Global Macro Trading Journal

[Daal]

You have to put Bernanke comments in perspective. I remember quite clearly when he flat out signaled to others in the FOMC that easing was necessary. This was in Oct 2008 when stocks were crashing and the Fed had not cut rates in many months, even after LEH failed

http://www.federalreserve.gov/newsevents/speech/bernanke20081007a.htm
"Overall, the combination of the incoming data and recent financial developments suggests that the outlook for economic growth has worsened and that the downside risks to growth have increased. At the same time, the outlook for inflation has improved somewhat, though it remains uncertain. In light of these developments, the Federal Reserve will need to consider whether the current stance of policy remains appropriate."

Paying attention to yesterday's speech in more detail I see he is not signaling anything strong, it is a dovish speech no doubt, this means no premature exits, but additional stimulus seems a bit too early. Data will have to weaken first

But of course, the stock market is on cocaine so they will interpret anything as being more than it is

 

[Daal]

NYFed: UR irrelevant, employment to pop ratio is more important
http://libertystreeteconomics.newyorkfed.org/2012/03/prospects-for-the-us-labor-market.html

I'm surprised that it seems that Bernanke didn't mention that in his speech

 

[Debaser82]

I have a question....

Where I live dividends get taxed 25% and if the stock is foreign 50%.

So either one loses half of the dividends or one should invest locally but it's a small country here and the future outlook is unclear as no one knows how the Euro crisis will evolve.

Capital gains are tax free on the other hand.

Does it still makes sense for me to buy foreign stocks for their dividends in your view?

Cheers.

 

[luisHK]

I have a friend in the same fiscal situation as yours and am puzzled when I see him so enthusiastic about foreign high dividends stocks. If there's enough volume on your stocks you can also try to sell just before the div and buying the next day, as the value of the stock is supposed to go down as much as the dividend (I tried a few times but with mixed results, especially when the market gaps up that day )

 

[Daal]

Quote from Debaser82:

I have a question....

Where I live dividends get taxed 25% and if the stock is foreign 50%.

So either one loses half of the dividends or one should invest locally but it's a small country here and the future outlook is unclear as no one knows how the Euro crisis will evolve.

Capital gains are tax free on the other hand.

Does it still makes sense for me to buy foreign stocks for their dividends in your view?

Cheers.

Markets tend to price tax advantages and usually returns would be similar over a number of assets adjusted for risk
But in your case I don't think it makes sense to buy foreign stocks with high yields. That is because those stocks trade outside your country and the markets there don't care about the tax laws of your country

In your stock market the dividend yielders probably trade lower than they would otherwise do given the tax disvantage over low/non yielders. This doesn't happen with the foreign stocks, so you get the worst of both worlds(High tax, no discount to compensate)

 

[ralph00]

Quote from Debaser82:

I have a question....

Where I live dividends get taxed 25% and if the stock is foreign 50%.

So either one loses half of the dividends or one should invest locally but it's a small country here and the future outlook is unclear as no one knows how the Euro crisis will evolve.

Capital gains are tax free on the other hand.

Does it still makes sense for me to buy foreign stocks for their dividends in your view?

Cheers.

Move?

 

[Specterx]

Quote from Debaser82:

I have a question....

Where I live dividends get taxed 25% and if the stock is foreign 50%.

So either one loses half of the dividends or one should invest locally but it's a small country here and the future outlook is unclear as no one knows how the Euro crisis will evolve.

Capital gains are tax free on the other hand.

Does it still makes sense for me to buy foreign stocks for their dividends in your view?

Cheers.

Tax-free capital gains is huge, does that apply to foreign stocks as well? Either way, at a 50% rate I think it doesn't make sense to buy foreign shares explicitly for their dividends, or where you expect much of the return to be in dividend form.

 

[Specterx]

Looks to me like this is the pullback we're going to get in long bonds assuming the inflation expectations/normal recovery trade has any legs... anyone who wants to load the short bus ought to do it soon.

 

[darkhorse]

Via PKedrosky:

At 12.6% to-date, Q1 2012 is merely the 9th best Q1 in S&P 500 history. Best? 1987, which was 24% ytd.

 

[ralph00]

Just picked up a few puts on AMZN and SPY. Getting a little uncomfortable with stocks up so much this year and this is cheap, cheap, cheap insurance.

Will look for the smallest of bounces to add to GWR short as well. Things really getting ugly in China.