The T Report: The Road Not Taken
The Road Not Taken For the past 5 years, I have had to listen to how every “instant gratification” strategy employed by the government or the Fed has been the right decision. The justification for so many policies has been “it would have been worse otherwise”. That seemed to be the only test of a […]
The T Report: Greece Needs to go “Dirty Harry” On the Troika
Go Ahead, Make My Day Greece has negotiated like the Clint Eastwood that spoke to an empty chair for 10 minutes. It is time to bring out the Dirty Harry. Point a magnum at the Troika and tell the “go ahead, make my day’! Greece has been asking for money in some form or another […]
Vix – Seasonality may be making VIX look more complacent than it is
I’m hearing lots of concerns that VIX is low so the selling isn’t over. It is definitely lower than it was pre-election, but that makes sense as a big one time outcome was taken off the table but could be a sign that there is complacency. It is still higher than where it was post […]
The T Report: Choking on Debt
Many Names for the Same Problem In the U.S. we talk about Fiscal Cliff and Debt Ceiling. In Greece it has come down to Grexit. Spain still goes by Spanish Bailout or Spanish Unbailout as the case may be. Italy is in denial and hasn’t made up a word. Belgium calls their debt problem Dexia. […]
CPDO’s – Yelling Fire in a Crowded Theater
Ratings and Rating Agencies Before going into the details of how CPDO works, it is worth talking about rating agencies, what they are, and what they do. I think in most cases they do a good job, yet I would never rely on them. I think their “single name” issuer ratings have had a pretty […]
The T Report: A Time to Think & 5 Key Issues
Time to Think Last week was a feeding frenzy for algos and a disaster for those who were poorly positioned. Crowded complacent trades were pummeled, including, or especially, investment grade CDS. But now we have had some time to think about what happened and the markets seem calmer. On this bond market holiday, let’s just […]
TFMkts Weekly Fixed Income Summary and Portfolio Allocation Strategies
Risk Off This was clearly a “risk off week”. Unlike equities which started the week well, credit markets didn’t even start the week well. They did join equities in the post election and post ECB sell-off. The decision to switch from a more aggressive risk taking position to a more neutral position made sense. Treasuries […]
Fixed Income Strategy Allocation Update
Fixed Income Update In “core” cutting BAB from 20% to 10%. Raising HY to 30% from 20%. In “traded” cutting BAB from 20% to 0%. Taking HY back to 30% up from 15% last week, and 20% from when we added earlier this week. Adding a 5% allocation to Investment grade. In “aggressive” selling BAB […]
The T Report: A 200 DMA Breech with 66% Fib & IHS + Wave C
Algos Gone Wild There are a lot of reasons for the markets to be doing what they are doing this week. The election and the situation in Europe are chief among those reasons. Yet I can’t help but think that positioning remains the biggest problem (I will post my “crowded trade” memo from last night […]
The T Report: Just Another Manic Thursday
What Next? There is a lot of concern about yesterday’s move. I think they are wrong. We have had several large moves in the past week (greater than 0.75%) and have had reversals the next day. In most cases, the reversals themselves were large moves. It is hard to get extremely bullish here with everything […]