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Merrill RateLab's Stocking Stuffers
Merrill is convinced inflation is a-coming. As such, here are RateLab's proposed top trades, some of which are rather esoteric, others which make intuitive sense (of course, assuming one agrees that inflation trumps deflation: a bold assumption keeping in mind the endless consumer credit collapse). Some of the ideas: i) Sell OTM Payer Skews, ii) GNMA Reverse Mortgage Floaters, iii) Sell MBS/Buy Treasury Strips, iv) Buy CMBX 3 AAA /Sell CMBX 3 A, v) Buy FN 4.5/Sell half of FN 4 and 5 each, vi) Buy August 2025 vs USH0 Basis, and lastly some encouraging words on Agencies. As Zero Hedge is firmly convinced that the entire mortgage market is firmly gamed courtesy of endless Fed intervention which is the defacto buyer of first, middle and last resort, we urge readers to be very careful with any and all MBS/Agency trades.
Anyway, here is the "Holiday Stocking Stuffers - 2009" from ML RateLab's Harley Bassman
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Not that I would ever agree with anything Merrill says, but it doesn't matter if there's a consumer credit collapse. Inflation is a currency event, and the Fed has no choice but to keep on printing.
I think we saw rampant inflation disguised as "demand" from emerging economies for the past 10 years. I do think no one can actually put a finger on the amount of upper level currency is being destroyed and if that can be effectively balanced by printing money.
Just wondering.
Can any of those exotic instruments be bought or sold instantaneously via a mouse click?
If not, most "new age" portfolio managers at the venerable institutions like TIAA-CREF, CalPers, Harvard Endowment, etc. will not be interested.....
LOL.....
Super Nintendo, Sega Genesis
When I was dead broke, man I couldn't picture this
50 inch screen, money green leather sofa
Got two rides, a limousine with a chauffeur
"the entire mortgage market is firmly gamed"
You could strike the word "mortgage" from your statement and it would still hold true. IMO, the whole damned market is rigged and completely irrational.
any strategy piece entitled "Holiday Stocking Stuffers" doesn't particlarly beg to be taken seriously
these trades implicitly assume that OTC markets remain functioninal, liquid and tradeable
such .. utter .. crap. ought to write an article unto itself about what a total joke this nonsense is. just cause its from mother merrill doesn't mean its quality or accurate. flat out calling total bs on this crap from here on out. this bac: gold to 1500 lazy drivel from anal-ysts with fancy titles is just bull.
as rummy would say .... 'they started with an illogical premise and logically followed it to an illogical conclusion.'
"value concepts" from a "trading desk" -- that's a joke, right ?? right ??
who wants " a portfolio you can live with" ? -- ooooohhhhh, where do i sign up ???
" 2) In a debt crisis, inflation is the ONLY solution. " -- ummm, NO. SO wrong, it is frightening. just scary how truly stupid that lazy ass proclamation is. oh wait, who cares about all those letters in between I and N (flation) !! just skip 'em, rather conveniently, and focus on what matters, right? not what is factual but what is sexy, right ? garbage.
" Can we summarize it all in one line? Yes we can: “It is NEVER different this time” " -- this is just draw dropping. cool hackneyed cliche, got any more for us gene ? sounds real cute dudn't it. too bad its just not true. fractal, yes. the same, no. w/o getting too cute or talking about how there is neither ANY inflation to speak of now nor ANY to point towards in the foreseeable future ... wtf guys. and by the way ... awesome charts, way to show anything but price itself, i guess that's how you "trade" huh ... cause the slop presented above is, um, off-peak anal-ysis that is, ugh, kinda skimpy on "trading" and kinda heavy with an overly presumptuous linear extrapolation that simply slides by most readers bc they're impressed by the 99-cent words of 'convexity' and 'swaption' ... ooohhhh, sounds sexy, they must know their stuff AND those two firms have done SO well predicting the course of gargantuan icebergs that they surely must be great "traders" since their fundamental anal-ysis has bankrupted each of them so far beyond insolvency that there is simply no joke for me to insert. they're f'ing bankrupt. period. but don't mind that, they can cite convexity properly even though the very first and last lines, never even mind the middle letters like they are wont to do, of their piece (of crap) above are just downright laughable. no joke is necessary, the very notion of what they are asserting as fact is simply preposterous to begin with, rendering the advice contained within nothing more than lazy, crap anal-ysis that is a sell-side filler, at best .. whereas if this is actual "trading desk" ideas, well, then we all ought understand next year when the next "unimaginable" leg of the banking etc. etc. conflagration rages on, just how f'ing brilliant these geniuses are. what a total joke of a "trading" advice, just a bunch of upward right skew assumptions presented as utter fact. but then again, what do i know, i just trade for a living while they write for theirs. not my market of expertise, just have a nose for total bs.
Can you summarise that in one sentence? There may be some good stuff in there but I can't understand it.