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Here We Go
Does anyone even wonder what will happen with tomorrow's NFP report?
From the Advisory on Interest Rate Risk Management:
The financial regulators1 are issuing this advisory to remind institutions of supervisory expectations regarding sound practices for managing interest rate risk (IRR). In the current environment of historically low short-term interest rates, it is important for institutions to have robust processes for measuring and, where necessary, mitigating their exposure to potential increases in interest rates.
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Boy, that was good for a 0.1% selloff in banks before they resumed going higher. (I'm looking at you, JPM)
hehe a little 3 p.m. headline just enough to tank the futures for a buying opportunity.
Just removes any doubt people had that US Regulators are worthless and not to be taken seriously in any way.
I do.
Somebody please to essplain.
Massive upside surprise on the NFP # tomorrow, leading to the obvious, and correct conclusion, that this zero interest rate sham needs to be ended immediately.
10's down a point and half tomorrow.
Banks in the U.S, what risk? Hello Ben and Tim.
Soon to be Ben and Chris!
Banks in the U.S, what risk? Hello Ben and Tim.
Banks in the U.S, what risk? Hello Ben and Tim.
BTW - FAZ is getting hammered today, any reason apart from the risk failure for banks is practically zero.
Banks are being gunning into Jan Op Ex with reckless abandon. Any shorts left in them?
Shorting with all this liquidity around is a good way to go broke. Perhaps March will present some opportunities.
Actually I had forgotten about that XLF gap in Oct. Mission Accomplished?
Interest Rate Swap explosion anyone? Its all fun and games when the derivative tail has been happily wagging the dog until the tail breaks off.
The dollar could skyrocket tomorrow.
The 4X market is 24/5. If it were to happen, it would have happened already. Not a peep.
We are trading under some very, very strange conditions, donchaknow?
It didn't happen (prematurely) the last time when umemployment dropped. It was the day that gold first sold off.
"The dollar could skyrocket tomorrow".
Great!!!!!!!!!, with the Euro going to go down in flames, a correction on Gld/PM's,35%-40% would be a lovely sight indeed.
Back up da truck Moma,add air to da tars.....
Agree. I would buy more physical.
"The dollar could skyrocket tomorrow"
Yeah, some kind of "accident" is going come out of the blue and ruin the party, a stiff belt of dollar launch with a bond market smack down as a chaser might do the trick.
higher rates mean a booming economy! SPY and IYR bitches!!!
damn, should've gotten one of those 5% mortgages...
Ahh the Fed as regulator...offering these pearls of wisdom:
In order to adequately manage IRR, banks should use
Thanks Fed! What would we do without you?
Would you agree that this looks like a proverbial 'memo for file'?
It wouldn't be prudent! Expect the unexpected.
Tyler, you got any new Bloomberg charts with gihugic SPY buys by GS/MS/JPM? Sells?
The Ben 78 DXY Call stands. Between the Fed selling these, and SPY puts - QE is funded for another two years.
Who needs to manage risk when Papa Fed is there to bail us out ??
Look for in excess of +100,000 on NFP # tomorrow.
Has Goldman released their Thursday afternoon estimate yet?
Is it normally around 4.15pm for Jan "The Benchmark" Harzius to release?
Who would have guessed that the proper way to hedge interest rate risk is to buy banks with millions of resets on the cards.
Which raises the question:How many swaps are written by the TBTF,assuming that BB will not raise rates untill we go back to full employment or 2017(which ever comes first)?. And they send Hoenig to taut 3.4% fund rate?. And now with a headline saying that economist fear that we might not see 7 mil jobs back,then that means we wont see interest rate hike. Now I would like to see ZH develope a test (may be in conjuction with Nassim) for those regulators to see whether they understand what they read in spreadsheet about swaps and derrivatives. Or their main function realy is to check the cleanliness of ban's eployees offices...
Maybe release this has nothing to do with the jobs report. Maybe China, Japan and England said no to more Treasury buying.
i'd like to know where japan and england are going to get money to buy treasuries. they need to sell theirs it seems to me!
Se habla swaplines?
Is there enough money in the lines? Or do they just keep shoveling it in there as needed? IIRC Benny got a ration of shyte about that already.
Even I'm getting tired of this merry go round. Yet from .05% on the 1 month bill at the start of the year, we're down to .01%.
0.12% on the 3 month bill to 0.04% in less than a week.
0.2% on the 6 month bill to 0.14% in less than a week.
aren't we all sick of being wrong yet or do you have a particular agenda you're pursuing?
Where's GOLD BITCHES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!?
How about that great call on the 2 year a couple of weeks ago at 1.12% down to 1.02%
We're all wrong and we all know the system is getting gamed real bad right here. Nevermind the divergence in the indices. So, I'm wrong on interest rates so far and so are y'all. Stop sounding like the armageddon is going to start tomorrow and asking everyone if they bought their puts. It's getting kinda sad, just like the Obama doing billboard ads. You're jumping the shark.
Is credit risk adjustments far from a 'recovering economy'. Spend like Zimbabwe creditors want more premium.
The Federal Reserve is spinning more sh#t than Larry Summers on a horse laxative.
Thanks Assetman. That was an image I did NOT want in my brain.
On the other hand, Larry Summers and explosive diarrhea is sorta funny, isn't it? :>)
speaking of whichm have you seen this
http://www.youtube.com/watch?v=RYA0DsPcbaU&feature=PlayList&p=BC624C7996FDBB00&playnext=1&playnext_from=PL&index=30
The 1st Quarter 2010 delusion spin will be epic. It'll make every fairy tale told by Walt Disney look quaint.
heh...they'll keep trying to come up with a 'war' that actually matters more to the sheep than losing their homes, jobs, retirement, and most of their food budget. To add to what you said, that will make Leni Riefenstahl look like Walt Disney. :-)
The lies and spin will increase in geometric proportion to the amount of printing that will become necessary. Housing is slowing, not speeding up. Employment is not improving. 2010 is the year to preserve capital, and wait, for what I do not know. End of story.
lol I know and I'm looking to buy a house this year. Bad timing much?
i know we have all been expecting reality to settle in for a long time now, and I too am losing hope. However, for what it is worth, n a logarithmic chart, GOOG has finally broken down out of its ascending wedge from march, on pretty high volume, the %bulls is now in crazyland, and many of the indices have formed second upward wedges after coming out of their first ones. I realzie technicals maybe dont matter anymore, and maybe it IS different this time, but for what it is worth, there are some signs of a top.
Does anyone think Wallstreet gives a fuck about the unemployment numbers? The market goes up no matter what happens. The machine will make sure of that.
And, lets not forget that the great Barney Frank and friends are about to make shorting against(or near so against) the law! I joked about that idea last year to friends, just pass a law that NOTHING can be sold for less than you paid for it....instant profits, no loss worries, everybody just keeps on partying. As for unemployment, already at 25%, the Government will keep telling America that the numbers are different and America will believe...same as it always was. If the Treasury sells notes to the Fed for more than they are worth, then there will always be plenty of money because they will never default as long as they have a printing press. Pass those Doridos over here, please.
Maybe a dumb question, but who is "U.S." that warned the banks?
Also, does anyone really think they would let a bad employment number print weeks before the SOTU address?
it was the Fed's piece done in conjunction with the other regulators.
They used a lot of fudge on the last report to help push Obama's healthcare, jobs bill, global warming agenda. Maybe they're running low on fudge this month or want to save one for this summer? It is a zero sum adjustment.
I'm not ready to say this yet, but I am feeling it.
Short GLD? I mean, what?
OK... So...
They raise (or don't raise) rates, and the market tanks, because no more easy money.
They raise (or don't raise) rates, the market soars, because we're in recovery.
WTF... Seems like a coin toss to me (I'm out-of-the-know money, but sure as hell not going long stocks except for a trade).
Well, do you believe that the economy is recovering? Or do you believe that the rally has been a combination of short covering and shorting the dollar?
I think they're going to raise rates to keep the Chinese in the bond market. They can't allow the dollar to go to zero as some ZH cronies believe.
The economy is not recovering, and the rally is bullshit.. Crawl back under your rock.
That is unjust, Stoploss.
The post to which you reply does not question or validate the recovery or economy. But it is a sensible premise to suggest that bond returns may be required to rise to keep other Central Banks buying Treasuries.
Ya know, gold does not have to go down if interest rates move up. They can move together. There is much more behind gold than interest rates. And notice today, strong dollar yet all the metals held in very well.
Just look at what is happening in govt. and would you sell your gold because a less flawed piece of crap currency is moving higher. You trust, timmy, barry, benny, barney, chris and sheila, sell your gold. I'll buy it.
I think not.
Correct. Gold performed well during the rising interest rates of late 70s, until real rates were above inflation. As long as rates are below inflation gold can rise.
I was thinking along the same lines. And don't forget the panic value of Gold and Gold stocks. I wonder if Gold stocks would sell off again like they did last time, since the disaster picture is actually much clearer this time around. Meaning last time people thought the world would end. If the market were to plunge again, people would be thinking more selectively.
At least it sounds good. In practice who knows.
I've seen it disconnect for a day or two, then resume (sometimes making up for lost ground).
You should be prepared, if they want to scare some $ back into bonds, gold will get whacked along with equities (just not as bad).
This would be a spec trade looking for a correction similar to the last "good" UE news we got.
I don't see how the gov't can fund and survive with a rate blowout.
If we're about to hit the reprise of 1930, then bonds and stocks will crash together...np, then, it's easy to make money shorting when everything is going down.
But the regionals action plus CREITs seem to suggest a FF&C backstop on CRE, and this is nothing if not inflationary. I don't see how they can raise rates in this economic and deficit climat, but in the meantime I'd like to make a few high probability spec trades to make up for the apocalyptically bad 2009 I had short.
Me too. My fucking shorts burnt my ass... Cash/Gold now. I can't work the courage up to trade.
"As long as rates are below inflation gold can
rise."
This is interesting but it raises a question.
If interest rates are zero, must gold fall in
a period of deflation? Are we in deflation?
too funny...too sad!
Its like saying smoking can cause cancer. At least the banks and the investing public can't say they weren't warned.
Timmy and Ben Shalom, you must kneel and pray as Mr. Market is back in town.
Both Alan Greenspan and Ben Bernanke have said that once the creditors lose confidence and the long term bond rates start rising, there is nothing that can be done. If you look at the recent trend in the bond rates that time is approaching fast.
NFP- ignore the print and look at the back month rev's. Here is where the body(s) is/are buried. Silly rabbit- tricks are for kids.
"Does anyone even wonder what will happen with tomorrow's NFP report?"
Yes, I wonder. I wonder that you are implying the timing of this news is significant with the release tomorrow. I think it has nothing to do with the jobs number because they are two differnt departments.
I wonder if the lengthy talks on INFLATION beyond the alloted time at the last meeting has more to do with this report. There are hawks on inflation sounding off in the fed. We have $82 oil with well below peak usage. We have gold surging. This warning is about stagflation therefore I must say I do not buy into the argument of pluss 100K to 400K jobs added tomorrow on a seasonally adjusted basis. I see the number coming closer to ADP predicted minus 85,000.
The ADP isn't going to be consistently wrong.
And author please tell us your opinion so we not assume.
The idea they will raise rates any time before the midterms is pure lunacy.
A more pressing question is whether the bond mkt is about to do it for them.
Watching shit stocks like ZION blow up 12% per day is pissing me off tho, as is seeing SPG at nearly 80.
Under no circumstances would I sell physical, but I would short GLD if it looks like a good trade. But lately, you can't win shorting anything.
When the BOJ made commentary about one-way trades, a rate hike was forthcoming...I just don't know here wth is going on
Does anybody know where this screen capture comes from? It looks nice to connect to this system online.
ya If you had that website and could sell subscriptions to it you'd probably be a billionaire, maybe even mayor of NYC.
.....
You need to get out of trading or investing now.
LOL
...although actually there are probably a bunch of us here who are not traders and therefore may be unfamiliar with the basic tools of the, uh, trade.
Ivanovich:
The question is about the information
source used in this article. If you know
what it is would you please answer
the question?
it's from bloomberg professional, i presume.
Every rise in the market should be used as an opportunity to hedge (short).
Never seen such an irrational exhuberance. Tomorrow we could witness the paroxysm of this risk-free market. While computing some screening on european stocks today I found out that, only regarding the fundamentals, the market is 20% overvalued versus historical standard (for me the historical standard is of no signficance in this context of balance sheet deleveraging crisis). Apply a 10% (generous) discount on the historical standard to take into account the new normal (low growth environment in a liquidity trap due to BS deleveraging of household and .... states (did you know that all that we have witnessed this year was a massive tranfer of private to public debt? Can you figure out that we never have been able to create value but just create a monetary illusion through this transfer? We will all have to pay the bill (sooner than later) and remember that time is money; the more time you lost (while deferring indefinitely the policy re-entry through regulation) the more the collateral damages will be). Any idea on the real overvaluation of the market versus fundamentals?
If you integrate the other risk factors (CRE, China (competition of chinese companies, negative base effect on the fiscal and monetary stimulus,...), sovereign risks, low growth environment, double dip in housing prices, end of the growth factor for companies through the cost-cutting effect, geopolitics, commodities inflation, election in the USA and in in the UK this year, ....) what could be the discount we have to apply against the new standard in order to get an attractively valued market? 10% 20%?
What you say all makes sense, young padawan, but this is not the sell off you are looking for. Now move along and leave your short money here. Reality is what they say it is...not what we think it should be.
Well sure. But to keep things actually levitated (instead of just bounced) they are going to have to start rescinding some fundamental laws of gravity pretty soon.
Of course, they can do that. They can forgive all debt. They can hire every unemployed person to knit mittens for $300 per hour with no production quota. They can print enough $20 bills and hand these out as favors in McDonalds Happy Meals, or literally drop them from literal helicopters by the literal bucket. And they might, and that would rescind a lot of thinking on the matter.
But apart some tweeking like mark-to-fiction and all the FED facilities, they are currently sorta painted into a corner now. At least, that is what I hear everyone saying (my not being very know-ledge-able on the subject).
And FWIW I'm not going to be out in the parking lot waiting for my $20 bills to fall fluttering from the heights.
So I guess we wait for the levitation act to turn into the bounce it always was.
cougar
I think the market will sell if we get a good print.. (Buy the rumor + interest rates)
RALLY ON BITCHES... till it doesnt!
Heh
Bluff
Public consumption, the big banks already **know** what will happen.
The fed controls the vertical
The fed controls the horizontal
The fed sets the floor, and the ceiling on everything now. You have entered:
http://www.youtube.com/watch?v=NzlG28B-R8Y
Don't you mean they pretend to control? Wouldn't real control imply a police state, total central planning, and totally non-free-non-markets?
Someone will say "yup, that's us" but I don't think so.
Therefore the only outcome is that they do not control this, but have been allowed to manipulate things with the collusion of the market playerz, who saw a quick buck.
This whole business is an illusion. There is nothing real here, just "agreements" to suspend reality. The first player to jump out and take their winnings will probably stimulate every one else to do exactly the same thing for exactly the same motivation and thus bring the entire "agreement" crashing down in less than a day. The incentive to do this mounts with every passing hour, greed keeps them in and greed also makes them jump out. It's a precarious balance between two kinds of greed and nothing more. Unless they reinvent the machine I don't see how they can prop it up in the face of conflicting kinds of greed.
cougar
When we start seeing black markets for food, gasoline, etc then I might be willing to throw my hat into the "yup, that's us" pile, until that time i will agree we are in suspended reality atm.
Bubbles!!!! You rock dude!
And I'm watchin' all this like a shithawk!
TPB Rules!
Thanks Bully!
I believe we have transitioned from a free market to a command and control market that is politically dominated.
Therefore the market should rally up to the state of the union speech and through Bernanke's formal confirmation after the senate comes back on Jan 19th. I could see the dollar strengthening along with the markets leading up to these events.
TARP II BITCHES.
Another round of stress tests, another round of bullshit, another round of bailouts.
The document is a bunch of shit. Do the folks involved really see the contents of that document as news? Do they really need this information to do things correctly? I'm so sure these schlubs are reading it so carefully so that they can do everything exactly right. Nah, the document is not meant to inform, it is meant to prime a set of expectations.
I want my MTV and I sure as hell want to be TOO FUCKING BIG TO FAIL.
I don't know exactly how it is going to happen, but by the time we are done, CRE is going to get bailed out. If I am bank, I might buy this shit up. If I am one of you trader fuckers, I might be buying the banks.
Just sayin'
But I don't know, no, nuttin'.
lol...hey i'm drinking already too.
I'm still long JPM and WFC. They havent broken above Oct highs.
Fed was making sure they can monetize the higher long term int rates while still borrowing at zero.
Hey, Larry Kudlow is agreeing with y'all!
Hype and a cynical attempt to say "see--we did something!" while stoking the loincloth.
After another BIG deflationary wave down, Americans will be begging for the FED to have even more power and control to "save the economy."
Rates in the private market are headed way up. Subsidized (government) will be available to the marooned and to favored corporations and industry sectors.
They're counting on continued asset deflation and bankruptcy, etc to neutralize the inflationary impact of monetary stimulus. If that doesn't work, they'll let oil go back up to $150. That ought to do the trick.
After another BIG deflationary wave down, Americans will be begging for the FED to have even more power and control to "save the economy."
Rates in the private market are headed way up. Subsidized (government) will be available to the marooned and to favored corporations and industry sectors.
They're counting on continued asset deflation and bankruptcy, etc to neutralize the inflationary impact of monetary stimulus. If that doesn't work, they'll let oil go back up to $150. That ought to do the trick.
First Hoenig, now this. I smell a campaign brewing.
Best guess as to what's being put across: "Sorry, fellas. The floating carry-trade game's about to float off to another currency."
i wanted to compliment a commentor from a few weeks ago who said the financial houses were purposefully not allowing their stocks to appreciate back then, so the christmas bonus ppl would get in at a low price, and right after christmas they would juice up the stocks. damn, that guy was totally right! It really is one big giant ridiculous planned scam!!!
Used to trade BK like that many years ago, as an employee at the time.
Free markets..where? Pago Pago? Seychelles?
Free markets..where? Pago Pago? Seychelles?
I'll take the Seychelles... nice place to hide from Manhattan Metro concrete cess pool.
AnyHoo all credibility has been blown out long ago... the Force or Farce continues.
It seems like it is time for Uncle Timmy to supervise another fantasy "Stress Test" so the system can be declared safe. With that, a slew of additional equity can be raised by these zombie banks. Fools rush in...
It seems there are 2 entirely separate narratives supporting a US rate increase. One is an actual, proven recovery in progress. The second is a little tougher: rates must increase to attract global capital to fund the deficit. This, it seems to me, is a little like celebrating an increase in the price of oil, which sooner or later suffocates any nascent recovery. The rock rolls back down the hill, and interest rates drop back.
But say you take the Fed at its word: it has recently said, no rate increases for the foreseeable future. I think that relates only to Narrative #1 above, and reflects the Fed's belief that the economy remains mired in the mud. One would suppose, the Fed cannot control a rate increase attributable to Narrative #2, except by printing to buy new US debt (and rollover debt) at a lower interest rate than the "market" would require. And I think that is what they do - all available tools - until some sort of limit appears. Right now, it is clear that there are no ill effects of printing other than what appears to be some measured exuberance on the part of risk assets, if anything, it fuels the "confidence" trade (or is it game?). So I think that is the path. The Fed knows the "real" employment story, and today's 8:30 am announcement, while fun and games, is meaningless.
And I agree a good employment number is needed for POTUS's SOTUA later this month. Superbowl, recovering economy, rock on, people.
All over the blogs today, everyone's talking rates increase. Near as I can figure it was all started by those damn Chinese making noises about popping their housing bubble. Party poops.
I reckon for the reasons you stated, it's pretty much rhetoric tho. They'll raise rates when they get desperate enough, but it will be too little too late - NONE of our fearless leaders have shown the slightest stomach for Greater Depression the Sequel. They'll stick with fudged numbers and faked reports for as long as they can first, maybe go with a .25% rise or two down the road, and when they get REALLY desperate a couple high-profile arrests and circus trials, but there's no way they can raise rates high enough to offset debt at these levels. Hell, Volker had to set rates at near 20%, wasn't it, and the economy was nowhere near as sick then as it is now.
Either way... (shrug). We're in the fiat endgame, and it's just a question of how long it takes for a majority to see it. Here in Aus they've made the first couple raises, only b/c realistically we can't 'print' here. I'm curious to see how long their political will holds out, and I don't think it will be long.