We can expect our anchor to hold – economic reality over the near term will disappoint. Thus prepared, traders can set up for key releases. We may miss a few as there are no straight lines in this business, but this represents the trend, as predicted earlier.
The general flaw common to street analytics was birthed not by analysts’ failure to capture traditional relationships but by their failure to understand that traditional relationships no longer matter.
The economy is rigged; it is phony. Risk takers in this democracy are accustomed to a rule of law; when there is none, when planners are at the helm, risk takers withdraw. Central bank policy making in the US is 1) discretionary and 2) unpredictable. The Fed has eviscerated traditional and essential market functions. Nothing good can come of this and nothing good will, especially when compounded by the administration’s interventionist policy making - if the Fed don’t scare ya dear CEO, then Obamacare will.
From late Q4 we advised readers and clients to look for “surprising” weakness, H1, and presented a detailing of the reasons why. We were a tad quick on the draw; events did not initially cooperate but most are now cooperating rather nicely.
Translation: Early and mid Q1 we suggested using the simplest of spreads – the term structure – to translate. This spread was sold or could have been sold at levels approaching 112, 5-10 yr, and 290, 2 – 30. Last, 99, 264. The spread is not as useful now as it is more directional; no matter; there exists a galaxy of other tools available to translate a withering US economy to the bottom line.
Robert Craven
The general flaw common to street analytics was birthed not by analysts’ failure to capture traditional relationships but by their failure to understand that traditional relationships no longer matter.
The economy is rigged; it is phony. Risk takers in this democracy are accustomed to a rule of law; when there is none, when planners are at the helm, risk takers withdraw. Central bank policy making in the US is 1) discretionary and 2) unpredictable. The Fed has eviscerated traditional and essential market functions. Nothing good can come of this and nothing good will, especially when compounded by the administration’s interventionist policy making - if the Fed don’t scare ya dear CEO, then Obamacare will.
From late Q4 we advised readers and clients to look for “surprising” weakness, H1, and presented a detailing of the reasons why. We were a tad quick on the draw; events did not initially cooperate but most are now cooperating rather nicely.
Translation: Early and mid Q1 we suggested using the simplest of spreads – the term structure – to translate. This spread was sold or could have been sold at levels approaching 112, 5-10 yr, and 290, 2 – 30. Last, 99, 264. The spread is not as useful now as it is more directional; no matter; there exists a galaxy of other tools available to translate a withering US economy to the bottom line.
Robert Craven
No comments:
Post a Comment