Erm, I wouldn't really be so sure about this, as far as the ECB is concerned.
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Global Macro Trading Journal
- Thread starter Daal
- Start date
They were, before EUR HICP printed at 2.6% YoY... They ain't saying that no more. In fact, the leaks are suggesting that they're now saying that this is, in fact, a start of a cycle. EONIA mkt is pricing in a wee bit more than 3 rate hikes by end of 2011 (this is a very rough and approximate calculation, as EONIA-refi spread is anybody's guess).Quote from Daal:
Weren't they saying that a hike would not mean they would go on a campaign or something like that?
Quote from Daal:
Weren't they saying that a hike would not mean they would go on a campaign or something like that?
Why would you believe this "open mouth operation" any more than the Fed's. Central banks - wary of scaring anybody - often say this at the start of a hike cycle. Hiking a measly 25 basis points means nothing, and markets would rightly take the euro out back and shoot it if the ECB attempted this. Short of a crack-up in markets, 100 basis points is coming by next March.
Quote from ralph00:
Why would you believe this "open mouth operation" any more than the Fed's. Central banks - wary of scaring anybody - often say this at the start of a hike cycle. Hiking a measly 25 basis points means nothing, and markets would rightly take the euro out back and shoot it if the ECB attempted this. Short of a crack-up in markets, 100 basis points is coming by next March.
Well, they meet monthly so this would be less than a hike per meeting, which is sorta my point that central bankers from crises countries will be slow and gradual
Hedge funds can't beat a basic ETF retail strategy
http://www.marketwatch.com/story/why-im-not-investing-in-hedge-funds-2011-04-06?pagenumber=1
http://www.marketwatch.com/story/why-im-not-investing-in-hedge-funds-2011-04-06?pagenumber=1
The question though is: How well would the average retail investor do in actual reality following that basic 60/40 strategy. Will he not deviate from the game-plan, usually at the wrong times, selling in panic and buying at the peak of the mania?Quote from Daal:
Hedge funds can't beat a basic ETF retail strategy
The real eye opener would be a comparison of capitalization weighted hedge fund returns vs. actual retail investor equity/bond mutual fund returns derived from fund flows.
That'd show how well or not so well the professional money manager does compared to retail Joe Average. I remember seeing fund flow retail investor performance a few money ago in some publication. I'll try to dig it up.
Corn farmers now storing corn to speculate in prices
http://www.ft.com/cms/s/0/53ff8bc8-6070-11e0-9fcb-00144feab49a.html#axzz1IpTQvEXU
This reminds me of the oil tankers holding on oil to sell later during the $147 oil climb craze
http://www.ft.com/cms/s/0/53ff8bc8-6070-11e0-9fcb-00144feab49a.html#axzz1IpTQvEXU
This reminds me of the oil tankers holding on oil to sell later during the $147 oil climb craze
Saw the story yesterday and had a laugh. In fairness to farmers, farming itself is a speculation on higher prices. Also, main reason the farmers are building these things is that they are getting screwed on the basis - i.e. they're forced to sell their corn on the spot market, which is often far less than the price on the CBOT. Building these storage bins allows them to dictate when they sell and the smart ones (and most of them are - 3 decades of bear market have driven out all but the top guys) are no doubt hedging the corn they have in storage. It's a highly sophisticated business and most farmers are no rubes. They're in a constant battle with the likes of Cargill and this is a tool they have to fight it.
My guess is the vast majority of corn growers are hedged against lower prices, not speculating on higher ones. If they start pulling their downside hedges, then we've got a problem.
My guess is the vast majority of corn growers are hedged against lower prices, not speculating on higher ones. If they start pulling their downside hedges, then we've got a problem.
Very interesting speech on iexpectations
http://www.newyorkfed.org/newsevents/speeches/2011/pot110330.html
"When we probed survey respondents about their understanding of changes to âprices in generalâ (the Michigan Survey question), we found that a significant fraction believed we were inquiring about the prices they themselves recently paidâoften prices that had increased or decreased markedly, such as those for food or gasoline. This tendency to think more about prominent price changes in oneâs own experience is less common among respondents with higher financial literacy. By contrast, when we asked about expectations for the ârate of inflation,â respondents tended to think less about a few salient price changes specific to their own experiences and more about price changes across a broader set of items or about changes in the cost of livingâa result that aligns more with economistsâ definition of inflation as a sustained increase in the overall price level. Asking about the rate of inflation directly therefore produces answers more consistent with the concept of forward inflation expectations of interest to central banks."
This explains that very high prints of those iexpectations surveys. In sum, it seems that the Michigan Survey is likely to be ignored/downplayed by the FOMC after this NYFed research
http://www.newyorkfed.org/newsevents/speeches/2011/pot110330.html
"When we probed survey respondents about their understanding of changes to âprices in generalâ (the Michigan Survey question), we found that a significant fraction believed we were inquiring about the prices they themselves recently paidâoften prices that had increased or decreased markedly, such as those for food or gasoline. This tendency to think more about prominent price changes in oneâs own experience is less common among respondents with higher financial literacy. By contrast, when we asked about expectations for the ârate of inflation,â respondents tended to think less about a few salient price changes specific to their own experiences and more about price changes across a broader set of items or about changes in the cost of livingâa result that aligns more with economistsâ definition of inflation as a sustained increase in the overall price level. Asking about the rate of inflation directly therefore produces answers more consistent with the concept of forward inflation expectations of interest to central banks."
This explains that very high prints of those iexpectations surveys. In sum, it seems that the Michigan Survey is likely to be ignored/downplayed by the FOMC after this NYFed research