Buzz Bits: A Slow Finish
Some Buzz niblets for this short trading day.
Mini-Minyan Mailbag - John Succo - 12:31 PM
If the fed is buying long bonds, doesn't this also mean that they are trying (or inadvertently) to lower long yields, and thus helping to invert the yield curve as they raise short rates?
That is the result, a result of being inbetween a rock and a hard place.
Unlike almost everyone else, I do not believe the Fed is in control of short term interest rates. They have given up their leverage to our foreign lenders: if Asia demands higher compensation for lending us money we either oblige them or watch the dollar collapse. So short term rates like the 2 year and even the 5 year, which is where our foreign lenders buy, is controlled by them not us.
But the Fed knows that housing and stock speculation are sensitive to long rates, not really short rates. This gives them latitude to play its games. It controls long term rates more than it controls short-term ones because debt we owe to foreigners are not long term in nature.
Flashback - Bill Meehan - 12:27 PM
- DJIA: 1,212.35
- S&P 500: 164.10
- Naz: 244.90
- Gold: $336.90
- GM: $77.25 ($11.87 adjusted for splits & dividends)
Thanksgiving in Minyanville...
- 1835, Andrew Carnegie
- Nov 25 is a big day for NY Yankee birthdays. In 1914, The Yankee Clipper, Joe DiMaggio was born. In 1951, Bucky "Bleeping" Dent was born
Was that the "permanent plateau of prosperity" or "permanent plate of turkey"? - Fil Zucchi 11:54 AM
Bloomberg reports that the housing boom is over. Who would have thunk it?
Since Toll Bros. (TOL) previewed that its performance would leave something to be desired, weak sibling Beazer Homes (BZH) has ramped almost $20 as the company focuses on shareholder's value instead of building homes.
TOL will reveal the whole story on December 8, and semi trailers of lipstick have been spotted heading for Horsham, PA for this pig fest.
(Positions in TOL, BZH)
The perfect gift... - Adam Warner - 10:42 AM
Instead of getting a Gift Card, how about buying some options to stuff those stockings? Volatility at/near 12 year lows in both the Headline measures like the VIX, and a good percentage of individual stocks as well. And you don't have to get to the Mall by 5 AM and trample others to do it.
Personally, I do not love bottom fishing in volatility. Not because of any particular opinion of where the VIX is going from here, but rather the fact that there's a timing factor involved if you try bottom fishing in options. The VIX very well may not decline further, but daily decay will add up if stocks remain non-volatile. So as such, I am using spreads and trading in a relatively non aggressive manner until I see reason to change course.
Draw up some plays, coach... - 10:28 AM
Do you have any questions on the X's and O's of Point & Figure charting? Be sure to read Prof. Depew's four part tutorial to get you started.
* Part I
* Part II
* Part III
* Part IV
Qualcomm about to hit a rough patch? Further thoughts on Greg's comments. - Phil Erlanger - 9:52 AM
Historically, Qualcomm (QCOM) runs into a brick wall from a seasonal standpoint from right now through late December. The stock has a high seasonal confidence factor, Cycler =.79 and 1.00 would be a perfect correlation, with this 2005r =.69. The stock has high short interest BUT a drop in short selling could help the seasonal pattern. New Nasdaq short interest is due after the close.
Fed Funds Futures...now say that three times fast - Bennet Sedacca - 8:58 AM
With Fed Funds futures trading clearly above both 2 year AND 10 year Treasury, is this again telling us that inversion is all but a given? Something has to give.
Either the futures traders in Fed Funds are wrong or the cash markets are wrong based upon their reaction to FOMC minutes.
There was also some comment out of Japan last night that deflation there is not quite dead. Just more food for thought after a yummy Thanksgiving.
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