40 replies to this topic

[MDurkin]

I see that Stock Charts has compressed the Fed Funds chart I posted above...here's the unadulterated version for the readers review.

 

Fib
 

Great chart... so now that jobs are back up(manipulated) rate hikes are back on the table. Anything over 1.79 puts us over 200 day ema.

Edited by MDurkin, 10 July 2016 - 03:51 AM.

[dasein]

it appears that the last time the rates were allowed to stay over the 200 for any amount of time was in the bad ole 70s - before the 30+ year downtrend in rates - surely the CBs of the world can keep pulling rates under that 200 EMA and continue our needed prosperity?

[NAV]

 

Take the last 2 bear markets(2000-2003)-(2007-2009) as the stock market tanked the 30 year Treasury's yield dropped... flight to safety. Now you have the market rising and Treasury's yields dropping the opposite of what happened. Why?

 

Thanks.

 

You must be kidding, if you say you don't know the answer for this.

 

In the U.S, it's one word "QE".

 

The fed has spent a few trillion buying the long bonds and mortgage securities. As a result, Bond prices rise and yields drop. Simple.

 

After the QE ended, the drop is because of the safe haven trade.

 

Most of the western world have zero or negative yields 

http://www.bloomberg...ets/rates-bonds

 

In Europe it's a more complicated story. While Spanish, Portugese and Italian bonds are slightly positive, German and Swiss bonds are negative. People wonder how on earth can this happen. It's spain, portugal, italy and ireland which are deleveraging, while Germany and Switzerland has been performing relatively well and their bond yields drop. That's because the spanish, portugese and other buyers are piling on to German bonds, which they consider a safe haven. 

 

Distortion, distortion, distortion everywhere.  

 

Until the deleveraging process completes, these distortions would continue.You would think the deleveraging would complete some day. But both the public and private sector are only levering up, more and more. Debt (both private and public sector) only keeps exploding. The zero percent interest rates or NIRP (perhaps in the future) will never end until this deleveraging is complete. Once the deleveraging is complete, we have a another big problem to deal with. How will the Fed unwind it's 4.5 trillion balance sheet ? Imagine what would happen to the bond yields when these trillions of bonds are dumped into the market by the Fed ? Or will it ever ? Can it ?

 

It's a Friggin' mess !

 

200 months from 2009 is 2025. By 2025, Fib's 200 month MA will be near zero. Then we will be in a eternal bubble forever :-)

 

 

 

P.S - Thankfully we don't need all these macro-economics to trade the markets. Simple price and MA are sufficient. 

Edited by NAV, 10 July 2016 - 09:14 AM.

[NAV]

 

 

Great chart... so now that jobs are back up(manipulated) rate hikes are back on the table. Anything over 1.79 puts us over 200 day ema.

 

You are watching the wrong stuff. Fed cannot and will not raise rates based on inflation or employment data as they claim. That's BS. If that was the case, they would have been raising the rates long back.

 

Fed cannot and will not raise the rates until the de-leveraging is complete. It is not going to happen for a long time. Even if by mistake the Fed raises the rates, the economy will tank so fast it will rollback the rate increases. Watch the balance sheet of the households and the rest of the private sector. That will be your clue. 

 

I don't understand this media obsession over Fed raising rates and the talking heads giving out some garbage opinions day in and day out on the TV.

[robo]

Waiting on IWM....  So far a lower high.....

 

 

http://stockcharts.c...882&a=466854706

 

 

http://stockcharts.c...624&a=466853994

 

 

http://stockcharts.c...272&a=466854514

Edited by robo, 10 July 2016 - 10:17 AM.

[MDurkin]

 

 

Take the last 2 bear markets(2000-2003)-(2007-2009) as the stock market tanked the 30 year Treasury's yield dropped... flight to safety. Now you have the market rising and Treasury's yields dropping the opposite of what happened. Why?

 

Thanks.

 

You must be kidding, if you say you don't know the answer for this.

 

In the U.S, it's one word "QE".

 

The fed has spent a few trillion buying the long bonds and mortgage securities. As a result, Bond prices rise and yields drop. Simple.

 

After the QE ended, the drop is because of the safe haven trade.

 

Most of the western world have zero or negative yields 

http://www.bloomberg...ets/rates-bonds

 

In Europe it's a more complicated story. While Spanish, Portugese and Italian bonds are slightly positive, German and Swiss bonds are negative. People wonder how on earth can this happen. It's spain, portugal, italy and ireland which are deleveraging, while Germany and Switzerland has been performing relatively well and their bond yields drop. That's because the spanish, portugese and other buyers are piling on to German bonds, which they consider a safe haven. 

 

Distortion, distortion, distortion everywhere.  

 

Until the deleveraging process completes, these distortions would continue.You would think the deleveraging would complete some day. But both the public and private sector are only levering up, more and more. Debt (both private and public sector) only keeps exploding. The zero percent interest rates or NIRP (perhaps in the future) will never end until this deleveraging is complete. Once the deleveraging is complete, we have a another big problem to deal with. How will the Fed unwind it's 4.5 trillion balance sheet ? Imagine what would happen to the bond yields when these trillions of bonds are dumped into the market by the Fed ? Or will it ever ? Can it ?

 

It's a Friggin' mess !

 

200 months from 2009 is 2025. By 2025, Fib's 200 month MA will be near zero. Then we will be in a eternal bubble forever :-)

 

 

 

P.S - Thankfully we don't need all these macro-economics to trade the markets. Simple price and MA are sufficient. 

 

Nav I know why since QE but since QE ended they continue to drop. As you stated flight to safety but now flight to safety and the market continues to rise...has this ever happened ?

[NAV]

 

 

 

Take the last 2 bear markets(2000-2003)-(2007-2009) as the stock market tanked the 30 year Treasury's yield dropped... flight to safety. Now you have the market rising and Treasury's yields dropping the opposite of what happened. Why?

 

Thanks.

 

You must be kidding, if you say you don't know the answer for this.

 

In the U.S, it's one word "QE".

 

The fed has spent a few trillion buying the long bonds and mortgage securities. As a result, Bond prices rise and yields drop. Simple.

 

After the QE ended, the drop is because of the safe haven trade.

 

Most of the western world have zero or negative yields 

http://www.bloomberg...ets/rates-bonds

 

In Europe it's a more complicated story. While Spanish, Portugese and Italian bonds are slightly positive, German and Swiss bonds are negative. People wonder how on earth can this happen. It's spain, portugal, italy and ireland which are deleveraging, while Germany and Switzerland has been performing relatively well and their bond yields drop. That's because the spanish, portugese and other buyers are piling on to German bonds, which they consider a safe haven. 

 

Distortion, distortion, distortion everywhere.  

 

Until the deleveraging process completes, these distortions would continue.You would think the deleveraging would complete some day. But both the public and private sector are only levering up, more and more. Debt (both private and public sector) only keeps exploding. The zero percent interest rates or NIRP (perhaps in the future) will never end until this deleveraging is complete. Once the deleveraging is complete, we have a another big problem to deal with. How will the Fed unwind it's 4.5 trillion balance sheet ? Imagine what would happen to the bond yields when these trillions of bonds are dumped into the market by the Fed ? Or will it ever ? Can it ?

 

It's a Friggin' mess !

 

200 months from 2009 is 2025. By 2025, Fib's 200 month MA will be near zero. Then we will be in a eternal bubble forever :-)

 

 

 

P.S - Thankfully we don't need all these macro-economics to trade the markets. Simple price and MA are sufficient. 

 

Nav I know why since QE but since QE ended they continue to drop. As you stated flight to safety but now flight to safety and the market continues to rise...has this ever happened ?

 

 

Of course. QE eneded in 2014. Since then yields have been dropping and the stock market has been rising. Flight to safety or we could call it flight to "Relative safety" - cuz none of the govt bonds are safe anymore.

 

European and Japanese long bond yields have been negative. So in the land of the blind, the one eyed man (U.S long bonds) is the king !

Edited by NAV, 10 July 2016 - 11:14 AM.

[MDurkin]

 

 

 

 

Take the last 2 bear markets(2000-2003)-(2007-2009) as the stock market tanked the 30 year Treasury's yield dropped... flight to safety. Now you have the market rising and Treasury's yields dropping the opposite of what happened. Why?

 

Thanks.

 

You must be kidding, if you say you don't know the answer for this.

 

In the U.S, it's one word "QE".

 

The fed has spent a few trillion buying the long bonds and mortgage securities. As a result, Bond prices rise and yields drop. Simple.

 

After the QE ended, the drop is because of the safe haven trade.

 

Most of the western world have zero or negative yields 

http://www.bloomberg...ets/rates-bonds

 

In Europe it's a more complicated story. While Spanish, Portugese and Italian bonds are slightly positive, German and Swiss bonds are negative. People wonder how on earth can this happen. It's spain, portugal, italy and ireland which are deleveraging, while Germany and Switzerland has been performing relatively well and their bond yields drop. That's because the spanish, portugese and other buyers are piling on to German bonds, which they consider a safe haven. 

 

Distortion, distortion, distortion everywhere.  

 

Until the deleveraging process completes, these distortions would continue.You would think the deleveraging would complete some day. But both the public and private sector are only levering up, more and more. Debt (both private and public sector) only keeps exploding. The zero percent interest rates or NIRP (perhaps in the future) will never end until this deleveraging is complete. Once the deleveraging is complete, we have a another big problem to deal with. How will the Fed unwind it's 4.5 trillion balance sheet ? Imagine what would happen to the bond yields when these trillions of bonds are dumped into the market by the Fed ? Or will it ever ? Can it ?

 

It's a Friggin' mess !

 

200 months from 2009 is 2025. By 2025, Fib's 200 month MA will be near zero. Then we will be in a eternal bubble forever :-)

 

 

 

P.S - Thankfully we don't need all these macro-economics to trade the markets. Simple price and MA are sufficient. 

 

Nav I know why since QE but since QE ended they continue to drop. As you stated flight to safety but now flight to safety and the market continues to rise...has this ever happened ?

 

 

Of course. QE eneded in 2014. Since then yields have been dropping and the stock market has been rising. Flight to safety or we could call it flight to "Relative safety" - cuz none of the govt bonds are safe anymore.

 

European and Japanese long bond yields have been negative. So in the land of the blind, the one eyed man (U.S long bonds) is the king !

 

Is it truly different this time... 30 year Treasury to 1 percent Dow to 30000 plus? We live in Alice in Wonderland's world... down the rabbit hole we go.

[Len]

Tony turned bullish long term. After being bearish a couple of months.

[dasein]

who is Tony?