tag:blogger.com,1999:blog-6616959642391988608.post7735714617416393832..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Why the end of QE2 is good newsScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-6616959642391988608.post-76322572546627843292011-05-11T07:26:03.012-07:002011-05-11T07:26:03.012-07:00QE II was obviously a main factor in the last 2 ye...QE II was obviously a main factor in the last 2 years for solid corporate and market growth.<br /><br />I can't wrap my head around no QE II 'still being' good if it is taken away.TradingStrategyLetter - Weekly Summaryhttps://www.blogger.com/profile/06430136667577107255noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-87678010654941621572011-05-10T11:52:18.123-07:002011-05-10T11:52:18.123-07:00FanCan, KT Cat, AdamSmith-
There is a global capi...FanCan, KT Cat, AdamSmith-<br /><br />There is a global capital glut. The question is not whether the USA can sell bonds, but whether investors have anywhere to park their capital. <br /><br />That said, I concur the USA needs to get back to balanced federal budgets. However, a stimulative monetary policy is also a good choice.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-72609527624379647102011-05-10T11:03:20.678-07:002011-05-10T11:03:20.678-07:00Scott, large sovereign and private holders of Trea...Scott, large sovereign and private holders of Treasury debt won't pound it out because it would implode the value of their holdings. They are hostages. However, they can lay off their US Treasury exposure by entering into long term hard asset supply contracts in USD - which is what China is doing at a frantic pace. In the meantime, they are not buying more Treasuries.AdamSmithhttps://www.blogger.com/profile/02094787578421026455noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-48711879947228603412011-05-10T10:43:25.861-07:002011-05-10T10:43:25.861-07:00"KTC: There is a huge difference between Gree..."KTC: There is a huge difference between Greece (and the other PIGS) and the US: we can print dollars to pay our debt, but they cannot. They can become insolvent, we cannot."<br /><br />Just think about what you've said. Like the slowly boiled frog, we've reached the point where we're printing $100B a month to cover our debts and we still think things are fine. It's K T Cathttps://www.blogger.com/profile/10259428595745509790noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-59038801773308893982011-05-10T09:21:14.253-07:002011-05-10T09:21:14.253-07:00K T Cat-
There may be a point where can't han...K T Cat-<br /><br />There may be a point where can't handle 100 billion a week/month or whatever. I don't see that as a concern today or even this year. There just isn't alot of places to park 100-250 billion. China, Saudi Arabia, Calpers, Pimco(bill gross will be back) will all be major buyers of treasuries should they start to decline near 4%. Long-term could be a different storyacrossthecurvehttps://www.blogger.com/profile/16425254934059527965noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-28334633652414225042011-05-10T09:17:11.618-07:002011-05-10T09:17:11.618-07:00Scott:
Over and over again, we are hearing about ...Scott:<br /><br />Over and over again, we are hearing about exports boosting US growth. That 1Q growth was 1.4 percent, and that increased exports accounted for 1 percent of that. In other words, without export growth, we are nearly dead in the water, in the !Q.<br /><br />We also hear (and I think truthfully) that exports have been boosted by a lower exchange rate for the dollar.<br /><br />If Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-76880941796304520242011-05-10T09:12:18.670-07:002011-05-10T09:12:18.670-07:00I would argue that the price of T-notes and T-bond...I would argue that the price of T-notes and T-bonds is determined by the market's willingness to hold the outstanding stock of fixed income securities, which is much, much larger than the new issuance of those securities and the Fed's QE2 purchases. Fed purchases on the margin do not determine the value of Treasuries or the value of all outstanding bonds (which are all priced relative to Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-8534243937124189602011-05-10T09:06:11.088-07:002011-05-10T09:06:11.088-07:00There may be a legitimate third scenario. About 90...There may be a legitimate third scenario. About 90% of T bonds at auction were bought by the fed over past months at low yields. When QE2 ends, who will want to buy low yielding bonds denominated in a weak and falling currency? Not the Chinese, Japanese or Euros. Not Pimco. Why not a buyers' strike forcing higher yields?AdamSmithhttps://www.blogger.com/profile/02094787578421026455noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-81581205113634196572011-05-10T08:58:58.345-07:002011-05-10T08:58:58.345-07:00KTC: There is a huge difference between Greece (an...KTC: There is a huge difference between Greece (and the other PIGS) and the US: we can print dollars to pay our debt, but they cannot. They can become insolvent, we cannot.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-4040786141216107312011-05-10T07:58:56.228-07:002011-05-10T07:58:56.228-07:00This was a great article Mr. G., that,, I believe ...This was a great article Mr. G., that,, I believe goes straight to the core of the problem that the US is facing, the fiscal one, especially under S&P's negative watch, they just don't have a choice, lose your AAA status, and this is Armaggedon (as Cramer would say)...looks like this stimulus put a band-aid, but did not solve anything, quite to the contrary....but I bet you, somehow, Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-50397404460324504712011-05-10T06:15:07.599-07:002011-05-10T06:15:07.599-07:00A link and a response.<a href="http://ktcatspost.blogspot.com/2011/05/instability.html" rel="nofollow">A link and a response</a>.K T Cathttps://www.blogger.com/profile/10259428595745509790noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-65584669619554081692011-05-10T05:49:46.935-07:002011-05-10T05:49:46.935-07:00Thanks for posting these charts and your analysis....Thanks for posting these charts and your analysis. The only thing I'd add is that standard analysis works until it doesn't. Witness Greece. At some point the sheer volume of outstanding debt becomes the dominant factor and then all the conventional models collapse as investors flee from an insolvent debtor.<br /><br />Up until the last 6 months (12?), Greece could have been said to K T Cathttps://www.blogger.com/profile/10259428595745509790noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-67860865162915333582011-05-10T02:00:14.210-07:002011-05-10T02:00:14.210-07:00Scott, latest cover of The Economist (line chart o...Scott, latest cover of The Economist (line chart of a "crash" photoshopped onto Miss Liberty's tablet) wondering what's wrong with America's economy, should fire up all our contrarian instincts, in my humble opinion.<br /><br />Saludos.Vespasianushttps://www.blogger.com/profile/08430697851208423321noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-71801291593925579322011-05-09T22:16:20.203-07:002011-05-09T22:16:20.203-07:00Markets are smart, but at times they can be wrong,...Markets are smart, but at times they can be wrong, very wrong. It will be interesting to see if I'm right.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-83761627590376374622011-05-09T18:49:01.881-07:002011-05-09T18:49:01.881-07:00Ballsy call saying the treasury mkt is out to lunc...Ballsy call saying the treasury mkt is out to lunch. Fair enough, but ballsy.dhhttps://www.blogger.com/profile/12507215467812536351noreply@blogger.com