OFFICIAL FINANCIAL MARKETS & ECONOMY THREAD

PS NTers who believe in Illuminati conspiracies-- the hedge fund/banking world is a perfect case study for you guys to prove small parts of your beliefs and totally disprove the essence of your perspective. Yes, there are people who quite literally pull the strings behind all world events. The difference is, they're not all on one side (there's a million sides and only a few very legitimate/powerful ones but the alliances are constantly shifting) and it isn't a matter of being "born" into it or raised into it (especially nowadays) as much as earning your way into it, which anyone can do in a developed economy.

It's just a matter of making enough money to where your dollars have a real say on things, and in the process meeting the people who will be shaping and dictating policy going forward as well. If you go to LSE or MIT or Stanford, your roommate you're getting drunk with every weekend may be the next Fed chairman one day, the RA for your hall may be the next big hedge fund manager running 2 & 20 on AUM in the billions, your girlfriend may be the next IMF chief economist. And it isn't just the sick schools obviously, if you can make money, you can make enough money to where your dollars actually are impacting the world's course of events. And it isn't just your connections, because presumably you can be the next President etc as well. Obama went to Occidental undergrad after all. Yes, he went to Harvard Law, but anyone can go to Harvard Law if they're smart and hardworking enough.

"Money talks" is one of the most accurate idioms you will ever hear. And for those who think it's impossible to ever make billions without the pedigree, all you need to see is short bios of a small but significant portion of the Forbes 400. You may assume by my writing that I learned all of this at a top-notch school and after working at top-notch hedge funds with top-notch elites. The fact is, I'm a math major senior at the University of Michigan and although I have hedge fund experience, I learned almost all of this on my own just using the internet as my primary tool.

Illuminati conspiracies = people's excuses used to hide the fact that the real reason they're not running the world is because they just weren't plain hungry enough to grind their way to the top and ignore the naysayers, eventually leading them to becoming self-defeatist naysayers who hide behind pseudointellectual claims of understanding the real "inner workings."

Soros's dad escaped the Holocaust and George was a philosophy major at Oxford who had no interest in finance at first. Kovner was driving a cab after dropping out of his Harvard PhD program when he discovered trading. Bush vs Kerry came down to Kovner vs Soros, in fact, and the American Enterprise Institute (of which Cheney was a VP and which Kovner funded) was basically singlehandedly behind the uprising of the neocon bloc and their hijacking of the GOP that led to Bush's presidency. The pedigree is important, but not vital, and the pedigree itself is attainable through hard work. People forget Andrew Carnegie was a college dropout Irish immigrant that created the world's first billion-dollar business, which he was literally able to cash out of successfully, using none other than JP Morgan as the financier and purchaser, who aggregated Carnegie's steel enterprises and his competitors into a conglomerate known as US Steel. No illuminati there, just hard work and the hunger for the next dollar.

My point with this rant: sure, if you're born into a poor, torn household, you're at a very striking disadvantage compared to being born into an affluent, stable household with successful role models. But if you're not born into the "elite," that does not at all mean you are limited in the potential success you can have or restricted from the upper echelon of gamechangers. In fact, any disadvantage you do have, no matter how significant, isn't going to be vital/fatal. You can 100% earn "privileged" life/power/information. Making money is the surest way to it. Some people look at money as potential purchasing power for material goods. Other people look at money as a scoreboard by which to keep track of your life's progress (not every aspect of your life, but the worldly aspects, especially regarding power & success) and leverage to get what you want.
 
I'll be following along. I have much to learn about what's going on in Europe.
It seems like the last few down days in US equities has been related to Chinese tightening concerns. Whenever SEE and Hang Seng drops 2%, the Dow drops 1%. Is this faulty thinking?
 
I'll be following along. I have much to learn about what's going on in Europe.
It seems like the last few down days in US equities has been related to Chinese tightening concerns. Whenever SEE and Hang Seng drops 2%, the Dow drops 1%. Is this faulty thinking?
 
Welcome back.
pimp.gif
 
Nigel Farage going in.
eek.gif

Speaking on Ireland.... 

"They suffered with low interest rates, a false boom, and a massive bust."

sounds familiar...
 
Nigel Farage going in.
eek.gif

Speaking on Ireland.... 

"They suffered with low interest rates, a false boom, and a massive bust."

sounds familiar...
 
Good to see you back on NT. I've been subscribing to Shadow Capitalism for a while.

As far as guest contributor's on ZH go, pretty much you and Reggie are the only ones with insight worth anything.
 
Good to see you back on NT. I've been subscribing to Shadow Capitalism for a while.

As far as guest contributor's on ZH go, pretty much you and Reggie are the only ones with insight worth anything.
 
It seems like the last few down days in US equities has been related to Chinese tightening concerns. Whenever SEE and Hang Seng drops 2%, the Dow drops 1%. Is this faulty thinking?


Chinese tightening definitely was behind recent selloffs in risk, but whether selloffs in China/Hong Kong translate to selloffs in the US is still up in the air in my opinion. I expect copper, Australian Dollar, silver, etc to selloff with China/Hong Kong, but oil, US equity, and gold are perhaps showing a disconnect from Asian risk.

The real issue with contagion is definitely USD funding. If USD rallies (which I expect it to for the first half of 2011) to a significant enough degree to lock-up liquid USD funding in repo/swap/commercial paper markets, then you get recoupling and it's USD up, risk down and USD down, risk up, with US equity also being included within the "risk" category. However, unless that occurs, I think we could see USD & US equity rally together, while China/Hong Kong/Australia/copper/NJA/EM/QE 2 plays decline based off of inflation and consequent hiking risk.

Too early to tell for sure though, the dust hasn't settled yet on whether the QE trade will be put back on and send USD lower or if the trade is over due to USD demand stemming from the Eurozone crisis and the inflation caused by QE being exported to surplus nations that are having to get very hawkish very fast, moving the carry trade out of these high-yielders into the earlier hike cycle currencies like CAD.

Also, I think US equity will rally as US bonds decline, and that even if the QE trade resumes (unlikely in my opinion given the potential for QE out of the ECB by Q2 of next year in my opinion, but there's still considerable time until then and no one is really discounting ECB easing this early along in the process), UST yields will rise. If you take a bond market decline and US equity rally as likely scenarios, then you're betting on a US stock rally in the midst of a USD rally due to the rates differentials trade, moving the carry funding currency back to JPY (which I've been expecting, positioned for, and profiting off of). As JPY declines while China/NJA/EM are hiking to fight inflation, the selloffs in SSEC/Hang Seng/AUD/etc get even further exacerbated by the incremental loss of competitive export advantage with a suddenly declining JPY again, because Japan is a huge surplus/exporter nation as well. Putting it all together, this would mean that US stocks rally, USD rallies, and China/Hong Kong selloff. Not necessarily the only possible scenario in my opinion, but likely in the near term, and definitely conceivable as concurrent market themes, despite what a lot of people think about US stock/USD inverse correlations.
 
It seems like the last few down days in US equities has been related to Chinese tightening concerns. Whenever SEE and Hang Seng drops 2%, the Dow drops 1%. Is this faulty thinking?


Chinese tightening definitely was behind recent selloffs in risk, but whether selloffs in China/Hong Kong translate to selloffs in the US is still up in the air in my opinion. I expect copper, Australian Dollar, silver, etc to selloff with China/Hong Kong, but oil, US equity, and gold are perhaps showing a disconnect from Asian risk.

The real issue with contagion is definitely USD funding. If USD rallies (which I expect it to for the first half of 2011) to a significant enough degree to lock-up liquid USD funding in repo/swap/commercial paper markets, then you get recoupling and it's USD up, risk down and USD down, risk up, with US equity also being included within the "risk" category. However, unless that occurs, I think we could see USD & US equity rally together, while China/Hong Kong/Australia/copper/NJA/EM/QE 2 plays decline based off of inflation and consequent hiking risk.

Too early to tell for sure though, the dust hasn't settled yet on whether the QE trade will be put back on and send USD lower or if the trade is over due to USD demand stemming from the Eurozone crisis and the inflation caused by QE being exported to surplus nations that are having to get very hawkish very fast, moving the carry trade out of these high-yielders into the earlier hike cycle currencies like CAD.

Also, I think US equity will rally as US bonds decline, and that even if the QE trade resumes (unlikely in my opinion given the potential for QE out of the ECB by Q2 of next year in my opinion, but there's still considerable time until then and no one is really discounting ECB easing this early along in the process), UST yields will rise. If you take a bond market decline and US equity rally as likely scenarios, then you're betting on a US stock rally in the midst of a USD rally due to the rates differentials trade, moving the carry funding currency back to JPY (which I've been expecting, positioned for, and profiting off of). As JPY declines while China/NJA/EM are hiking to fight inflation, the selloffs in SSEC/Hang Seng/AUD/etc get even further exacerbated by the incremental loss of competitive export advantage with a suddenly declining JPY again, because Japan is a huge surplus/exporter nation as well. Putting it all together, this would mean that US stocks rally, USD rallies, and China/Hong Kong selloff. Not necessarily the only possible scenario in my opinion, but likely in the near term, and definitely conceivable as concurrent market themes, despite what a lot of people think about US stock/USD inverse correlations.
 
Originally Posted by Dey Know Yayo

It seems like the last few down days in US equities has been related to Chinese tightening concerns. Whenever SEE and Hang Seng drops 2%, the Dow drops 1%. Is this faulty thinking?


Chinese tightening definitely was behind recent selloffs in risk, but whether selloffs in China/Hong Kong translate to selloffs in the US is still up in the air in my opinion. I expect copper, Australian Dollar, silver, etc to selloff with China/Hong Kong, but oil, US equity, and gold are perhaps showing a disconnect from Asian risk.

The real issue with contagion is definitely USD funding. If USD rallies (which I expect it to for the first half of 2011) to a significant enough degree to lock-up liquid USD funding in repo/swap/commercial paper markets, then you get recoupling and it's USD up, risk down and USD down, risk up, with US equity also being included within the "risk" category. However, unless that occurs, I think we could see USD & US equity rally together, while China/Hong Kong/Australia/copper/NJA/EM/QE 2 plays decline based off of inflation and consequent hiking risk.

Too early to tell for sure though, the dust hasn't settled yet on whether the QE trade will be put back on and send USD lower or if the trade is over due to USD demand stemming from the Eurozone crisis and the inflation caused by QE being exported to surplus nations that are having to get very hawkish very fast, moving the carry trade out of these high-yielders into the earlier hike cycle currencies like CAD.

Also, I think US equity will rally as US bonds decline, and that even if the QE trade resumes (unlikely in my opinion given the potential for QE out of the ECB by Q2 of next year in my opinion, but there's still considerable time until then and no one is really discounting ECB easing this early along in the process), UST yields will rise. If you take a bond market decline and US equity rally as likely scenarios, then you're betting on a US stock rally in the midst of a USD rally due to the rates differentials trade, moving the carry funding currency back to JPY (which I've been expecting, positioned for, and profiting off of). As JPY declines while China/NJA/EM are hiking to fight inflation, the selloffs in SSEC/Hang Seng/AUD/etc get even further exacerbated by the incremental loss of competitive export advantage with a suddenly declining JPY again, because Japan is a huge surplus/exporter nation as well. Putting it all together, this would mean that US stocks rally, USD rallies, and China/Hong Kong selloff. Not necessarily the only possible scenario in my opinion, but likely in the near term, and definitely conceivable as concurrent market themes, despite what a lot of people think about US stock/USD inverse correlations.
Wow. Very very interesting. Can't wait to see how this all plays out.  Thanks.
 
Originally Posted by Dey Know Yayo

It seems like the last few down days in US equities has been related to Chinese tightening concerns. Whenever SEE and Hang Seng drops 2%, the Dow drops 1%. Is this faulty thinking?


Chinese tightening definitely was behind recent selloffs in risk, but whether selloffs in China/Hong Kong translate to selloffs in the US is still up in the air in my opinion. I expect copper, Australian Dollar, silver, etc to selloff with China/Hong Kong, but oil, US equity, and gold are perhaps showing a disconnect from Asian risk.

The real issue with contagion is definitely USD funding. If USD rallies (which I expect it to for the first half of 2011) to a significant enough degree to lock-up liquid USD funding in repo/swap/commercial paper markets, then you get recoupling and it's USD up, risk down and USD down, risk up, with US equity also being included within the "risk" category. However, unless that occurs, I think we could see USD & US equity rally together, while China/Hong Kong/Australia/copper/NJA/EM/QE 2 plays decline based off of inflation and consequent hiking risk.

Too early to tell for sure though, the dust hasn't settled yet on whether the QE trade will be put back on and send USD lower or if the trade is over due to USD demand stemming from the Eurozone crisis and the inflation caused by QE being exported to surplus nations that are having to get very hawkish very fast, moving the carry trade out of these high-yielders into the earlier hike cycle currencies like CAD.

Also, I think US equity will rally as US bonds decline, and that even if the QE trade resumes (unlikely in my opinion given the potential for QE out of the ECB by Q2 of next year in my opinion, but there's still considerable time until then and no one is really discounting ECB easing this early along in the process), UST yields will rise. If you take a bond market decline and US equity rally as likely scenarios, then you're betting on a US stock rally in the midst of a USD rally due to the rates differentials trade, moving the carry funding currency back to JPY (which I've been expecting, positioned for, and profiting off of). As JPY declines while China/NJA/EM are hiking to fight inflation, the selloffs in SSEC/Hang Seng/AUD/etc get even further exacerbated by the incremental loss of competitive export advantage with a suddenly declining JPY again, because Japan is a huge surplus/exporter nation as well. Putting it all together, this would mean that US stocks rally, USD rallies, and China/Hong Kong selloff. Not necessarily the only possible scenario in my opinion, but likely in the near term, and definitely conceivable as concurrent market themes, despite what a lot of people think about US stock/USD inverse correlations.
Wow. Very very interesting. Can't wait to see how this all plays out.  Thanks.
 
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