The T Report: What do you Buy for the Country that has Everything?
The Fed Wants to Know What You Buy for a Country that has Everything? We need an increase in real final demand. That is what will turn our economy around. Unfortunately, real final demand generation isn’t one of the tools in the Fed’s workbox. Asset buying is. That is all they really have left, next […]
Corporate Bonds, ETF’s, and Feedback Loops
The Feedback Loop Between Corporate Bonds and Their ETF’s This has been an occasional theme for us, but after some conversations last week, think it warrants a deeper look. The various parties interacting in the market have become more correlated and the relationships more intricate. The growing use of ETF’s by institutions is a key […]
The T Report: The Rule of 3
The Rule of 3 This is a simple little rule that could also be called the “by the time your mother knows it” rule. It certainly isn’t an exact science, but it seems to work. The premise is that by the time everyone “knows” something will happen, it doesn’t. That the first time something happens, […]
The Weekly T Report: Heart, Head, Gut
I had a strong, even visceral, reaction to the Fed’s announcement Thursday. I was wrong in that I thought they would back down with stocks at highs, housing showing some signs of stability, high gas prices, some real potential ECB intervention in Europe, etc. I was wrong. I was also wrong when I thought the […]
The T Report: The Carrot and The Carrot
Two Carrots Don’t Make a Stick I’ve always assumed the adage about a carrot and a stick had something to do with donkeys specifically, but was a great way of summarizing reward and punishment. The “carrot” was the reward. You dangle the carrot as a reward for good behavior. The stick was there to punish […]
The T Report: Black Swan Thursday
I just can’t talk about QE anymore. In a few hours we will know what we get and I don’t think anything is going to happen between now and then to change my view. My base case remains that the Fed delivers an incredibly dovish statement and may even introduce some “targeting” but will not […]
The T Report: Two Ships Passing in the Night
German Court Ruling Good For Europe Risk My Plausible Bear Path yesterday took a dent today with the German Federal Constitutional Court ruling. As in the e-mail that sent out in the immediate aftermath, this ruling was good. There were no real conditions. The condition is that to expand beyond the current €190 billion would […]
The T Report: A Plausible Bear Path
I’m bearish, but I’m not expecting or looking for a big move down. It is more that I think there is a greater chance of asset prices declining from recent levels, than going up, and some small chance the decline cascades as bullish sentiment has grown. The Bear Path I see the potential for a […]
The T Report: The Bernanke Put is now the Bernanke Call?
It is a very dull start to the week with markets fractionally weaker across the board. European bonds are all a touch weaker. CDS is wider in sovereigns, MAIN, IG, and HY. S&P futures are down a touch as IBEX “leads” the way lower in Europe – but even that is down less than ½%. […]
Fed Holdings – Robbing Timmy to Pay Timmy
Fed Owns 19% of all Treasury Bonds I focused on bonds issued by the Treasury that pay a fixed rate coupon. I didn’t focus on t-bills, as the Fed seems far less involved in those, and they all yield zero anyways. I didn’t include TIIPS for now, because the distribution, off-hand, looks similar, they are […]