Saturday, August 28, 2010
Thursday, August 26, 2010
Wednesday, August 25, 2010
I jumped over to the PIMCO to see if investment guru Bill Gross had a comment on the continued houseing crisis, and YUP, he did. Better yet he recently presented to Treasury a solution to the Fannie Mae/ Freddie Mac disaster. GO BILL! I like his plan, and if anyone knows alot about the mortgage market, it is Bill. I met Bill a very long time ago when I ran the mortage pass-through desk at Goldman, and he truly is one smart, and uber intense, cookie. ( can a cookie be intense?) I too recently went to Washington and had a meeting at Treasury and it is an incredible experience to walk in to that building to share ideas. It is awesome that Treasury is inviting the likes of Bill Gross to take part in solution building. Now will they listen? I hope so....
Tomorrow is a big day. Well yes, it is the first day of school in our new town for my children, but that is not what I meant. It is Women's Equality Day!!! I have co-written an OPED with the amazing Linda Tarr-Whelan, author of "Women Lead the Way" and former Ambassador to the UN Commission on the Status of Women. A MAJOR news source is publishing it!!!!! Go team. I will post it first thing. Please put on your girl power, Wonder Woman, or Rosie Riveter T-shirts and say, GENDER EQUALITY MATTERs and a more balanced world, means a better world for ALL !!!
Friday, August 20, 2010
"Suppose the Congress controlled the production of all the lemons in US. Then assume the Federal Reserve decided that it was going to use its balance sheet to buy lemons as a means of adding liquidity into the market when times were tough. While the government ramped up lemon production during tough times, the Fed not only bought most of those lemons, but sent out a clear message that it stands ready to buy a whole bunch more lemons if the economy falters. Finally, suppose that the government started changing the rules and regulations forcing financial institutions to hold more lemons rather than limes - as lemons were deemed the only safe fruit. What happens to the price of lemons? The answer is a 2.50% 10 year note!
These are not “market prices”. The Congress, Fed and Treasury are controlling the supply, demand and the rules of the game in the US government bond market. And make no mistake – lemon production is ripping higher. Eventually people will realize there are not enough Corona bottles to stuff those lemons into and there will be lemonade all over the streets. Until then, please remember that this will go down as one of the greatest examples government price control and manipulation in history. Maybe soon we will be lining up at 15th and Constitution in DC - at the doors of the Treasury on odd and even days depending on our birthdays - in order to buy limited supplies of those precious lemons!! There is a great book by two gentlemen from the Hoover institution -http://www.amazon.com/Doomsday-Myth-Years-Economic-Crises/dp/081797962X. The stories span 10,000 years but they all have one thing in common – when governments distort asset prices, bad things happen. It is an easy and fun read. I encourage you to grab a copy.
Finally, it has been a humbling summer watching 10 year rates move to these levels. I remain steadfast in the view that we are at least 75 to 100bps expensive in long term rates. But with the supply, demand and rules fixed by the Fed/Treasury/Congress Troika, I probably should have been more prepared for this – mea culpa. In any case, I’ll fall back on one of the better calls we have had and that is in MBS space where price manipulation is just as rampant. In fact, we can see that as the Fed has decided not to treat MBS like lemons anymore, they were quickly turned to lemonade. Once again my market screens are all red in MBS – days with 5yr futures down 5 tics and FBCL6.5s down 11 tics are amazing to watch. The 5.5/4.5 swap which peaked at 5-15 has fallen to 2 points since April. There is a lot of pain in the MBS world and it may be a good preview to what happens when government price manipulation schemes unravel. Good luck trading!"
Global Fixed Income Strategy
Jefferies & Co
As an add. US Treasury notes are a benchmark for all spread products. It you agree that these rates are low because of manipulation, then what is the right "spread" for anything? I argue that investors should be looking at absolute yield levels versus the risk of the bond and asking themselves, does this make sense? I don't follow debt spreads too closely anymore, but if I were an investor I would be careful. If treasury rates break down, so will spread product... bigtime.
Sunday, August 15, 2010
I woke this beautiful Sunday morning to find this essay in my in box, sent to me by one of my best friends. This is yet another example, to me, of how I know God is real. Two days ago during our 17 hour car ride home, my husband and I talked about the following:
Thursday, August 12, 2010
- New foreclosure relief programs to help troubled homeowners announced – a few billion. ( $3 ?)
- Cash strapped states to get billions of federal funding.( $26 ?)
- Employment numbers not good.
- HUGE negative trade balance numbers.
Quote from David Rosenburg to finish up....
"The best way to describe the financial backdrop is that it is truly a meat-grinder market. The S&P 500 was at 1,090 back on October 14, 2009. It’s at 1,090 today. That means 208 trading days of doing nothing. Nada. While I am sure there were gems beneath the surface, we are talking about an entire asset class here — you were better off clipping coupons for the past nine months."
Sorry, not very perky. On a brighter note our peach crop is looking mighty nice so I thought I would include a photo from our orchard. (ABOVE) We are leaving BC and our beautiful orchard tomorrow to head back to the states to get geared up for school. Summer has gone by way to fast. Best wishes to all...
Monday, August 9, 2010
This is a great article about women and social media from the blog ComSCORE. Thanks to Linda Ambraham for the post.
"Now maybe this gender disparity is not particularly noteworthy or an issue even worthy of consideration. After all, technology has often been the purview of men, so doesn’t the composition of the start-up community merely reflect that fact? That may be the case. But it is only when you understand just how important women are to the fabric of the digital media landscape that you begin to see the opportunity for women in our industry – and why the time is now for women to stand up and start up."
Wednesday, August 4, 2010
"Hold my hand, and walk joyously with Me throughout this day. Together we will savor the pleasures and endure the difficulties it brings. Be on the lookout for everything I have prepared for you: stunning scenery, bracing winds of adventure, cozy nooks for resting when you are weary, and much more. I am your Guide, as well as your constant Companion. I know every step of the journey ahead of you, all the way to heaven.
You don't have to choose between staying close to Me and staying on course. Since I am the Way, staying close to Me is staying on course. As you focus your thoughts on Me, I will guide you carefully along today's journey. Don't worry about what is around the next bend. Just concentrate on enjoying My presence and staying in step with Me."
And I begin to shake
I stop a sec and look around
Am I dreaming or awake?
The air it seems way too cool
For this time of year
I begin to get a sense
That the cool is my own fear
I keep walking straight ahead
Knowing not which was too turn
Thinking of all I have left behind
And all that I have learned.
A bench is on the road
As if put there just for me
To help relieve my load.
I sit down to rest and think
As I can no longer stand
Suddenly I’m scared and turn
For there is someone holding my hand.
I’m here to show you the way
I wake up, get out of bed
And get down on my knees to pray. (J Zehner 2002)
This term was mentioned by another author, this time from one of the most well known economists, Nouriel Roubini, in his recent comments. I have met Nouriel and other members of his team many times and find them both thorough and thoughtful. Nouriel's website Roubini.com.