menelaus. i ll try to keep it v short.
the main difference between me and you is not that i believe the fed and you doubt it. i really dont care to know wheter the fed is lying or not. as the main difference between me and you is another one, and i ll repeat it over and over again. there are people who believe in the existence of a true price, given by the intrisic value of something. and there are people who believe in the prices being mainly the result of demand and offer. the 1st lot are known as analysts. the 2nd lot is known as traders. so here we go: by formation you re an analyst - now climbed all the way up to directorship of an m&a boutique, but still an analyst. so you believe in intriscic values. my formation is different, although we have similar academical background. i was raised a market maker ( hence my stress on demand and supply and the value of liquidity ), and now im running a prop desk ( and we ll come to the difference later as you re very confused about it ). still, im and i always been a trader ( or if you want now, an investor ). in my original comment, i mentioned the fact that the ism being good the market had hopes/feelings/convictions of a soft patch rather than a double dip. maybe i should have explained it better, but what i meant was: there are people now who hope, there are other who feel, other who are convinced we re due a recovery ( see the scaling up?). wheter im in one of these or not is meaningless. i was trying to explain why the market rallied, because this is exactly the exercise i do at work every moment, trying to see what move people to act in specific ways. and thats the only way to trade successfully, trust me. lets take your ism example. assume you re one of my analyst at work and come back one minute after the release and explain me that in fact the number is only slightly better than expected. shud i go short then, i would ask you...yeah wd be your reply, it s a rubbish report only inventories rose. after a rally of 10 pts in the spx i wd ask you again, and you wd try to convince me again that the fed have manipulated the number. another 10 pts rally and i wd be sure in the future to use you as a reverse indicator ( trust me, this is how things work on a trading floor ). is the fed manipulating the numbers ? most likely. but if the market trades on those releases as genuine, there s almost no point in doubting. think of a traffic light, we all know to go thru with green and stop with red rite? but lets assume you wake up tomorrow and you realize everyone is doing the opposite. you can think everyone is crazy and wrong, you might laugh at the idea of such a confused system, but how many cars you want to go thru before adapting? think of trading the same way, every morning/year/cycle i only try to understand what colour people are ready to cross the road with. [ of course the other thing you need to understand is that market expectations is not what bloomberg consensus is. else you demonstrate: 1- that you dont know when and how this consensus estimates are made and 2- that you believe that analysts consensus is more important than traders/investors/fund managers expectations/worries/fears. have you ever wondered why you could have massive price movements even in absence of an upset in the release of a statistic ( take for example the Mpc and price of sterling or sonias every time we have the release of an "expected" unchanged rate in the uk )] if you dont mind i ll leave the greece story behind, we re going to start a new conversation about the euro as a project and it would be of monstrous dimensions. we all agree greece is in trouble ( with a 75% chance of bankrupcy ), we disagree on what shud have been the latest move. again, i dont want to give a personal vote of confidence to the eu/imf decision, but i was just explaining that the market indeed gave its thumbs up. letting greece default on wednesday would have been calamitous for the banking stocks, and for the banking system in general ( think how exposed are the deut or the paribas of this world ), for prospects of growth everywhere in the world ( think lehman in 08 ), and for public order. look at the share price of the above banks and see what i mean. if you dont mind we even going to avoid commenting on the price action of gold, i guess from the fact you didnt comment my previous post you finally found someone explanation on something valuable ( your understanding of the market moves as described in the 1st post was rather funny and unsophisticated, typical of someone who dont know the basic mechanics ). lets concentrate tho on the banking trading profits. you posted the link, this way thinking you got out scot free. what a pity in none of those articles its mentioned the word 'proprietary'. making up factoids and pass them for facts is a habit for people with weak arguments. it does sound better to write down: You may argue that I have no way of proving this thesis, that it is all a conspiracy theory. You could argue that but you'd have a tough time explaining to me how Citi, JPM, GS & BAC only had one losing day at the prop desks, all four banks COMBINED, during the last quarter. What is that, a nine sigma event? ah, if only it was also accurate, but why spoil a good story? of course, it could also mean that you have no idea what trading and what proprietary trading mean (the 1st being the revenues a whole trading floor generate, ie client activity accounting for 90-95%, by definition always positive, ffs there s even mention in the article of 'fees'! ), at the end of the day you re in corporate finance, so you re not supposed to know all of this. although some common sense could have made you doubt i guess( 100pct of positive days? 5 bion in a quarter?? sharpe at 1,000??? proprietary return on equity above 100%???? who are these wizards?????) so i give you the benefit of the doubt and pretend you just got confused. the fact you could have done it on purpose to put some extra weight behind your story, this is what would make me vomit. by all means, keep posting your story, i always find them interesting and some time i even learn something new. if you learn to do the same with other people comments and ideas it s your own decision. good luck, jw. ps: i never, never read the ft or alphaville. |
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Oh God thank you very, very much.
This interchange between M and JW is just abslotutely delicious and enthralling. You know I really think there might even be a movie in all this. No seriously this is earnestly really good stuff. I sincerely don't want it ever to end. But unfortunately given both your high level job responsibilities, I can't see how it can continue at this heavy pace. I'm reading a book at the moment by Roddy Boyd called " Fatal Risk" and your interchanges are so good that it has made me defer my reading of that today. And that is really a compliment, as I can hardly put that book down to go to sleep for a while. I really do wish I could contribute meaningfully to the debate you're having. But my academic qualifications and finance experiences absolute;y pale in comparison to you two and I would just embarass myself. I can ( just) about follow most of the debate though, so that will have to do for me. But I can tell you for a fact, I'm learning a lot from both of you. The entrepreneurial, go for it streak in me finds JW's views more intrinsically appealing, but the deep down fundamentalist in me finds M's arguments equally compelling. Congrats to you both for posting such high quality and superbly entertaining content. |
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Considering all the time I put into this, VERY DISAPPOINTING rebuttal by you JW.
I took your "its a soft spot, look at the indicators" position and blew it out of the water with analysis and hard data and the best you can do is come back with "may be I should have explained it better". Well, may be you should have because your original posts just turned into ashes. I have news for you. The equities markets are no longer a price discovery mechanism. If you are okay with that but continue to trade with the flow then one day soon you'll discover that price discovery matters. If you believe illusion is real because everyone else believes is real, then good luck to you. You'll have a rude awakening soon. I don't know what work you do, nor do I care. I posted this before, I'm in M&A responsible for the US market. So when I sit across from the table from a client trying to promote a deal and he asks me what I think of the state of the US economy, I can't regurgitate the party lines that you keep posting on here an are so wrong. They already know that from reading their morning daily. I have to tell them the truth which happens to be strikingly different than the illusion. If I don't do that, I'll be left with no clients in short order. At any rate, I'll repeat with what I said in my earlier post, impress me with an original thought, not with parroting what I already read and know. So far, I must admit despite all your hubris "I'm a market market, therefore I KNOW" you've done nothing of the sort. Good night. |
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Btw boys I've just alerted the general betting forum on your debate.
I really do think you need a bigger and better audience. Two comments only really so far, one from two lightweights such as Benny and me. A poor state of affairs. PS Not ignoring you Maximum, but you get my point I hope. |
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+ ---- so far, both from two lightweights --- "
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Fwiw another lightweight observation/comment on this intriguing spat, is that one would expect the " analyst " ( being M) to be the one with the long fuse and cool, even temperament and the " trader " (being JW) to be the one with the short fuse and hot, volatile temperament.
In fact it appears, to me at least, that we have the polar opposite on display. |
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melly
I'm in M&A responsible for the US market. So when I sit across from the table from a client trying to promote a deal and he asks me what I think of the state of the US economy, I can't regurgitate the party lines that you keep posting on here an are so wrong. just wondering melly if you fully inform the client that you sold out at the absolute bottom of the market? since your such an honest guy i guess you always do this? . I have to tell them the truth I'm surprised you could actually spell that word. |
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JW, I reread your last post and your arrogance has no bounds for someone that just became a floor mop. Strange how you accuse me of that.
Your first response should simply have been "We program our algorithms to react to headlines. We don't understand what's behind the headline nor do we care since all brainless hedge fund managers do the same. But at least this way when the market moves, we move with it". And stop at that. This was posted in your original response "i actually warned you and others here that the previous drop of 6pct points was way too big and was due a rebound, it was probably the easiest forecast to make if one knows how the ism is compiled and recorded" As it turns out, you are the one who apparently had no idea what the survey really said beyond the "buy the market" headline. You acknowledged the weakness in the data ONLY after I pointed it out to you. This is how a debate ends. One poster concedes that the other is right. In your case you've done it unknowingly. Here's what you posted: "is the fed manipulating the numbers ? most likely. but if the market trades on those releases as genuine, there s almost no point in doubting." Here's what I posted in the original post : Here's the crux of the matter: "The FED is trying to create the illusion of recovery WITHOUT THE INFLATION" Also, " "the markets have dislocated from the real economy" and "don't fight the FED" It's pretty hard not to come to the conclusion that you have come full circle and embraced that "funny and unsophisticated" position. Don't bother responding. I'm getting a little tired of trying to debate positions that keep shifting in the wind. You can go on posting "what I really meant to say was" forever. P.S. It must be hell for Benny trying to read these posts, he's probably starting to think they are written in chinese. |