Global Macro Trading Journal

I realize that austerity would hurt the economy and maybe you don't get a 1-1 effect in the deficit decrease but Greece proves that austerity does 'work'. It only doesn't work if you are looking at the wrong variable. So maybe they need to ajust 2.5% instead of 2, or 3%. Well, whatever it is, the market will keep demanding until they do it
 
Some people are going further out and even buying Petrobras USD bonds, at 11%. They reason that if the sovereign debt is a buy, then the state companies with implicit guarantees are also a buy. There is even a good macro manager with a strong record in Brazil, long these things. I have my reservations about being long this debt. I believe the state banks are fine as they are too big to fail. Iif they were to fail, there would be a mass of poor people lining up at every bank all through the country, taking their cash out. This would lead to a depression. But a state oil company? It could be bailed out, or it could not be.

Put it this way, if the bailout thesis is going to fail, its going to fail in a company like this. Why is it an oil company too big to fail? because of employment? well, haircuts on the bonds are probably only going to held to keep people employed. Mostly, its the Pimcos of the world who are long this thing, having them share on the pain makes sense
I fail to see why haircuts on these bonds are out of the question
 
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PBR warns its own investors that they are not guaranteed by the Gov
http://www.bloomberg.com/news/artic...-the-bank-of-brazil-race-petrobras-debt-clock

Its hard to argue in court that the haircut is unfair when the company warned people about the very reason they are using to buy (TBTF)

JPM, BAC, C bonds have spreads over USTs of something like 50-80bps. PBR has 400bps. So even the market is starting to doubt they are guaranteed.

As things get worse, BR CDS widens and PBR spreads over BR bonds widen, probably even more. So thats another reason to stay way.
 
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Just wanted to touch on a point about taking a break since I noticed you mentioned you were in Thailand for a bit. I too took a break for a few months and went to Thailand, felt amazing. A trader friend of mine trading at a local firm is taking a few months off too to travel the world. Over time I have realized that indeed markets will always be there. Your time in life is not. Get out there.
 
jj90 said:
Just wanted to touch on a point about taking a break since I noticed you mentioned you were in Thailand for a bit. I too took a break for a few months and went to Thailand, felt amazing. A trader friend of mine trading at a local firm is taking a few months off too to travel the world. Over time I have realized that indeed markets will always be there. Your time in life is not. Get out there.
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I agree. Its tough for me because I try to balance the idea of good compounded returns and enjoyment of life. I don't like the idea of giving up the extra profits (on top of the vacation cost) because I know this will hurt the compounded returns. But at the same time, whats the point of saving all the money until you are 60? So in the last 2 years I have been trying to force myself to spend more and travel more. But its still difficult. Because I didn't had a lot of money growing up (and I was completely broke in early 2004) money became a big value in my hierachy of values. This was also the result of the influence of my father, who is a big saver.

So right now, I"m trying to lower the value of money while increasing the value of life experiences, enjoyment of every day life etc. Its funny, people ask me about why I don't do this or that business opportunity but the truth is that what I'm trying to do is to decrease my work hours and consequently decrease my income. But at the same time, I don't want to do that irresponsably and hurt my compounded returns too much.
I'm trying to balance both but its tough to balance both because the very act of caring about compounded returns reinforces money as a big value for me.
So its a hard situation to deal with. If I didn't care about the returns, all I would have do to was to travel for like 6 months and I would care a lot less about money. I do feel that way after a few days without trading. But once I get back to it the issues tend to return

This is mostly daytrading I'm referring to here. Position trading, investing, etc. Its something that doesn't require that much time (compared to being glued to a screen for 6.5 hours) and I actually enjoy a greal deal
 
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This is also an issue of 'trying to reach your full potential'. I know guys who make $500k-$5M a year day trading. I know how they do it too. A lot of the time we are in the same trades. Difference is they are way bigger and more importantly, they manage the trades better. So I feel like I have room for improvement and could generate a lot better results if I worked more in my staying power, or just by accumulating more experience (most of these guys have 6 years or more of daytrading experience). But its hard to do that if I decide to say screw money, I'm going to enjoy life. So I try to do both. Its hard not to, the potential is so huge

I'm going to experient more with trading and travelling at the same time
 
Thats why I believe the $121-$120 level will be hard to break. There will be guys like him and lots of others who will be tempted to buy along with Buffett. All the lemmings will be longing there. Downside is quite small if I get assigned at $125
 
Another interesting situation is GLRE, the Einhron reinsurance company. He is having a bad year (down 24% I believe), the shares are down like 47% from the peak. I have an issue with this company that is preventing me from buying. I'm not seeing any insider buying, not from Einhorn, not from anyone in this company. They just sell. They do have a buyback and they bought some shares this year. but now that Einhorn is having a worse drawdown, they stopped. As they should as they need to keep their insurance rating A. But you would expect management to ramp their own buying when they realized the buyback would have to stop. The fact that are not doing that is a bit troubling. Usually, in financials/insurance you have to trust management as the leverage can kill the company (and thats a quote from Buffett), I can't trust them if they are not buying the stock after it gets cut in half
 
With markets moving to the lower end of the range idea I mentioned, im looking to get some bullish exposure in. Shorting BRKB puts (sold some yesterday), potentially selling bonds and bond futures I own and maybe adding to EWZ
 
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