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Desperate "Risk On" Brigade Gets A Morgan Stanley Reinforcement
The most recent "it's time for risk on" note from Morgan Stanley is pure comedy defined. Jim Caron is now openly fishing to try to get any last remaining greater fools into the HFT shark infested swimming pool. The punchline: "front-end risk metrics remain stable, as 3m Libor sets slightly higher at 0.537, which is actually lower than was expected on Friday. Tactically, as a result, I think the time is ripe to put on risk right now." The salvage attempts by the TBTFs are becoming a surreal Lewis Black skit. Oh well, one always needs to goal seek "better then worst case data" to fit with the imminent risk on reversal. Looks like gold longs got the memo and saw right through it.
Full Caron note:
There has been little impact on our SignPosts of Risk since Friday's weak performance in risky assets. This is good news because it tells us that Friday's move may have been more driven by technicals/poor positioning rather than increased pricing of new risks, or an increase in the old ones. Reading into this further, and barring any new events, we would expect a slow and cautious recovery in risky assets. Tactically, as a result, I think the time is ripe to put on risk right now.
Front-end risk metrics remain stable, as 3m Libor sets slightly higher at 0.537, which is actually lower than was expected on Friday. The markets continue to focus on the Hungarian budget deficit and Hungarian 5y CDS remains at similar levels as Friday's close (416). Also yield curves have remained relatively stable/unchanged to start the week. Only Ireland is the exception with its 2s10s curve flattening 11bp flatter, but mainly driven by a higher rate on the 2y, not lower 10y rates. Remember, flattening as rates decline is bad (risk-off), steepening as rates rise is good (risk-on).
- 3mL set slightly higher at 0.537 which was lower than expected. 3m Libor - OIS remains the same at 31bp, and the 3m FX-implied Libor is 1.5bp higher at 1.09%
- Greece CDS is up 24bp, although liquidity is likely thin.
- Ireland 2s10s curve has bear-flattened 11bp, driven by a move of 12bp on the 2y bond.
Things to Watch For: This week has a heavy sovereign bond supply issuance calendar. People will focus on these European bond issuances to see how well they go in the market. If these auctions go well, then it will be a confirmation of the 'risk-on' signal.
Good point Jim, we will certainly be looking at the "heavy sovereign bond supply issuance calendar." Alas, we are worried the outcome will not be quite as rosy as expected.
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Less worse is the new normal, apparently.
Come on in. The water is fine and temprate. Oh by the way, let us (Morgan Stanley) be your brokrage house so we can sell you all these wonderful stocks that are going to shoot to the moon. Speaking of which we have lots of "cheap" BP stock we would love to sell to you at a discount.
Here's the unadulterated Merrill Lynch party line. Investment ideas? PRivate placements, mutual funds and closed end funds? It's the asset gatherer's mantra (if I embedded it correctly):
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Here you go:
All the pump monkeys have been programmed to see QE 2.0 after elections.
Now there's a tell ;0)
Every lie she tells is topped off with a smile.
Obviously she is aware of the BS she tries to sell the public.
LMAO
Here's some investment advice for Melissa "Braces"...
MILF??? ;0)
holy bullshit
What drivel! Yeah, lets continue to do the things that made our clients lose... after all, we always win. I look forward to the day when she joins the unemployment line with the Morgan Stanley losers. Fortunately for her, with that mouth, she can always go back to her original profession.
GS, MS , now some dude calling himself Farrell - all screaming to the sheeple who are abndoning equity funds in droves " come back, come bak, we need.. need .. you .. for our bonuses". Looks like the sharks are sweating a bit - as the prey are all swimming away .
The equities Ponzi has been discovered. The asset managers have painted themselves into a corner on this one.
And where there are no more scared shorts left to squeeze and no more longs let to buy the hype and no more economic stimulus programs to falsify numbers and every second is a tick nearer to elevated rates they will begin to cannibalize themselves. When that occurs 300 downdays will be a picnic.
Meanwhile hedge funds are able to pick the big banks apart because they are not subject to the same regulation and oversight. Meanwhile Bernanke will have to raise rates at Dow 8000.
Do you realize this is like a play, a multi-act drama, being played out in front of eyes daily? Started as a Greek tragedy, moving through each country with a sense of inevitability that we can clearly, yet oh-so-slowly see......
It's somewhat exciting in a dark sort of way.....
As john_connor coined the phrase, "Greek Shoots!"
Hey, wasn't John Connor the hero from terminator?
Yes. He posts here too. :D
Thanks, Tyler. I didn't get that embed thing straight. This is such a cynical piece. What a dryad. It's all a chance to asset rebalance! Bring those allocations up to form! If equities are cut in half, then you need to rebalance by selling safe holdings and bringing equities back up to correct weighting.
The only question in my mind is whether there is firm support at the 1968 levels ( inflation adjusted) of SPX 660 .
Because i do have some cash I raised selling stocks back in 1968 and would like to redeply them at a cheaper level than where I sold them - hehehe.
" Barring any new events " it's titties and beer time and all is good...!!!
Thought the same. It's tight shirts for all on CNBS.
Boobflation nation
MS: Please keep our desperate ponzi scheme going America! We know we screwed you over, loaded you with debt, shipped your jobs overseas and forced you to pay our billion dollar bonuses and we also control your douche bag government. But hey! Someone has to do it, right?
NoNo cash flow = minsky moment = death spiral to death, DUH! Short Financials all the way to ZERO.
"shipped your jobs overseas"
as an example, FOXCONN (iPhone & iPad) just gave their Shenzhen employees a 30% raise, with more to come in October, yet assembly workers will only be getting 2000 yuan ($293 US) a month at that point
Since the strategy in HFT is to get out as soon as you get in, what is a tactical timeframe in HFT?
More from the Barron's video interview:
Q: "Allyssa, what types of vehicles are you considering as clients attitudes evolve towards risk and liquidity?"
A: "well Matt, the vehicles I'm considering are an Mercedes SL65 AMG, or a Porsche 911 GT3. Both of these vehicles would meet my needs and liquidity situation"
+1
...and in other exciting news...
"
Iran has warned that it could send Revolutionary Guard naval units to escort humanitarian aid convoys seeking to break the Israeli blockade of Gaza – a move that would certainly be challenged by Israel.
Any such Iranian involvement, raised today by an aide to the supreme leader, Ayatollah Ali Khamenei, would constitute a serious escalation of already high tensions with Israel, which accuses Tehran of seeking to build a nuclear weapon and of backing Hamas, the Islamist movement that controls Gaza.
"Iran's Revolutionary Guard naval forces are prepared to escort the peace and freedom convoys that carry humanitarian assistance for the defenceless and oppressed people of Gaza with all their strength," pledged Hojjatoleslam Ali Shirazi, Khamenei's personal representative to the guards corps."
http://www.guardian.co.uk/world/2010/jun/06/gaza-blockade-iran-aid-convoy
Wow, bad idea for Iran - in case they haven't noticed, Isreal isn't in a "fucking around" kinda mood these days...
Want truth? Some real truth? The markets were back to 1968 levels in 2009 march ( inflation adjusted). Average sheeple , on average basically made no money on average over the last , oh, 40 years. But Iam sure the ML "investment consultants" did pretty well.
I smell layoffs coming this summer at Mother Merrill, Smith Barney and other superfluous ticket scalpers. That will put an additional chill in.
This should be a '70s style summer market with abject apathy as a backdrop to anxious sell spikes and the real possibility of major shocks.
PR damage control will be the order of the day from on high and ringing through WS C suites. Hence the new "The Strategy Session" segment unveiled today on CNBC. In a cheap plug for how rosy things have gotten at MS John Mack did a non-stop hard sell for risk on and "the fundamentals of our bank are sound". Yeah right. Meanwhile mortgage delinquencies rose to grotesque new levels. Existentialist theater with masks.