tag:blogger.com,1999:blog-6616959642391988608.post7852595171131210483..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Walls of worry updateScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger26125tag:blogger.com,1999:blog-6616959642391988608.post-60065878422242221862015-10-01T10:29:39.950-07:002015-10-01T10:29:39.950-07:00I'm thinking that super ultra low swap spreads...I'm thinking that super ultra low swap spreads are a sign of negative economic outlook, but also with the outlook that the financial system will remain liquid. Excess reserves, galore. Central banks ultra accommodating. Just blabbing.Johnny Bee Dawghttps://www.blogger.com/profile/06836875640973245734noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-22781267743810085512015-10-01T10:24:22.970-07:002015-10-01T10:24:22.970-07:00Johnny: that's correct. Swap spreads are like ...Johnny: that's correct. Swap spreads are like the price of trading away risk. If they are low it must be because either there are not a lot of people who want to trade away risk and/or there are a lot of people who are comfortable taking on risk. Low swap spreads are thus an indication of a market that is comfortable with risk. What is unusual is that the equity market and the corporate bond Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-9881755285075022692015-10-01T10:15:20.396-07:002015-10-01T10:15:20.396-07:00Don't people engage in swaps when they want to...Don't people engage in swaps when they want to trade away their risk of owning fixed rates, in order to obtain a variable rate? From the bond market behavior, it looks like people are just fine holding their current coupons. Could it be that low swap spreads are also a sign that markets are pricing in lower growth, but with little systemic risk? I don't want to own a variable rate justJohnny Bee Dawghttps://www.blogger.com/profile/06836875640973245734noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-23171239251241744232015-10-01T09:08:33.008-07:002015-10-01T09:08:33.008-07:00Ben Jamin, a lot of very critical comments within ...Ben Jamin, a lot of very critical comments within the past year<br />about Annaly Capital Management front office, with most negative.<br /><br />There is also the suggestion, that REITS are over priced.Hanshttps://www.blogger.com/profile/05183141792723754273noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-67678453031271105222015-10-01T08:48:41.432-07:002015-10-01T08:48:41.432-07:00Jarrod: I too enjoy the comments, especially when ...Jarrod: I too enjoy the comments, especially when they are critical of my positions. It's good feedback and it helps keep me on my toes. If everyone agreed with me I would automatically think I might be wrong. Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-48538793123472402412015-10-01T08:46:30.125-07:002015-10-01T08:46:30.125-07:00William: good points. There's lots of weak gro...William: good points. There's lots of weak growth out there. But I would just note that Japan is the main economy where weak growth is "normal." In the past 20 quarters, Japan's has experienced negative GDP growth in 11 of those quarters, and only one quarter registered growth in excess of 1.5%. Canada's economy is dominated by commodities, which have taken a beating this Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-11570574037776180452015-10-01T06:03:27.947-07:002015-10-01T06:03:27.947-07:00RE: two year swap spreads, inverted yield curves, ...RE: two year swap spreads, inverted yield curves, recessions<br /><br />I would just point out that in spite of the low swap spreads and lack of inverted yields curves, Canada experienced negative GDP growth in the first and second quarters of 2015, Japan reported negative GDP growth in the first quarter and was projected to be negative again in the second. The Netherlands, Belgium and Finland Williamhttps://www.blogger.com/profile/04418491109912775561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-19712372593603940722015-10-01T05:48:34.448-07:002015-10-01T05:48:34.448-07:00Comment to no one and all: if interest rates never...Comment to no one and all: if interest rates never go back up, are such stocks as NLY good buys?Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-47208156717738864132015-10-01T04:37:15.994-07:002015-10-01T04:37:15.994-07:00One of my favorite bullish indicators is to track ...One of my favorite bullish indicators is to track how intensely Scott, your posts are rebuffed by commenters here!<br /><br />As usual. Great work, fantastic consistent analysis that has proven spot on again. Anonymoushttps://www.blogger.com/profile/03451707491801472903noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-68751070234427683992015-09-30T18:42:27.250-07:002015-09-30T18:42:27.250-07:00Dawg, there is no nexus, other than a general dire...Dawg, there is no nexus, other than a general directional trend between market indexes<br />and S&P 500 earnings..If this was the case, indexes would have dropped by 98%. <br /><br />http://www.multpl.com/s-p-500-earnings/table<br /><br />http://verybestcdrates.com/Charts/2009/0725_SnP500_Earnings_Adjusted_For_Inflation.html<br /><br />I do agree with you, that the authors link of phantom Hanshttps://www.blogger.com/profile/05183141792723754273noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-6267262825664380822015-09-29T20:03:17.050-07:002015-09-29T20:03:17.050-07:00Hans:
You seem to imply that stocks going up 3 1/...Hans:<br /><br />You seem to imply that stocks going up 3 1/2 times their value from their 2009 lows is "too much". However, S&P500 earnings went up more than 10 times during that same period. Earnings per share had artificially collapsed, just like stock prices did. Stocks went up less than earnings did. http://www.macrotrends.net/1324/s-p-500-earnings-history<br /><br />That Johnny Bee Dawghttps://www.blogger.com/profile/06836875640973245734noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-40695382743816469422015-09-29T19:21:53.886-07:002015-09-29T19:21:53.886-07:00Re: contradictory views on the meaning of low swap...Re: contradictory views on the meaning of low swap spreads. (xr-3609 asked: "Are these two views as diametrically opposed as they appear to be?")<br /><br />I must admit to being amazed to read that very low swap spreads in the U.S. are a sign of illiquidity and a portent of disaster, when to me they are a sign of excellent liquidity, a strong banking sector, and healthy financial Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-90697274879751398072015-09-29T17:21:45.005-07:002015-09-29T17:21:45.005-07:00This comment has been removed by the author.Hanshttps://www.blogger.com/profile/05183141792723754273noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-76773761029706231292015-09-29T17:21:44.792-07:002015-09-29T17:21:44.792-07:00Here is the link I failed to include: http://www.a...Here is the link I failed to include: http://www.advisorperspectives.com/dshort/guest/Lance-Roberts-130514-Bull-Market-Questions.php.<br /><br />You can see the cause and effects with the ever increase FRB increasing<br />balance sheet.Hanshttps://www.blogger.com/profile/05183141792723754273noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-22058108545612972332015-09-29T17:18:49.197-07:002015-09-29T17:18:49.197-07:00Mr Dawg, of course the FRB controls interest rates...Mr Dawg, of course the FRB controls interest rates; there is little doubt about<br />that.<br /><br />I have no answer for you question; best to ask the author.<br /><br />IMHO, the 2008 recession was part and parcel due to governmental unit polices..It <br />drove the economy into an expansion which it can not sustain; along with distorting<br />capital investments.<br /><br />Today's stock Hanshttps://www.blogger.com/profile/05183141792723754273noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-77281752162861170422015-09-29T17:00:38.957-07:002015-09-29T17:00:38.957-07:00I am climbing the walls too! I am worried!I am climbing the walls too! I am worried!Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-42867711135395404892015-09-29T11:31:36.783-07:002015-09-29T11:31:36.783-07:00Scott. Remembering the end of the Bush administra...Scott. Remembering the end of the Bush administration, has me thinking how bad this next year could be. How many oil drillers (shale) workers will be let go this year? I don't know the answer but would appericate anyone else who does. Europe seems to be looking for a New reason to collapse. Anonymoushttps://www.blogger.com/profile/09388308734042732343noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-52609348520090864242015-09-29T08:41:27.883-07:002015-09-29T08:41:27.883-07:00Hans:
You think the Fed controls interest rates? ...Hans:<br />You think the Fed controls interest rates? You sure about that?<br /><br />What accounting rule changes occurred which are allowing corporations to state extra profits?<br /><br />In my opinion, there was nothing "natural" about the 2008 decline, and stocks are just getting back to where they should have been.<br />Johnny Bee Dawghttps://www.blogger.com/profile/06836875640973245734noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-72197913563570314132015-09-29T06:42:54.559-07:002015-09-29T06:42:54.559-07:00Scott:"Swap spreads stand out in a field of n...Scott:"Swap spreads stand out in a field of nerves, because at current level they signal that systemic risk is virtually nonexistent"<br /><br />Jeffery Snider http://www.alhambrapartners.com/2015/09/25/ignore-swap-spreads-at-your-own-peril/<br />believes: "In what might be the most conclusive indication of illiquidity in the entire spectrum of them, and the most troubling, the xr-3609https://www.blogger.com/profile/08361430517471885323noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-71714330872510069722015-09-29T06:25:42.843-07:002015-09-29T06:25:42.843-07:00"As we enter into 2015, analyst calls for a c..."As we enter into 2015, analyst calls for a continued "bull market" advance have never been louder. There have been a litany of articles written recently discussing how the stock market is set for a continued bull rally. The are some primary points that are common threads among each of these articles which are: 1) interest rates are low, 2) corporate profitability is high, and; 3) Hanshttps://www.blogger.com/profile/05183141792723754273noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-2090143669009280362015-09-29T01:28:08.907-07:002015-09-29T01:28:08.907-07:00Here's a recent bloomberg article on the swap ...Here's a recent bloomberg article on the swap spreads.<br /><br />http://www.bloomberg.com/news/articles/2015-09-24/it-s-all-perverted-now-as-u-s-swap-spreads-tumble-below-zero<br /><br />"It's All `Perverted' Now as U.S. Swap Spreads Tumble Below Zero"Royhttps://www.blogger.com/profile/09325498485905547125noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-67244404153850898332015-09-29T00:41:48.610-07:002015-09-29T00:41:48.610-07:00Scott,
Thank you for another interesting article....Scott,<br /><br />Thank you for another interesting article.<br /><br />1. "2-yr swap spreads are unusually low"<br /><br />Why, in your opinion, are they "unusually" low? Could it be due to some technical reason (as in LIBOR convergence, duration etc.)?<br /><br />2. "only rising credit spreads can be found today, but as the chart above shows, they are not critically Royhttps://www.blogger.com/profile/09325498485905547125noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-34328325740608969302015-09-28T20:02:14.440-07:002015-09-28T20:02:14.440-07:00honestcreditguy said...
Lows and highs are often r...honestcreditguy said...<br />Lows and highs are often re-tested, most likely we will retest the August lows over the next 10 days....Markets should be worried. China is imploding..much more than we know...<br /><br />Walls of worries sometimes do tumble down....<br /><br />September 22, 2015 at 8:34 PM honestcreditguyhttps://www.blogger.com/profile/04753136939700776989noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-31982627512652361512015-09-28T19:36:14.111-07:002015-09-28T19:36:14.111-07:00Scott Grannis wrote: "It's worth repeatin...Scott Grannis wrote: "It's worth repeating that every recession in the past 60 years has been preceded by a severe tightening of monetary policy, which can be seen in a strong and rising dollar, high real yields, a flat to inverted yield curve, and rising credit spreads."<br /><br />But, Scott, your fundamental fallacy is not to recognize that since 2008, the US and Global economiesWilliamhttps://www.blogger.com/profile/04418491109912775561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-29951585350822151862015-09-28T18:02:38.306-07:002015-09-28T18:02:38.306-07:00I think it's interesting that the last 3 major...I think it's interesting that the last 3 major market declines this month coincided with the release of policy statements from leading candidates. There was a 400 point reversal down as Jeb Bush announced his economic plan to punish the wealthy with extra taxes on Sept 9. The Biotech and Drug sectors crashed instantly after Hillary's famous Tweet about capping drug prices and profits. Johnny Bee Dawghttps://www.blogger.com/profile/06836875640973245734noreply@blogger.com