This objective report concisely summarizes important macro events over the past week. It is not geared to push an agenda. Impartiality is necessary to avoid costly psychological traps, which all investors are prone to, such as confirmation, conservatism, and endowment biases.
Summed up the equity market did this...
Positives
- Typo leads to $14 billion in Spanish
growthdebt [14] – Predictably in the new normal, Spreads tighten - If you want to trade the debt ceiling debacle, we suggest moving from cash markets to the repo market, via repo pathway [15]
- Booya: Fed arbitrarily adds $180 billion to non-revolving consumer credit [16] – think of the economic growth that will result soon!
- JPY continues its volatility, leads S&P higher [17], while T-bill yields spike on default worries
- The Squid says sell your gold [18], cuz it’s a ‘slam dunk’ trade… promise
- Relatively smooth 3-yr auction confirms default fear confined to short-term bonds for now [19]
- Alcoa ‘beats’ Q3 estimates… if you exclude recurring non-recurring expenses [20]
- Italian & Spanish bond volatility is now less than… the US [21]? Move along
- Yellen is nominated to Fed Chair [22], yay ‘growth’ can resume!
- Headlines suggest progress is being made on the debt-ceiling talks (though Republicans remain confused) [23]
Negatives
- SocGen reiterates it’s all about flow, says market could correct 15% upon a Fed taper [24]
- POMO lifts, IB margin hike taketh away – markets get antsy over shutdown [25]
- Nikkei plunges [26] on the back of tax hikes, stronger yen
- IB margin hike [27] reminds us that the market is driven by leveraged momentum chasing, er, fundamentals
- Psst: $441 billion in US debt matures by November 15th [28]
- 1-month T-bill yield explodes [29], highest sinch Lehman
- Economic confidence index collapses at fastest pace since Lehman [30]
- Fidelity no longer holds any debt maturing [31] around the government X-date
- Iceland is what happens Larry, when you put in capital controls – fx shortfall looms [32]
- Dow crosses below 200DMA for first time in 2013 [33] – BTFATH re-set
- Interactive Brokers hikes margins a second time [34], TSLA impacted
- As we suspected, overnight repo rate soars [35]
- Consumer Confidence Slumps To 9 month low [36]
Additional
- Barack Obama: “I therefore intend to oppose the effort to increase America’s debt limit [37]”… no, not that Barack Obama, the SenatorMeet 28 other mutual funds who broke the buck [38] after (and before) Lehman
- Americans are dumber’er than the average [39]