Covered short spx combo

871-844 I need a little break lol Z

You deserve it! Great trading, Z.

You deserve it! Great trading, Z.

thanks bud
What a freaking battle over the last few days Don sheesh a double JD later.


Hey kinda cool a Feng Shui Master who trades position/IT said ...not going in market until after Feb 4th due to some of there FS stuff. hmmmm berry interesting since there is lots of time stuff around Feb.3,4,5 and 9th+-. ya neva know lol


I think the Fed will have to go in and buy long bonds if they want home finance to take off again at one point. What do you think about them having to once the first wave of refis and buyers has ebbed which may have already? I am wondering if we rally here soon that it will be intense but short lived as the fed opens the flood gates on the long bonds then the money piles back in and out of the equities hmmm maybe something to think about and stay alert if we rally.

In meantime I am pretty neutral until I do some home work.
Z

very nice, zoro nose to the grindstone eye on the prize gettin' paid monk

You deserve it! Great trading, Z.

>Hey kinda cool a Feng Shui Master who trades position/IT said ...not going in market until after Feb 4th due to some of there FS stuff. hmmmm berry interesting since there is lots of time stuff around Feb.3,4,5 and 9th+-. ya neva know lol

>>I think the Fed will have to go in and buy long bonds if they want home finance to take off again at one point. What do you think about them having to once the first wave of refis and buyers has ebbed which may have already? I am wondering if we rally here soon that it will be intense but short lived as the fed opens the flood gates on the long bonds then the money piles back in and out of the equities hmmm maybe something to think about and stay alert if we rally.

>Interesting. I only trade positions/IT myself, so let me know what he decides. I am building short, but maybe should wait till after Feb 5th or 9th to get bigger?

>>The way I've viewed this is a race between the TARP or "bad bank" or whatever mechanism is supposed to take away the toxic debt so that mortgage lenders can lend again without the huge (300 bp) risk premiums over the 10-year TSY----and the base rate of the 10-year TSY itself. If the risk premium had shrunk to the traditional 125 bp when the 10-year was yeilding 2.1% recently, we'd have had mortgage rates near 3.5%. Now the 10-year is up to over 2.8% and rising, so that even if they get the "bad bank" to do what it is idealized to do, then the best we can hope for is low 4's- but by end of day today it was 5.5% again....and the clock is tickin'.

IOW, even if the "bad bank" idea works like a proverbial charm, they'd better get it working before rates rise much more, or they will have squandered this one big {last}opportunity for refis. Ultimately, I truly believe we will see double digit 10-year yeilds, so we only have a very limited window here to get this refi boom smokin', and then "poof" it will be gone forever...... Regards, D

http://stockcharts.com/c-sc/sc?s=$TNX&p=D&yr=0&mn=6&dy=0&i=p47497826036&a=149689458&r=347.png

Edited by IYB, 29 January 2009 - 06:13 PM.

You deserve it! Great trading, Z.

>Hey kinda cool a Feng Shui Master who trades position/IT said ...not going in market until after Feb 4th due to some of there FS stuff. hmmmm berry interesting since there is lots of time stuff around Feb.3,4,5 and 9th+-. ya neva know lol

>>I think the Fed will have to go in and buy long bonds if they want home finance to take off again at one point. What do you think about them having to once the first wave of refis and buyers has ebbed which may have already? I am wondering if we rally here soon that it will be intense but short lived as the fed opens the flood gates on the long bonds then the money piles back in and out of the equities hmmm maybe something to think about and stay alert if we rally.

>Interesting. I only trade positions/IT myself, so let me know what he decides. I am building short, but maybe should wait till after Feb 5th or 9th to get bigger?

>>The way I've viewed this is a race between the TARP or "bad bank" or whatever mechanism is supposed to take away the toxic debt so that mortgage lenders can lend again without the huge (300 bp) risk premiums over the 10-year TSY----and the base rate of the 10-year TSY itself. If the risk premium had shrunk to the traditional 125 bp when the 10-year was yeilding 2.1% recently, we'd have had mortgage rates near 3.5%. Now the 10-year is up to over 2.8% and rising, so that even if they get the "bad bank" to do what it is idealized to do, then the best we can hope for is low 4's- but by end of day today it was 5.5% again....and the clock is tickin'.

IOW, even if the "bad bank" idea works like a proverbial charm, they'd better get it working before rates rise much more, or they will have squandered this one big {last}opportunity for refis. Ultimately, I truly believe we will see double digit 10-year yeilds, so we only have a very limited window here to get this refi boom smokin', and then "poof" it will be gone forever...... Regards, D

http://stockcharts.com/c-sc/sc?s=$TNX&p=D&yr=0&mn=6&dy=0&i=p47497826036&a=149689458&r=347.png

thanks Funky nice of u.

Don the FS master is not shorting but waiting to go long but not until after Feb 4th. fwiw Chinese btw

Looks like a corrective movement to me on the yields D. I know how you feel about double digit yields I feel the same and think bonds are insane priced for long term but there is at least another 10-11+- trillion of big no good to write off and undue and this will take time which equals deflation and strong dollar *except for a several month correction soon on the $*. As long as the BAD BANK prints and keeps the bonds within a range should be a bit longer before the yields go way up.
Don when Bill Gross of Pimco retires look out!!!
Always love the glow in the dark charts.

we'll see
Z

Edited by zoropb, 29 January 2009 - 07:51 PM.

isnt the Chinese lunar new year holiday a whole week, so it will end around Feb 2 - perhaps he is just in synch with that tradition?

I find it very interesting that a lot of people think double digit interest rates are not that far off and this guy pops back up as apart of the Obama team.




Chairman of the Federal Reserve
Paul Volcker, a Democrat^[4], was appointed Chairman of the Federal Reserve in August 1979 by President Jimmy Carter and reappointed in 1983 by President Ronald Reagan.^[5]

Volcker's Fed is widely credited with ending the United States' stagflation crisis of the 1970s. Inflation, which peaked at 13.5% in 1981, was successfully lowered to 3.2% by 1983.

The federal funds rate, which had averaged 11.2% in 1979, was raised by Volcker to a peak of 20% in June 1981. The prime rate rose to 21.5% in '81 as well. [[1]]

These changes in policy contributed to the significant recession the U.S. economy experienced in the early 1980s, which included the highest unemployment levels since the Great Depression. These conditions were predictable by Carter when he appointed Volcker, and these circumstances contributed, predictably, to the defeat of Carter. Volcker's Fed also elicited the strongest political attacks and most wide-spread protests in the history of the Federal Reserve (unlike any protests experienced since 1922), due to the effects of the high interest rates on the construction and farming sectors, culminating in indebted farmers driving their tractors onto C Street NW and blockading the Eccles Building.^[6]