World economy talk

[uls]

Asia stocks muted as Fed meeting awaited | South China Morning Post

MANILA, Philippines (AP) — Asian stock markets were mostly lower Tuesday as investors waited for a U.S. Federal Reserve policy meeting this week for clues about when the central bank will begin reducing its monetary stimulus.

Gains in global stock markets have been underwritten for several years by the Fed's mammoth expansion of the U.S. money supply. But as the world's biggest economy slowly recovers from the 2009 recession, the Fed is expected to start scaling down its purchases of government bonds and mortgage securities that total $85 billion a month.

Markets had previously expected the withdrawal of stimulus to begin this year but expectations have shifted to next year as the pace of improvement in the U.S. economy waned. The wording of the Fed's statement this week will be scrutinized for any new indications about when that process will begin. Any hints of change could roil markets.

[uls]

fed statement tonight

everyone expects no taper

[uls]

what if the Fed surprises the market like it did last month

everyone was expecting them to begin tapering QE but they didint

they couldnt taper coz the 10 yr yield was at 3%

it's now below 2.5%



hey Fed, now is the chance

[uls]

no taper as everyone expected

but in the statement FRB: Press Release--Federal Reserve issues FOMC statement--October 30, 2013 tapering didnt sound so far away

the market has priced-in the beginning of tapering deep into 2014

but it sounded like it could begin as soon as December

market reaction:

dollar index


dec 10 yr note

[kapitan88]

Uls,with all the graphs that your sharing, when it goes up, it means good,right? Or not necesarily for us?

[uls]

when the US 10 yr yield rises it makes other dollar denominated bond yields rise and prices fall (yield and price moves in opposite direction)

so how does it affect us? rising US 10 yr yield drives up emerging market bond yields (like Phil. govt $ bonds, corporate $ bonds)

-----

US 10 yr yield minus US inflation rate = real rate

when the real rate is positive it makes holding dollars more attractive

so funds that left the US to seek higher yield in emerging markets will return to the US

EM currencies will fall against the dollar

___

[uls]

looks like the market is positioning for an earlier-than-March 2014 taper

[uls]

NYSE


TWTR to begin trading tonight

[uls]

ECB rate decision later

a rate cut is needed coz inflation is falling in the eurozone

the main refi rate is already at 0.50% so they only have 2 bullets left (they cut by 0.25% each time)

they may want to conserve bullets

or not

[uls]

as i said

when the US 10 yr yield rises it makes other dollar denominated bond yields rise and prices fall (yield and price moves in opposite direction)

so how does it affect us? rising US 10 yr yield drives up emerging market bond yields (like Phil. govt $ bonds, corporate $ bonds)

-----

US 10 yr yield minus US inflation rate = real rate

when the real rate is positive it makes holding dollars more attractive

so funds that left the US to seek higher yield in emerging markets will return to the US

EM currencies will fall against the dollar

USD to PHP Exchange Rate - Bloomberg

As of 22:10:32 ET on 11/11/2013.
USD-PHP 43.3950 Price of 1 USD in PHP 0.2020 0.47%

[uls]

dollar strength is driving money out of emerging markets

so where does the money go?

answer this question --- who gains from a stronger dollar?

first that comes to mind is Japan

a weaker yen is good for Japan





i think the market is still underweight Japan equities and overweight EM stocks

that should be changing by now

we should see outflows from EM and inflows into Japan

[uls]

Yellen Says Economy Performing ?Far Short? of Potential - Bloomberg

Janet Yellen, nominated to be the next chairman of the Federal Reserve, said the economy and labor market are performing “far short of their potential” and must improve before the Fed can begin reducing monetary stimulus.

dollar falls


gold rises

[uls]

hehe

short yen long nikkei

[jut703]

OT: How did Uls get banned?


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[chua_riwap]

OT: How did Uls get banned?


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due to some depressed misunderstandings, that went into cosmic proportions.

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[brainmafia_310]

Is it true that the brics is cutting their reliance to dollar and of their dollar reserve? Let us see how the brics particularly china will dispose their dollar reserved to earn bigtime with their reserves.

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[brainmafia_310]

^^^thanks.

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[Monseratto]

Dow fell 266 points last night.

2014 crash will be worse than 1987's: Marc Faber

2014 crash will be worse than 1987's: Marc Faber
Alex Rosenberg | *CNBCAlex
5 Hours Ago

Marc Faber says the stock market is setting up for a decline more painful than the sudden crash of 1987.

"I think it's very likely that we're seeing, in the next 12 months, an '87-type of crash," Faber said with a devious chuckle on Thursday's episode of "Futures Now." "And I suspect it will be even worse."

Faber, the editor and publisher of the Gloom, Boom & Doom Report, has recently called for growth stocks to decline. And he says the pain in the Internet and biotech sectors is just getting started.

"I think there are some groups of stocks that are highly vulnerable because they're in cuckoo land in terms of valuations," Faber said. "They have no earnings. They're valued at price-to-sales. And this is not a good metric in the long run."

To be sure, there are prominent investors that disagree with Faber, among them legendary stockpicker Bill Miller, who said this week that conditions for a bad market simply don't exist.

But it's not just momentum stocks that Faber is wary of. He says that investors are coming to a stark realization.

"I believe that the market is slowly waking up to the fact that the Federal Reserve is a clueless organization," Faber said. "They have no idea what they're doing. And so the confidence level of investors is diminishing, in my view."

As investors adjust to this fact, and valuations shrink, he predicts a massive decline in the market.

"This year, for sure—maybe from a higher diving board—the S&P will drop 20 percent," Faber said, adding: "I think, rather, 30 percent. Who knows. But all I'm saying is that it's not a very good time, right now, to buy stocks."

Previously, in August 2013, Faber predicted that a 1987-style crash was coming. The S&P 500 is about 9 percent higher since he made that call.

—By CNBC's Alex Rosenberg

[chua_riwap]

welcome back uls.....

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[brainmafia_310]

WB sir ULS!!! Eto na maganda dalawa na ang analyst dito.

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