Well, one of my favorites, Bill Gross, is out there telling everyone to "be careful." Gross says that the economy could tank because of debt and taper, bringing stocks down with it and that's why he's buying bonds.
Gross has been as cold as ice as, well, forever. Or, at least since Paul McCulley (Pimco former chief economist) retired in 2010. McCulley was/is an MMT guy. How 'bout that?
Since McCulley left Gross has been selling bonds when he should have been buying them and buying bonds when he should have been selling them. Pimco has lost a ton of clients as this blog predicted way before it happened.
I can tell you this, one of the best techniques I learned during my days as a floor trader was to fade guys who were cold and they don't get any colder than Gross, so I'm planning on fading him.
Next there's Tom DeMark, some technical kook who bizarrely has this huge following (as I scratch my head) many of whom are big time hedge fund guys. Personally I find his analysis to be about as rational as the practice of voodoo.
DeMark was on CNBC (where else?) today where he says that there may be a 40% stock market crash in the next three days. He goes into some crazy explanation that talks about 1929 and the number of days leading up to that crash and then tries to use that as a basis for his call now. All crazy talk. You can see why, if you know what you are doing, you can really make money as a trader because there are just a bunch of crazies out there making calls on the market that have absolutely no clue as to what the hell they are talking about.
(Take my Forex course! You'll see how to make money!!)
Anyway suffice it to say I'm seeing a lot of hysteria from people who are either colder than the polar vortex that is currently invading half the United States or just plain crazy. That's why I'm buying stocks down here and although I wasn't planning on selling bonds, since Gross is saying he wants to be a buyer then, ahhh, what the heck, I'll sell the damn bonds, too!
Are the MMTers becoming bullish?
ReplyDeleteI'm fading a strengthening dollar/yen cross (S&P almost following tick for tick), and will start getting bullish again once it reverses and starts weakening. Maybe Abe will oblige me :)
ReplyDeleteHow does trading forex benefit society?
ReplyDeleteHow is it productive?
Malmo:
ReplyDeleteUSD/JPY is falling. Do you mean you are buying this? Or do you mean you are looking for lower USD/JPY? 100? 95?
In a capitalist system, markets are basic. They are probably basic in most other system as well at least until artificial intelligence is capable of taking over production and distribution. We aren't there yet.
ReplyDeleteTraders are required to give markets liquidity and arbitrage prices for market efficiency.
The point is not to bet rid of either markets or trade ring, which plays a vital role in market efficiency. The point is to tax gains appropriately rather than giving financial rent a tax privilege.
I don't see properly structured trading to be a problem but rather a market necessity.
Mike ,
ReplyDeleteIf/when JPY resumes weakening (say solidly above 102) I'll be aggressively bullish. I'll cover all shorts. Actually already have and am sitting on my hands now waiting for more definitive direction on yen strength/weakness.