Kudos to MMs
- Thread starter nitro
- Start date
No, not Mr. Magoo market. Monopolistic market.
Bah,
I don't know if I believe the conspiracy theories.
I think the natural sellers, the hedge funds, have been run over and they are waiting to sell when it is clear. In the meantime, let buy side drive prices.
"There are many times when I have been completely in cash, especially when I was unsure of the direction of the market and waiting for a confirmation of the next move." - Jesse Livermore.
"After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting." - Jesse Livermore
Heres an argument against you theory of fed hikes in the next 6 months. The fed already publicly commited to keep open their liquidity facilities till Feb 1 2010, they need 'unusual and exigent circunstances' to keep them open. It would be highly usual(and probably illegal) for the fed to hike rates(tighten credit) and claim the financial system is in 'unusual and exigent circunstances'. Therefore the fed will only risk a hike after the facilities are expired(Mar at the earliest since there is no meeting in Feb) otherwise that would draw further scrutiny from congress(who wont like the hike) and bernanke would be risking losing his seat with ilegality accusations again
I am not disagreeing on the time frame, although I moved my date to early next year, sometime in FEB, as we got more information from the FED. Ok, March? Fine.
But that is not the crux of what I object to. My biggest concern is that IRs are taken back far too slowly, continuing the endless cycles of creation and destruction of wealth. Believe me, from a traders point of view, nothing would make me happier than to see what we saw from September of last year to about March of this year - I would make a fortune because I have systems now that would kill in that environment. But as a citizen and neighbor of people that I have seen the effects of these cycles, I would rather be poor than see so many people's life destroyed.
Here's the thing I'm mainly concerned about what will happen, I dont spend much time think about what should happen. What should happen is congress starts free trade with the entire world but I know that is not going to happen so I dont bet on it. As far as March is concerned my argument is there is less than 5% chance of hike by then, and perhaps 10% after that, so looks there is still value on those contracts for longs even if some people disagree with the policy
Perhaps, I still contend the very long end of the curve is at least 200 basis points undervalued.
Free trade? Perhaps that would be stimulative, but I suspect that the current government is too protectionist for that. Besides, people are broke here and abroad, and the ones that have money are on a budget terrified they may not have job security! So how does free trade help?
I think we have seen a maturing of this country. Endless mindless consumerism like we have seen in the last 10 years is done. I expect to see lots of double and triple redundant retails stores to close.