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assetpricing

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  1. April consumer credit data slow down, difficult to pass the material cost inflation to consumers.
  2. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- i think it is the window time to add more position on TLT or IBTL now. But as DB pointed out that it is only hold for short time. It is based on the judgement that before entering the next reflation cycle, there is a mass destruction and US T bill is the most safe asset.
  3. Hi Durhamborn, have you received a similar message from HL as below. New regulation being introduced on 1 January 2018 will affect dealing in some of your holdings. --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- The new regulation requires that issuers of certain types of investments (known as ‘Packaged Retail Investment and Insurance Products’ or ‘PRIIPs’) must publish a Key Information Document (or KID) if they are available to private investors.
  4. Thursday's Federal Reserve report on its portfolio holdings shows a near $6 billion decline in its holdings of Treasury securities. https://www.cnbc.com/2017/11/03/its-begun-feds-unwinding-of-its-epic-balance-sheet-officially-showing-up-in-the-data.html Interest rising + balance shrink in the US. A lots of pressure on Mr Carney now.
  5. that only happens after the world currency position of the US dollar is abandoned. I guess it won't happen in the next cycle. The US Fed is raising the IR to save the US dollar now.. it is the biggest possibility to kick off massive debt default
  6. Yellen says Fed might turn to QE in another downturn https://www.ft.com/content/b2aefdd4-b5f0-11e7-a398-73d59db9e399?mhq5j=e6 so she knows there is another crisis on the way.
  7. we are in an era of companies/individuals rich on assets, but poor on cash flow.
  8. the key thing to trigger the next inflation process is the money by the next massive print going to the industries and workers rather than the banking system.
  9. she will raise rates to save the US Dollar, but higher rates will drag the US economy into severe correction. The US economy may survive by another QE, which will cost the world reserve currency position of the Dollar.
  10. Both the UK current account deficit and net capital inflow deteriorate in recent months, with the extremely high household debt, Carney is facing a dilemma. No matter what he chooses, the result won't be good. There is not enough time for him to prepare his ammunition. Maybe Bank of England will ban cash to deal with the next recession. If we see a rate rising in November, how the UK 7 trillion £ house market will react? This time the extended Help to Buy schemes won't help much ...Maybe the auto loan will go burst first this time.
  11. My thoughts: if the US economy doing bad while other economies like Euro, Japan etc grow strong, I would expect dollar keep going down. If the other economies also doing bad, I would expect the dollar going up, as we are entering a world-wide recession, the US treasuries are the safety asset which have to be purchased by the dollar. in the first scenario, the US will rely on fiscal stimulation while rising interest rate slowly. in the second scenario, the US will quickly starting the printing machine to an unprecedented QE.
  12. Agree! it is not easy to enter a easy reflation. The excess capacity from last cycle are still existing there. Real incomes are stagnant. Demand are only maintain by easy credits. The whole system looks very fragile though the economic size appears huge. The GDP number doesn't mean much, just a number to manipulate market expectation. The UK looks even worse than the US. Just look at the recent crime rate across the country, quite worrisome.
  13. Hi Durhamborn, thanks for sharing your ideas. As you mentioned, a severe deflation looks inevitable, which will help to rebalance the market. But I am also thinking how bad the US market will be hit this time, and the timing of the correction. When the Federal started to increase base rate, I thought the US might have a chance to escape the damage even they missed a tightening chance in the last cycle. I guess the Federal know the risk of tightening into a recession since the beginning of monetary base shrink. But they believe tightening can also solve problem, even tightening into booming. Th
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