SPX - WTF!- Which Way is UP? TBD
Mis à jour
BLUF: I HAVE NO CLUE…SEP-OCT Pullback, Santa Run, Melt-Up or Melt-Down…its a typical sideways market where lines are unpredictable due to “Uncertainty and Incompetence” TBD…Please folks keep a reserve (Portfolio: 50/50 Risk On/Off)
RANT:
Most People/Investors operate/think at the level of “What-They-See,” but the “Real Power-Hierarchies” operate in between what we see and believe…you cannot see them/it! Technology has made the most ignorant relevant i.e. the Fed along w/the zombies. The Central Bank Wizards and political environments could not look more stupid, even if the Special Operations trained them to combat stupidity.
Does debt matter in this low rate environment? How do you kill Zombie Corporates in a ZIRP environment? (Head shot.. always a head shot.)
Market interest rates, in some sense, tell us how productive investments truly are at a point in time. All of the problems listed above are manifestations of an economy that is not producing sufficient total return…how bout the rest of the world? The laws of physics distribute the problem to many areas of the economy, simultaneously. (Tverberg)
Our debt-based financial system needs growth to continue. It is not a Ponzi scheme, but it has the same problem with not being sustainable without growth. The inability of the financial system to continue without growth becomes a separate risk factor to the economy, greatly magnifying the effect of even a slight long-term slowdown. The need for growth is the reason why central banks are working so hard to get economies to grow again.
If it was Easy, We Would Not Be Doing This…The Only Easy Day was Yesterday! Cheers! Fall is here…FirePits and Cold Beer!
RANT:
Most People/Investors operate/think at the level of “What-They-See,” but the “Real Power-Hierarchies” operate in between what we see and believe…you cannot see them/it! Technology has made the most ignorant relevant i.e. the Fed along w/the zombies. The Central Bank Wizards and political environments could not look more stupid, even if the Special Operations trained them to combat stupidity.
Does debt matter in this low rate environment? How do you kill Zombie Corporates in a ZIRP environment? (Head shot.. always a head shot.)
Market interest rates, in some sense, tell us how productive investments truly are at a point in time. All of the problems listed above are manifestations of an economy that is not producing sufficient total return…how bout the rest of the world? The laws of physics distribute the problem to many areas of the economy, simultaneously. (Tverberg)
Our debt-based financial system needs growth to continue. It is not a Ponzi scheme, but it has the same problem with not being sustainable without growth. The inability of the financial system to continue without growth becomes a separate risk factor to the economy, greatly magnifying the effect of even a slight long-term slowdown. The need for growth is the reason why central banks are working so hard to get economies to grow again.
If it was Easy, We Would Not Be Doing This…The Only Easy Day was Yesterday! Cheers! Fall is here…FirePits and Cold Beer!
Note
Sept 19, 2019-Fairly subdued FOMC day. The Fed cut 25 as expected and trimmed IOER, but neglected to institute QE. The NY Fed announced a 75b repo operation the third day in a row for this morning to satisfy funding requirements. The euro$ curve flattened, with EDZ9, H0 and M0 all closing down 0.5, while EDZ0 back rose 0.5 to 2.5. October FF settled 9811, but quickly traded down to 9810 after settlement, a signal that funding issues linger. I had calculated a final settle of 9796 for FFU9 on an ease, but it stubbornly remains 3 bps lower at 9793. The market wants QE and buybacks. Powell referred to “organic” balance sheet growth, but that’s not satisfactory. It’s possible that QE could be re-started before the next FOMC if quarter-end is sloppy. MSFT obliged on the buyback part with a program of $40 billion. FDX plunged 13%, supporting the narrative of slower global trade and growth, yet UPS and EXPD remain close to recent highs.
–Implied vol eased. EDZ9 9800 straddle eased to 22.5 from 24.5 on Tuesday and EDH0 9825^ from 36.5 to 34.5. Late buyer of 20k EDZ9 9825/9837/9850/9862 c condor for 0.75. Nov FF settled 9822, so the market still sees odds for another ease at the end of October at around 40% (assuming a new Fed Effective of 1.88%).
–Today’s news includes Philly Fed expected 10.5 vs last at 16.8. Jobless Claims, Leading Indicators and Existing Home sales, expected 5.38m, round out the data. October treasury options expire Friday.
chartpoint.com/wordpress/2019/09/19/fed-steadies-the-market/
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