作为熊熊，有种要遭遇灭顶之灾的不祥预感# Stock
c*r
1 楼
这几天，右眼跳得厉害。。。
看了 David Rosenberg 的解说，豁然醒悟了。Live or Die, 9/22 (FOMC会后一天）是
关键。祈祷！
The consensus view that the Fed is going to stop at 'Operation Twist' may be
in for a surprise. It may end up doing much, much more. And this may be one
of the reasons why the stock market is starting to rally (a classic 50%+
retracement, which always occur after the first 20% down-leg in a cyclical
bear market would imply a test of 1,250 on the S&P 500 at the very least).
Hedge funds do not want to be short ahead of next week's FOMC meeting, and
who can blame them?
Here are 10 reasons why:
1. Just go back to August 9th. The Fed was supposed to make a more
emphatic comment in the press statement about "extended period" as it
pertained to the length of time the Fed would stay ultra-accommodative on
the rates front. Bernanke went much further than anyone thought with his
pledge to keep the funds rate at the floor at least to mid-2013.
2. Ben Bernanke has shown repeatedly that he is willing to take risks
and be very aggressive.
3. Everyone knows that the Dow finished the August 9th session with a
huge 430 point gain after the FOMC press statement was fully digested. Not
only that, but when Bernanke held his two-day meeting in mid-December of
2008 and unveiled QE1, the Dow soared 360 points. And last November, the day
after that two-day meeting when Bernanke made it clear in his Washington
Post op-ed article how key it was to ignite the stock market, the Dow jumped
220 points. It may all be just for a near-term trade, but in an industry
where every basis point counts, who wants to be short knowing all that?
4. At that August meeting, we know both from the statement and minutes
that additional rounds of unconventional easing were discussed. And Mr.
Bernanke made it very clear at Jackson Hole that they would be on the table
again at the coming meeting
5. The Fed would like to be out of the picture during the election
campaign (especially if Richard Perry ends up winning the GOP nomination).
6. The Fed has cut its GDP forecasts at each of the past three meetings.
7. The stock market is actually little changed from where it was at the
last meeting and we know based on that Washington Post op-ed, that it is
equity valuation (specifically the Russell 2000) that Ben wants to see rally
. Sanctioning lower bond yields is just a means to that end.
8. There is no fiscal stimulus to bolster the economy, with the odds
very high that the Obama jobs plan — some in his own party object to the
package as per yesterday's New York Times — will be dead-on-arrival on the
House floor. The Fed is the only game in town.
9. Financial conditions have tightened nearly 100 basis points since the
spring and deserve a policy response.
10. Bernanke announced at Jackson Hole that this coming meeting was
going to be a two-day affair, not one day. The last time he did this was
back in December 2008 and that was when he invoked QE1. There has to be a
reason why it is two days, and it must be because he wants to build the case
for three dissenters. The Board is being sequestered for a reason!
Look, we are talking about the same man who, on October 2, 2003, delivered a
speech titled Monetary Policy and the Stock Market: Some Empirical Results.
I kid you not. This is someone who clearly sees the stock market as a
transmission mechanism from Fed policy to the rest of the economy. Here is a
key excerpt from that sermon:
Normally, the FOMC, the monetary policymaking arm of the Federal Reserve
, announces its interest rate decisions at around 2:15 p.m. following each
of its eight regularly scheduled meetings each year. An air of expectation
reigns in financial markets in the few minutes before to the announcement.
If you happen to have access to a monitor that tracks key market indexes, at
2:15 p.m. on an announcement day you can watch those indexes quiver as if
trying to digest the information in the rate decision and the FOMC's
accompanying statement of explanation. Then the black line representing each
market index moves quickly up or down, and the markets have priced the FOMC
action into the aggregate values of U.S. equities, bonds, and other assets.
Even the casual observer can have no doubt, then, that FOMC decisions
move asset prices, including equity prices. Estimating the size and duration
of these effects, however, is not so straightforward. Because traders in
equity markets, as in most other financial markets, are generally highly
informed and sophisticated. any policy decision that is largely anticipated
will already be factored into stock prices and will elicit little reaction
when announced. To measure the effects of monetary policy changes on the
stock market, then, we need to have a measure of the portion of a given
change in monetary policy that the market had not already anticipated before
the FOMC's formal announcement.
In other words, if Bernanke wants to juice the stock market, then he must do
something to surprise the market. 'Operation Twist' is already baked in,
which means he has to do that and a lot more to generate the positive
surprise he clearly desires (this is exactly what he did on August 9th with
the mid-2013 on- hold commitment). It seems that Bernanke, if he wants the
market to rally, is going to have to come out with a surprise next Wednesday
. If he doesn't, then expect a big selloff.
What he is likely to do is another story, but here are some options:
1. Expand the balance sheet further and simply buy more bonds (at the
longer end of the curve).
2. Eliminate the interest paid to commercial banks on excess reserves (
to try to spur lending).
3. Announce an explicit ceiling on the 10-year note yield (say 1.5%),
which the Fed has done in the distant past. Based on Bernanke's prior
rhetoric, this would seem to be a preferred strategy (though the Fed
relinquishes control of the balance sheet).
4. Buy foreign securities (bail out Europe and weaken the U.S. dollar —
talk about killing two birds with one policy stone).
5. Announce an explicit higher inflation target or perhaps a lower
unemployment rate target (i.e. reinforce the DUAL mandate).
6. As Mr. Bernanke stated for the record in November 2002, the Fed does
have broad powers to lend to the private sector indirectly via banks,
through the discount window. It could offer fixed-term loans to banks at low
or zero interest, with a wide range of private assets (including, among
others, corporate bonds, commercial paper, bank loans, and mortgages) deemed
eligible as collateral. For example, the Fed might make 90-day or 180-day
zero-interest loans to banks, taking corporate commercial paper of the same
maturity as collateral. Such a program could significantly reduce liquidity
and term premiums on the assets used as collateral. Reductions in these
premiums would lower the cost of capital both to banks and the non-bank
private sector.
Note that this is all for a trade. As we saw back on August 9th, we had a
huge rally but the market is no higher today than it was then. All we have
seen since is a huge amount of volatility.
看了 David Rosenberg 的解说，豁然醒悟了。Live or Die, 9/22 (FOMC会后一天）是
关键。祈祷！
The consensus view that the Fed is going to stop at 'Operation Twist' may be
in for a surprise. It may end up doing much, much more. And this may be one
of the reasons why the stock market is starting to rally (a classic 50%+
retracement, which always occur after the first 20% down-leg in a cyclical
bear market would imply a test of 1,250 on the S&P 500 at the very least).
Hedge funds do not want to be short ahead of next week's FOMC meeting, and
who can blame them?
Here are 10 reasons why:
1. Just go back to August 9th. The Fed was supposed to make a more
emphatic comment in the press statement about "extended period" as it
pertained to the length of time the Fed would stay ultra-accommodative on
the rates front. Bernanke went much further than anyone thought with his
pledge to keep the funds rate at the floor at least to mid-2013.
2. Ben Bernanke has shown repeatedly that he is willing to take risks
and be very aggressive.
3. Everyone knows that the Dow finished the August 9th session with a
huge 430 point gain after the FOMC press statement was fully digested. Not
only that, but when Bernanke held his two-day meeting in mid-December of
2008 and unveiled QE1, the Dow soared 360 points. And last November, the day
after that two-day meeting when Bernanke made it clear in his Washington
Post op-ed article how key it was to ignite the stock market, the Dow jumped
220 points. It may all be just for a near-term trade, but in an industry
where every basis point counts, who wants to be short knowing all that?
4. At that August meeting, we know both from the statement and minutes
that additional rounds of unconventional easing were discussed. And Mr.
Bernanke made it very clear at Jackson Hole that they would be on the table
again at the coming meeting
5. The Fed would like to be out of the picture during the election
campaign (especially if Richard Perry ends up winning the GOP nomination).
6. The Fed has cut its GDP forecasts at each of the past three meetings.
7. The stock market is actually little changed from where it was at the
last meeting and we know based on that Washington Post op-ed, that it is
equity valuation (specifically the Russell 2000) that Ben wants to see rally
. Sanctioning lower bond yields is just a means to that end.
8. There is no fiscal stimulus to bolster the economy, with the odds
very high that the Obama jobs plan — some in his own party object to the
package as per yesterday's New York Times — will be dead-on-arrival on the
House floor. The Fed is the only game in town.
9. Financial conditions have tightened nearly 100 basis points since the
spring and deserve a policy response.
10. Bernanke announced at Jackson Hole that this coming meeting was
going to be a two-day affair, not one day. The last time he did this was
back in December 2008 and that was when he invoked QE1. There has to be a
reason why it is two days, and it must be because he wants to build the case
for three dissenters. The Board is being sequestered for a reason!
Look, we are talking about the same man who, on October 2, 2003, delivered a
speech titled Monetary Policy and the Stock Market: Some Empirical Results.
I kid you not. This is someone who clearly sees the stock market as a
transmission mechanism from Fed policy to the rest of the economy. Here is a
key excerpt from that sermon:
Normally, the FOMC, the monetary policymaking arm of the Federal Reserve
, announces its interest rate decisions at around 2:15 p.m. following each
of its eight regularly scheduled meetings each year. An air of expectation
reigns in financial markets in the few minutes before to the announcement.
If you happen to have access to a monitor that tracks key market indexes, at
2:15 p.m. on an announcement day you can watch those indexes quiver as if
trying to digest the information in the rate decision and the FOMC's
accompanying statement of explanation. Then the black line representing each
market index moves quickly up or down, and the markets have priced the FOMC
action into the aggregate values of U.S. equities, bonds, and other assets.
Even the casual observer can have no doubt, then, that FOMC decisions
move asset prices, including equity prices. Estimating the size and duration
of these effects, however, is not so straightforward. Because traders in
equity markets, as in most other financial markets, are generally highly
informed and sophisticated. any policy decision that is largely anticipated
will already be factored into stock prices and will elicit little reaction
when announced. To measure the effects of monetary policy changes on the
stock market, then, we need to have a measure of the portion of a given
change in monetary policy that the market had not already anticipated before
the FOMC's formal announcement.
In other words, if Bernanke wants to juice the stock market, then he must do
something to surprise the market. 'Operation Twist' is already baked in,
which means he has to do that and a lot more to generate the positive
surprise he clearly desires (this is exactly what he did on August 9th with
the mid-2013 on- hold commitment). It seems that Bernanke, if he wants the
market to rally, is going to have to come out with a surprise next Wednesday
. If he doesn't, then expect a big selloff.
What he is likely to do is another story, but here are some options:
1. Expand the balance sheet further and simply buy more bonds (at the
longer end of the curve).
2. Eliminate the interest paid to commercial banks on excess reserves (
to try to spur lending).
3. Announce an explicit ceiling on the 10-year note yield (say 1.5%),
which the Fed has done in the distant past. Based on Bernanke's prior
rhetoric, this would seem to be a preferred strategy (though the Fed
relinquishes control of the balance sheet).
4. Buy foreign securities (bail out Europe and weaken the U.S. dollar —
talk about killing two birds with one policy stone).
5. Announce an explicit higher inflation target or perhaps a lower
unemployment rate target (i.e. reinforce the DUAL mandate).
6. As Mr. Bernanke stated for the record in November 2002, the Fed does
have broad powers to lend to the private sector indirectly via banks,
through the discount window. It could offer fixed-term loans to banks at low
or zero interest, with a wide range of private assets (including, among
others, corporate bonds, commercial paper, bank loans, and mortgages) deemed
eligible as collateral. For example, the Fed might make 90-day or 180-day
zero-interest loans to banks, taking corporate commercial paper of the same
maturity as collateral. Such a program could significantly reduce liquidity
and term premiums on the assets used as collateral. Reductions in these
premiums would lower the cost of capital both to banks and the non-bank
private sector.
Note that this is all for a trade. As we saw back on August 9th, we had a
huge rally but the market is no higher today than it was then. All we have
seen since is a huge amount of volatility.
