correlationstonone:

crazynutjob:

Corporate debt seems to be benefiting heavily from the new money, and it seems silly to bet against the stock market while the debt market is so cheery. You’ve got me there. However, commodities can and have been bid up without corresponding increases in consumption before. Heck, this is going on now. So you are asserting that one trend will break while another continues. Why prefer one inconsistency over another?

Because great trades are never on TV until they are bad trades, and gold is on TV.  If there’s a correction - this is just my speculation so take it for what it’s worth - it will be in the fundamentals of demand, because from a cyclical standpoint we still have lots of inventory everywhere and no jobs to give people the funds to deplete them at solid YOY comparables.

So you’ll have lots of profit on little consumption.  Look at Ford’s release today.  What do you think it looks like in steel markets and debt markets and stock markets when you profit on falling sales and lay off workers?

On a side note, I assume you’ve read many of the same reports going around about “sell the news.” Kind of a jerk move to make me defend an outside position you are familiar with. Also, can I assume you would not be surprised if a sell-off occurred?

I find it difficult to make predictions when little guys like us are the only people who have to play with our hands revealed.  In a QE environment it’s difficult to predict asset price declines, particularly in stocks, given our recent experiences. Although, maybe this time September was the bid-up and we’re all supposed to invert all comparable environments given all the sharking.

Who the fuck knows. It all makes me pretty glad to have FINRA keeping me from doing any trading outside of superlong windows.  I’d hate to actually try to make money against these HFT-equipped Beltway-insider bankers.

There are fairly significant wildcards still outstanding. Germany just began the process of labeling the US a currency manipulator. Greece continues to do everything it can to resume its fall. An equal amount of liquidity from QE2 can be sucked up by foreclosuregate. A trillion here and a trillion there can really add up.

Germany calling anyone else a currency manipulator will have the entire EU doing one of those low, dark chuckles. Yeah okay, Merkel. What’s a stronger cliche for pots and kettles?

I’m with you on liquidity, but it’s already gone.  Banks are going to have a shitty third quarter, that’s pretty much written in stone tea leaves at this point.  We’re about to find out that some of the biggest lending problems in the depths of the crisis leading into today were caused by flawed acquisitions and cost-cuts that basically destroyed the very basic functionality of mortgage origination and servicing.

We dumped TARP into institutions that could not lend from an administrative standpoint, to say nothing of risk.  Yaaaay.

I’ve got nothing to add to this. Thanks for the discussion tonight.