The UST missing an interest payment seems to be a ultra unlikely event. As I said in the past people seem to be unaware that the Fed would step in to prevent such outcome, invoking section 13(3). They would not even need collateral for the loan since it would essentially a purchase of a UST. This could be complicated by some law that prevents the Fed from directly lending to the UST(But I'm not confident of that) but they can bypass this issue by lending to an LLC(Maiden Laine No n) which in turn lends to the UST
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Global Macro Trading Journal
- Thread starter Daal
- Start date
Even if the UST misses an interest payment, and sovereign CDSs tick up, its not the end of the world. I'm more concerned about the interest payment/GDP ratio. What's the current figure, 10% of GDP? If that ratio gets unsustainable, the world will realize that 1 missed payment is not a 1 off issue, and then shit will hit the fan. Again, not the end of the global financial system, but beginning of the end for the US.
Its not quite clear to me why M2 is soaring lately. Bank credit declined in may and june, MZM is also soaring. Overall I'd say it makes QE3 less likely
M2 mystery explained
Http://www.teletrader.com/_news/newsdetail.asp?id=13109629
It appears that those were money market funds flows into banks but as I said, MZM is soaring and thats supposed to include MMFs
Http://www.teletrader.com/_news/newsdetail.asp?id=13109629
It appears that those were money market funds flows into banks but as I said, MZM is soaring and thats supposed to include MMFs
Quote from Daal:
The people who got cleaned by Bernanke deserved what they got
U.S. equities are higher since he spoke. I think he made himself quite clear. There will be no QE3 until there is QE3. The Bernanke put is firmly in place. Let's hope it works better than the Greenspan put, which consigned a generation to crap returns from stocks.
Quote from Debaser82:
I posted my positions in this topic 25/02/11. Lets see how I am doing, right.
MDW: +60%
SLX: -20%
SPM: +68%
AVR: +35%
GBG: -15%
HL: -25%
AUY:+6%
So on average my stocks are up around 14% since then.
Some of these positions are a bit larger then the others and I owned all of them before the 25th and the minuses wouldnt stand if I took purchasing prices but regardless...
Clearly I could have gotten higher returns if I was more positioned in the winners and left out the losers right but on the other hand If I would have been more overweight the losers I could have been losing much more obviously so overal I can't complain I guess.
I also own gold which is up 10% over the same time period.
I must admit going through all the hassle of finding the right stocks etc I would have expected my stocks to outperform my gold exposure more then what these numbers show now.
All in all as a total economic illiterate just a few years ago (still am largely) and looking at market conditions this last year I'm thinking I should count myself lucky with my performances this year.
The plan still is for one of my stockpicks to outperform the rest significantly after which these gains can be spread amongst new opportunities.
With stocks, one thing I found helpful was to look back over the last 20, 30, even 50 years and see which were the best performing equities in any given year or decade, then try to work out what characteristics they shared. Generally I find that huge winners are either deep value situations bought dirt-cheap in times of crisis, companies which have some kind of innovative product or service plus dynamic management/CEO and which revolutionise their industry sector for years on end (e.g. MSFT & DELL in the 90s, AAPL in the 2000s), or the 'best of breed' companies in some kind of secular sector boom (e.g. commodities in the last 10 years, or tech in 1990s).
Another approach I found useful was to study the big winners of renowned investors like Buffett and so on, and try to work out how they spotted them and held on - and also what mistakes they made, if any (e.g. Buffett holding Coke and Gilette in 1998 at 40-50 times earnings - terrible blunder).
In any case, doing this kind of analysis teaches a lot about how stocks perform, how businesses operate, and so on.
Quote from Debaser82:
What do you guys think about the Norwegian Krona to put some of your cash in?
The countries fiscal strength has not had much influence on its currencies strength certainly that will change at some point no....
The problem with it is that if the EU goes into recession due to a debt crisis contagion, Norway will get hammered.
If you want a soundly financed economy & currency, with rates outlook in favour, then I'd go for the Singapore dollar instead.
The flip side is that you get almost no carry with CHFSGD.Quote from Ghost of Cutten:
The problem with it is that if the EU goes into recession due to a debt crisis contagion, Norway will get hammered.
If you want a soundly financed economy & currency, with rates outlook in favour, then I'd go for the Singapore dollar instead.