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The Really Useless Thread

  • #141,841
  • Jul 14, 2016 4:20am Jul 14, 2016 4:20am
Quoting sisse
{quote} Good post. Not sure if agree with your final conclusion. I see it closer to Einstein definition insanity ..." doing the same thing over and over again, but expecting different results". They are trying to put in a screw using a hammer. Wrong tools for the real problem. We'll see but this will trigger a long follow up in Japan and the bond markets .sisse
I see your point. But I think it is slightly different, in that the public are being told this is new money - and the new money is being used (hopefully) for fiscal stimulus, being injected directly into the economy, as opposed to an asset swap on banks' balance sheets which happens in traditional QE. When the new money circulates, creates new income, and people assume that it is permanent, could this have an effect on their desire to save or spend/invest? Who knows at this stage, I guess.

It could have huge effects in FX and the bond markets. However, I see a very strong chance of similar policies occurring in other major economies, should China hit a hard landing and unleash a wave of deflation across the globe. Therefore, policymakers across the globe will be looking on with great interest at what transpires in Japan and the effects on the economy.
  • #141,842
  • Jul 14, 2016 4:28am Jul 14, 2016 4:28am
Quoting gammase1
{quote} ... However, I see a very strong chance of similar policies occurring in other major economies, should China hit a hard landing and unleash a wave of deflation across the globe.
I agree.with that one. I am starting to edge towards that scenario in 2017 and beyond. We need to clear short term jitters from the UK first but whatever the outcomeof brexit political bs. The UK and Europe are heading for recession and deep slowdown in the world economy. All the free.money left in the world (via CB) won't be able to keep up with structural economic problems, cuts in free trade and inward looking policies

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #141,843
  • Jul 14, 2016 4:46am Jul 14, 2016 4:46am
Quoting gammase1
{quote} Fantastic value for those wanting to protect long equity exposure through buynig puts on indices. Looking at S&P500 Dec Puts.
Indeed, but somewhat out of my comfort zone (options,puts,calls).

Nonetheless, SPX 2,200 may be the psych/magnet level where the fear begins to increase.
That's where I would buy a PUT if I was in that game.
  • #141,844
  • Jul 14, 2016 4:53am Jul 14, 2016 4:53am
Quoting sisse
{quote} I agree.with that one. I am starting to edge towards that scenario in 2017 and beyond. We need to clear short term jitters from the UK first but whatever the outcomeof brexit political bs. The UK and Europe are heading for recession and deep slowdown in the world economy. All the free.money left in the world (via CB) won't be able to keep up with structural economic problems, cuts in free trade and inward looking policies sisse
Agreed. The very real problems in China haven't disappeared - one just needs look at the trade data from this week.

Credit in China is in total bubble territory, with official figures placing credit growth at 12%, with unofficial figures from credible economists (George Magnus, for one) saying the real figure is closer to 25%, roughly four times quicker than real GDP growth. House prices have once again picked up, because of this easy access to credit and the government is reluctant to intervene, given they place achieving GDP growth, and the social cohesion that brings, as priority.

This will end badly; it's a case of when, not if, and how the resulting deleveraging is managed by China. To counter any Minsky Moment, the downward pressure on the yuan, along with the temptation to significantly devalue, will be immense.
  • #141,845
  • Jul 14, 2016 4:59am Jul 14, 2016 4:59am
Quoting bullionman
{quote} Indeed, but somewhat out of my comfort zone (options,puts,calls). Nonetheless, SPX 2,200 may be the psych/magnet level where the fear begins to increase. That's where I would buy a PUT if I was in that game.
I'm looking at buying out-of-the-money Puts for December expiry, as a way of hedging long exposure (leaving me free to ride the trend in the short-term) and a way of buying implied volatility (vega) at very low levels.
  • #141,846
  • Jul 14, 2016 5:06am Jul 14, 2016 5:06am
Quoting gammase1
{quote} I'm looking at buying out-of-the-money Puts for December expiry, as a way of hedging long exposure (leaving me free to ride the trend in the short-term) and a way of buying implied volatility (vega) at very low levels.
Wouldnt bet the house until FED July. If they act rationally and technically they will put the breaks on this rally to avoid going overboard too fast. Plus with BOE, BOJ, and ECB flooding the market why bother losing firepower on an already wild fire.

In my case, won't touch equities to the long side till the FED and after that only with a very limited scope...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #141,847
  • Jul 14, 2016 5:10am Jul 14, 2016 5:10am
Quoting sisse
{quote} Wouldnt bet the house until FED July. If they act rationally and technically they will put the breaks on this rally to avoid going overboard too fast. Plus with BOE, BOJ, and ECB flooding the market why bother losing firepower on an already wild fire. In my case, won't touch equities to the long side till the FED and after that only with a very limited scope... sisse
Agreed that hawkish comments from the Fed should put breaks on this rally, which is overdone, in my opinion (expectations of aggressive CB policy responses are very high). The buying of Puts is giving me downside protection at a cheap price.
  • #141,848
  • Jul 14, 2016 5:16am Jul 14, 2016 5:16am
Quoting gammase1
{quote} Agreed that hawkish comments from the Fed should put breaks on this rally, which is overdone, in my opinion. The buying of Puts is giving me downside protection at a cheap price.
Sure I see what you are aiming but I am not sure it will play out like that as the risk factors to the down side (especially via the bond markets) are heavily aligned to sharp corrections rather than soft pullbacks (hence the cheap pricring in options). If we blow down it will be sharp and quick while the rally will be slowly grinding the highs until the trend exhaust itself on low value (eyes on earnings in the US for that).

In any case, GL. @FOOL May have something to say about options play.

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #141,849
  • Jul 14, 2016 5:22am Jul 14, 2016 5:22am
Quoting sisse
{quote} Sure I see what you are aiming but I am not sure it will play out like that as the risk factors to the down side (especially via the bond markets) are heavily aligned to sharp corrections rather than soft pullbacks (hence the cheap pricring in options). If we blow down it will be sharp and quick while the rally will be slowly grinding the highs until the trend exhaust itself on low value (eyes on earnings in the US for that). In any case, GL. @FOOL May have something to say about options play. sisse
The sharper the better, in terms of the options, as implied vol will rocket on any big downside move (at a greater velocity to how implied volatility moves lower on upside moves).

Great opportunities in these markets for the nimble.
  • #141,850
  • Jul 14, 2016 5:29am Jul 14, 2016 5:29am
What extension are we expecting in S&P 500? Can euphoria take it to 2300?
"Bulls make money, bears make money, pigs get slaughtered"
  • #141,851
  • Jul 14, 2016 5:41am Jul 14, 2016 5:41am
Quoting manosk
What extension are we expecting in S&P 500? Can euphoria take it to 2300?
We're at ATH, so your guess is as good as ours
  • #141,852
  • Jul 14, 2016 5:57am Jul 14, 2016 5:57am
...here we go xthe BOE. ALL micro levels raised GU. 1.320x is the rain maker to both sides...

GL all
sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #141,853
  • Jul 14, 2016 5:59am Jul 14, 2016 5:59am
Quoting eborn
{quote} We're at ATH, so your guess is as good as ours
I have bought anyway some dec puts in s&P 500 just to be safe
"Bulls make money, bears make money, pigs get slaughtered"
  • #141,854
  • Jul 14, 2016 6:00am Jul 14, 2016 6:00am
Flop...QE inline

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #141,855
  • Jul 14, 2016 6:04am Jul 14, 2016 6:04am
BoE is the same no matter what happens ...they never pull the trigger , gu spike being sold, euro didn't overshoot ...at least for now... things should move from now on , US data coming in few .
Get Rich or Die Tryin
  • #141,856
  • Jul 14, 2016 6:11am Jul 14, 2016 6:11am
...and that was pretty much it. GU finally back to break out. Watch out FTSE sliding softly to 6600 for a breather. Well played by the BOE massive impact only in the preventive move but it didn't have to use the bullets yet. Well done all longs in sterling. Markets squeezed every penny out of it before if was implemented.

Bastards making a feast on Brexit....eyes on NY to prolly kill the week if Euro doesn't break down in the next couple of sessions.

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #141,857
  • Jul 14, 2016 6:20am Jul 14, 2016 6:20am
Does this change FA Outlook in GU now (Aggressive Sell)Short term? Economy is still an issue and will be for GU and EU.

I did not get back in the GU as I waited for this news which I am glad as I would have been on the wrong side of this move..

I am not sure how long this short term leg will be in play against the MID and LONG term Legs with knowing the EU economy is uncertain if not frail even more so due to BREXIT and US economy better than others....I still see GU and EU weaker currency than USD
  • #141,858
  • Jul 14, 2016 6:26am Jul 14, 2016 6:26am
Final reading on the minutes with a very bleak picture in the UK and now with inflation concerns entering in the equation (what a mess for policy makers...they have a titanic task ahead to save this ship)

==> Only updates after the BOE:

- Reconfirming mid and long term outlook in UK equities in sell and short term in Neutral.

- Confirming mid and long term outlook in Sterling in strong sell

- Changing short term outlook in Sterling from aggressive sell to sell.

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #141,859
  • Jul 14, 2016 7:38am Jul 14, 2016 7:38am
There is some talk that a significant reason for the MPC remaining on hold was the naming of Philip Hammond as the new Chancellor (the others being lack of firm data showing impact on economy and growth from Brexit, and the short and medium term inflation risks from sterling's depreciation).

There have been hints that Hammond will be looser on fiscal policy than George Osborne. This matters to monetary policy as his approach to fiscal policy, namely the level of deficit spending he is comfortable with, will impact the Bank's inflation and growth projections. It should also be noted that any further Quantitative Easing would require approval from the new Chancellor (Osborne would have agreed to any extension to QE, but Hammond?).

All eyes on August, with a highly probable cut likely.
  • #141,860
  • Jul 14, 2016 7:42am Jul 14, 2016 7:42am
US data keep getting firmer , that's a good sign ...still USD to turn into the only safe haven across the board , equities has to give .
Get Rich or Die Tryin
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