The Credit Crisis Financial Stocks Short Journal
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There are some rumours that the Fed might change the language of the extended period, perhaps to 'some time'. I find this doubtful, the economic data is not supportive. NFP has been weak, inflation has been low, inflation expectations are still quite anchored. The Fed doesnt care about the fx value of the USD(Whether they should or not is irrelevant).
Most important there was no dissenting vote in the last fomc calling for that, they seem likely to only gradually start to consider that, the fed is not fast moving(In the meeting after Leh failed and the stock market had the worst drop since 9/11 they kept rates at 2% complaining about inflation). If anything they are likely to start teasing the idea of changing the language but the actual change is likely to only come in 2010
Most important there was no dissenting vote in the last fomc calling for that, they seem likely to only gradually start to consider that, the fed is not fast moving(In the meeting after Leh failed and the stock market had the worst drop since 9/11 they kept rates at 2% complaining about inflation). If anything they are likely to start teasing the idea of changing the language but the actual change is likely to only come in 2010
I've been re-reading the Education of a Speculator by Niederhoffer and I got say its a great book. The first time I read it I had already some prejudices against the guy due his two failures and connections with a banned ET poster. But now that I began to understand his philosophy better. He is the kind of guy who will say 'due this or that statistical fact I believe this or that'
or opposed to the trading books who say 'do this or that and you will make money' meanwhile they provide no concreate reason on why is that so
When pressed against the wall, they just say 'hmmm its kinda discretionary, you cant really test this', of course this leads to all kinds of fooled by randomness problems(the people who had success might have had due luck or some other factor). When the methods can be tested they are usually shown to be unprofitable(like the Daytrading 2.0 thread from ET, which IronFist tested and found it was not necessarily profitable)
Yes, the guy had two failed funds. So what I'm not reading him to get info on risk management which he is bad at but at finding positive expectancy bets and reading a different take on the markets
or opposed to the trading books who say 'do this or that and you will make money' meanwhile they provide no concreate reason on why is that so
When pressed against the wall, they just say 'hmmm its kinda discretionary, you cant really test this', of course this leads to all kinds of fooled by randomness problems(the people who had success might have had due luck or some other factor). When the methods can be tested they are usually shown to be unprofitable(like the Daytrading 2.0 thread from ET, which IronFist tested and found it was not necessarily profitable)
Yes, the guy had two failed funds. So what I'm not reading him to get info on risk management which he is bad at but at finding positive expectancy bets and reading a different take on the markets
Quote from ralph00:
Re-read his chapter on the Delphic Oracles and the Fed.
Countering a mystic oracle
"I cannot refrain from noting here that there are so many key fibonacci retracement levels - 23.6, 38.0, 50, 61.8 100, 161.8 - that the chances are 50-50 that some high or some low will retrospectively occur within one point"
He provides no math on this but I intuitively held this opinion too, I wonder if the 50-50 number is correct
Labor costs
"Year-on-year comparisons are the lowest in the 27-year history of the series".
Inflation
Core PCE price index - Yr/Yr change 1.3 %
Good luck to those who think the fed will change language at the next meeting
http://barrons.econoday.com/byshoweventfull.asp?fid=438103&cust=barrons&year=2009#top
"Year-on-year comparisons are the lowest in the 27-year history of the series".
Inflation
Core PCE price index - Yr/Yr change 1.3 %
Good luck to those who think the fed will change language at the next meeting
http://barrons.econoday.com/byshoweventfull.asp?fid=438103&cust=barrons&year=2009#top
Roubini has this theory that there is a large USD carry trade going on. Its a nice theory but it lacks evidence for it, banks are not lending and given that large brokers such as GS MS became holding companies(and as far as I know they are part of the Fed and FDIC bank statistics), just where is this liquidity coming from?
Who is lending so risk assets can be bought?I believe that theory is wrong, asset prices were helped by low risk free rates but this is simply an issue of a higher equilibrium prices for risk assets when the risk free rate is lower, not necessarily a lending driven asset boom
Who is lending so risk assets can be bought?I believe that theory is wrong, asset prices were helped by low risk free rates but this is simply an issue of a higher equilibrium prices for risk assets when the risk free rate is lower, not necessarily a lending driven asset boom