TBOND-BUND-EUROSTOX-FIBMERD fine del capitalismo(V.M.98anni)
- Creatore Discussione dan24
- Data di Inizio
f4f
翠鸟科
Fleursdumal ha scritto:
stì quazzi
cmq tendo a credere che certi articoli siano per un pubblico ' di niichia' di catastrofisti
la realtà può essere anche peggiore ma non credo alle longa manus di masso'sion'pi2isti
e poi siamo in un mondo diverso, che con internet permette notevoli scambi di info e quindi di denuncia di certe cose assurde
spero
f4f
翠鸟科
dan24 ha scritto:buona serata a todos..mantengo -1, 4086...oggi nun me vogliono dare soddisfazioni...ma doMANIIII ripresa di volatilità da non escludere..se no vado di smediazzo fino alla FINE DEL CAPITALISMO
ciao bbandit
occhio però
il capitalismo può finire, e anche in fretta
il mercato, no
Fleursdumal
फूल की बुराई
Treasuries Rise After Rout; Traders Await Fed Meeting Tomorrow
By Elizabeth Stanton and Michael McDonald
Dec. 11 (Bloomberg) -- U.S. Treasuries rose after the biggest weekly drop since June as traders awaited tomorrow's Federal Reserve meeting and government reports on retail sales and inflation later this week.
With Fed policy makers expected to leave interest rates unchanged by all 97 economists polled by Bloomberg News, bond investors are focused on whether the statement announcing the decision will provide any support for bets that rate cuts are likely next year. Treasuries fell last week as stronger-than- expected employment and services growth challenged that view.
Even after the decline, ``there's an expectation that the Fed is a little more dovish about the outlook for economy, less concerned about inflation,'' said Ian Lyngen, an interest-rate strategist at RBS Greenwich Capital in Greenwich, Connecticut, one of the 22 primary U.S. government securities dealers that trade with the central bank.
The yield on the benchmark 10-year note declined about 3 basis points, or 0.03 percentage point, to 4.52 percent at 11:35 a.m. in New York, according to bond broker Cantor Fitzgerald LP.
The price of the 4 5/8 percent note due in November 2016 rose 6/32, or $1.88 per $1,000 face amount, to 100 27/32. Bond prices move inversely to yields.
Last week the 10-year yield surged 11 basis points, its biggest increase since the week ended June 16. It rose 6 basis points on Dec. 8 after the Labor Department said the economy created 132,000 jobs last month. The median forecast of economists surveyed by Bloomberg was for an increase of 100,000. October job creation was revised down to 79,000 from 92,000.
Interest-Rate Futures
The odds Fed policy makers will reduce their target for the overnight lending rate between banks a quarter-percentage point to 5 percent by the end of March fell to 28 percent from 48 percent on Dec. 7, interest-rate futures yields indicate. The April federal funds futures contract was unchanged today, yielding 5.18 percent.
``In the longer scheme of things the economy's weakening and liquidity is very high,'' said Mustafa Chowdhury, head of U.S. interest rates research at primary dealer Deutsche Bank AG in New York. ``The combination is very friendly to bonds.''
Last week's declines pushed the 10-year note's yield to a level likely to attract investors, Martin Mitchell, senior vice president in bond trading at Stifel Nicolaus & Co. in Baltimore, wrote in a report today.
The yield rose as high as 4.55 percent, 2 basis points lower than its 30-day moving average. The 10-year yield hasn't exceeded its average over the past 30 trading days since the first week of November.
`Trading-Range Mentality'
Investors ``have started to embrace a trading-range mentality,'' buying when yields reach the upper end of their recent range and selling when they approach the lower end, said Kevin Flynn, co-head of U.S. government bond trading at primary dealer Countrywide Securities Corp. in Calabasas, California.
Today's gains drove 10-year yields lower relative to two- year note yields, a sign investors are confident in the Fed's ability to keep inflation from accelerating. Ten-year yields, normally higher than two-year yields to compensate investors for the risk accelerating inflation will erode their returns, have been lower for most of this year.
The 10-year yield is lower than the two-year yield by almost 15 basis points, compared with less than 13 basis points on Dec. 8 and as few as 7 on Dec. 5.
`Hawkish Tone'
``The shape of the yield curve as much as anything tells you the market expects them to continue their general hawkish tone on inflation,'' Flynn said.
The Fed raised its target for the federal funds rate a quarter-percentage point at each of its 17 meetings from June 2004 to June 2006. It left the target unchanged at 5.25 percent at each of its three meetings since then, saying the rate increases were still working their way into the economy and might be sufficient to curb inflation.
The 10-year note's yield touched a 10-month low of 4.40 percent on Dec. 1 after an industry group said manufacturing contracted in November for the first time in three years.
Economists polled by Bloomberg News from Dec. 1 to Dec. 8 lowered their year-end and March 31 forecasts for the 10-year yield by 15 basis points from the previous survey. The median forecasts were 4.60 percent at year-end and 4.65 percent for March 31.
Government reports this week are expected to show consumer spending rebounded in November as job creation and rising incomes offset the slumps in housing and manufacturing.
Retail sales probably rose 0.2 percent, the first increase in four months, a Dec. 13 Commerce Department report is expected to show. Excluding sales at auto dealers purchases probably rose 0.3 percent, according to the median forecast.
Consumer prices probably rose for the first time in three months in November as fuel costs stabilized, a Dec. 15 Labor Department report is expected to show.
Americans probably paid 0.2 percent more for goods and services last month, after back-to-back declines of 0.5 percent. Core prices, which exclude food and energy, are also projected to rise 0.2 percent after a 0.1 percent gain.
By Elizabeth Stanton and Michael McDonald
Dec. 11 (Bloomberg) -- U.S. Treasuries rose after the biggest weekly drop since June as traders awaited tomorrow's Federal Reserve meeting and government reports on retail sales and inflation later this week.
With Fed policy makers expected to leave interest rates unchanged by all 97 economists polled by Bloomberg News, bond investors are focused on whether the statement announcing the decision will provide any support for bets that rate cuts are likely next year. Treasuries fell last week as stronger-than- expected employment and services growth challenged that view.
Even after the decline, ``there's an expectation that the Fed is a little more dovish about the outlook for economy, less concerned about inflation,'' said Ian Lyngen, an interest-rate strategist at RBS Greenwich Capital in Greenwich, Connecticut, one of the 22 primary U.S. government securities dealers that trade with the central bank.
The yield on the benchmark 10-year note declined about 3 basis points, or 0.03 percentage point, to 4.52 percent at 11:35 a.m. in New York, according to bond broker Cantor Fitzgerald LP.
The price of the 4 5/8 percent note due in November 2016 rose 6/32, or $1.88 per $1,000 face amount, to 100 27/32. Bond prices move inversely to yields.
Last week the 10-year yield surged 11 basis points, its biggest increase since the week ended June 16. It rose 6 basis points on Dec. 8 after the Labor Department said the economy created 132,000 jobs last month. The median forecast of economists surveyed by Bloomberg was for an increase of 100,000. October job creation was revised down to 79,000 from 92,000.
Interest-Rate Futures
The odds Fed policy makers will reduce their target for the overnight lending rate between banks a quarter-percentage point to 5 percent by the end of March fell to 28 percent from 48 percent on Dec. 7, interest-rate futures yields indicate. The April federal funds futures contract was unchanged today, yielding 5.18 percent.
``In the longer scheme of things the economy's weakening and liquidity is very high,'' said Mustafa Chowdhury, head of U.S. interest rates research at primary dealer Deutsche Bank AG in New York. ``The combination is very friendly to bonds.''
Last week's declines pushed the 10-year note's yield to a level likely to attract investors, Martin Mitchell, senior vice president in bond trading at Stifel Nicolaus & Co. in Baltimore, wrote in a report today.
The yield rose as high as 4.55 percent, 2 basis points lower than its 30-day moving average. The 10-year yield hasn't exceeded its average over the past 30 trading days since the first week of November.
`Trading-Range Mentality'
Investors ``have started to embrace a trading-range mentality,'' buying when yields reach the upper end of their recent range and selling when they approach the lower end, said Kevin Flynn, co-head of U.S. government bond trading at primary dealer Countrywide Securities Corp. in Calabasas, California.
Today's gains drove 10-year yields lower relative to two- year note yields, a sign investors are confident in the Fed's ability to keep inflation from accelerating. Ten-year yields, normally higher than two-year yields to compensate investors for the risk accelerating inflation will erode their returns, have been lower for most of this year.
The 10-year yield is lower than the two-year yield by almost 15 basis points, compared with less than 13 basis points on Dec. 8 and as few as 7 on Dec. 5.
`Hawkish Tone'
``The shape of the yield curve as much as anything tells you the market expects them to continue their general hawkish tone on inflation,'' Flynn said.
The Fed raised its target for the federal funds rate a quarter-percentage point at each of its 17 meetings from June 2004 to June 2006. It left the target unchanged at 5.25 percent at each of its three meetings since then, saying the rate increases were still working their way into the economy and might be sufficient to curb inflation.
The 10-year note's yield touched a 10-month low of 4.40 percent on Dec. 1 after an industry group said manufacturing contracted in November for the first time in three years.
Economists polled by Bloomberg News from Dec. 1 to Dec. 8 lowered their year-end and March 31 forecasts for the 10-year yield by 15 basis points from the previous survey. The median forecasts were 4.60 percent at year-end and 4.65 percent for March 31.
Government reports this week are expected to show consumer spending rebounded in November as job creation and rising incomes offset the slumps in housing and manufacturing.
Retail sales probably rose 0.2 percent, the first increase in four months, a Dec. 13 Commerce Department report is expected to show. Excluding sales at auto dealers purchases probably rose 0.3 percent, according to the median forecast.
Consumer prices probably rose for the first time in three months in November as fuel costs stabilized, a Dec. 15 Labor Department report is expected to show.
Americans probably paid 0.2 percent more for goods and services last month, after back-to-back declines of 0.5 percent. Core prices, which exclude food and energy, are also projected to rise 0.2 percent after a 0.1 percent gain.
gipa69
collegio dei patafisici
ditropan ha scritto:sera banda
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Ciao Ditro
gipa69
collegio dei patafisici
The Jungle: Subprime Credit Crunch, the Cult of Greed, and “Liquidity”
I have always felt that the subprime lending business model was based on a slash and burn predatory model. It was created to take advantage of the post 911, so called “pro-business”, regulatory lite, easy money environment. If Upton Sinclair were alive today, this would be the 2006 version of his 1906 book, “The Jungle”. The method of these toxic loan purveyors was to hide under the guise of “helping with the American get rich quick homeowner dream”, and to exploit these markets to the max, to the bitter end, and mostly for upfront fees, and then completely pull the plug. It is my strong sense that we have finally reached the plug pull stage, and that the bogus dream has become a cult of greed nightmare.
Incidentally, I DO NOT believe that this confined to just subprime, nor do I believe subprime is small potatoes. There were $350 billion subprime loans originated in 2003, $550B in 2004, $625B in 2005, and $437B through 3Q, 06. That’s $1.962 trillion, and it was used by many to buy or refinance housing at or near the peak in prices, and in Bubble regions where weakness is now the greatest. And this does not even include other nonconforming Alt A mortgages, made to so called higher credits for second homes and speculation. On this front, the interest only mortgage especially is a time bomb, because many (option ARMs or neg-ams) have regular amortization provisions. Particularly, read “triggers” in this explaination.
The subprime market is dominated by ten purveyors. In the 3Q, 2006, they originated 62.2% of all US subprime mortgages. Almost all the rest is handled by a second tier of 15 outfits. The top 25 originated 87.6% of all these loans in 3Q. Therefore, it is this group that should be watched like a hawk.
One of the claims of the apologists as to why these companies are now folding, centers around the notion of loan originations drying up. In actuality, only some of these outfits have backed away from the market as total 2Q to 3Q subprime originations only fell 1.7%. An incredible $175 billion in these cult of greed loans were still made in 3Q, directly in the face of sliding credit conditions, and the new nontraditional mortgages lending guidelines, put in place on Sept. 30, 2006. A glance at the exhibit above indicates only #1 Well Fargo, #3 HSBC (Household Finance), #9 Ameriquest, (was #4 in 2005), and #10 Option One, backed off the pace. Still, others (scroll to Fifth Third item) who hold MBS in their portfolios, are beginning to offload them.
But, #11 toxic purveyor Ownit, who closed shop this week, jumped into the fray, and ran their string out to the bitter end. They actually increased first half, 2006 output to $5.5 billion. That’s 30% annualized greater than in 2005! Get the picture? The reason Ownit is finished is because toxic loans are being returned for repurchase, they can’t cover them, and their Risklove backers have called it quits. That’s serious stuff to my way of thinking.
Which brings us to the whole cliched, overused “global liquidity” question. Barry Ritholtz posted an item, picking up on a Alan Abelson column on the matter. I agree with their premise, and also please note the charts. As I read different chat boards and blogs, I get the sense that observers are confused about what is driving this “liquidity”, or what it even is? The source of this confusion is that monetary authorities print the money, and that’s perceived as “the liquidity”. This is only half the truth. The Federal Reserve can purchase (monetize) securities through several mechanisms: open market permanent operations, temporary open market operations, securities loans, and increasingly in modern Bubble markets, with bluff and talk. Thus in normal markets, they can influence financial and credit conditions at the margin, and in Bubble markets that’s amplified.
The other source of monetary operations comes from foreign central banks, and I consider this a market distortion, as much as direct monetization. Market distortions such as large scale purchases of Freddie Mac agencies for only 25 basis points over Treasuries, sends false market signals all up and down the financial system, and encourages even more cult of greed behavior. That’s what’s happened in spades. The data for all this can be gleaned here.
However, it is also important to realize that in a late stage Bubble economy, “liquidity” might not be liquidity at all, especially if it’s being generated by private financial institutions, who are running into trouble using Ponzi finance. For example, pigman JP Morgan (JPM) has until this week been providing ample financing to the aforementioned Ownit. Pigmen until now have been fully enabled to create so called liquidity, literally out of thin air, via carry trades, deregulated market schemes, derivatives, etc. Correspondingly, Risklove Ownit until this week has been a full court press, just taking advantage of the cult of greed set up, and generating a raft of silly season loans. Inevitably, silly season loans sputter and fail, especially when new Ponzi finance is choked off, and when that happens liquidity suddenly evaporates. I think that’s what we are beginning to see. Of course, this may just be a hiccup, as next week another silly season $15 billion LBO may emerge on the scene. Still, going into year end the whole Ponzi scheme may be up in the air, and if not, really it’s just a matter of time.
The point I’m getting to with this is that this liquidity creation is a direct function of the animal spirits of Riskloves and Pig Men. Right now their primary motivation and incentive is greed and stealing (for quick fees that they can put into their rat-lines), not rational investment decisions. That’s why credit spreads until this month have been quiet and subdued. So what happens if more events are coming along the lines of the Sebring and Ownit subprime pull the plugs? Can the monetary authorities (Wizards) simply monetize it, and with impunity?
I think the answer to that is a little, but not a lot. If the plug pulling begins to really gather steam, you are talking about trillions of dollars of bloated, overpriced securities that will need to be supported. The US Federal Reserve on average has monetized $576 million a week via permanent adds or coupon passes. Overall Fed liquid assets growth has been a fairly inflationary 4-5% track of late, as you can see in Lee Adler’s chart available in his Wall Street Examiner Professional edition. Of course there is potential for the Wizards to pick up the monetizing pace, but to what, a billion a week? And what effect would an extra half billion a week have, if a trillion or two in asset backed securities are getting a severe haircut? Probably not much. Fed monetizing only works to grease the skids when the animal Risklove spirits are running hard, and will be a drop in the bucket if the cult of greed turns into the cult of fear.
« Throwing More Dysfunctional Fuel on the Forest Fire
The Jungle: Subprime Credit Crunch, the Cult of Greed, and “Liquidity”
I have always felt that the subprime lending business model was based on a slash and burn predatory model. It was created to take advantage of the post 911, so called “pro-business”, regulatory lite, easy money environment. If Upton Sinclair were alive today, this would be the 2006 version of his 1906 book, “The Jungle”. The method of these toxic loan purveyors was to hide under the guise of “helping with the American get rich quick homeowner dream”, and to exploit these markets to the max, to the bitter end, and mostly for upfront fees, and then completely pull the plug. It is my strong sense that we have finally reached the plug pull stage, and that the bogus dream has become a cult of greed nightmare.
Incidentally, I DO NOT believe that this confined to just subprime, nor do I believe subprime is small potatoes. There were $350 billion subprime loans originated in 2003, $550B in 2004, $625B in 2005, and $437B through 3Q, 06. That’s $1.962 trillion, and it was used by many to buy or refinance housing at or near the peak in prices, and in Bubble regions where weakness is now the greatest. And this does not even include other nonconforming Alt A mortgages, made to so called higher credits for second homes and speculation. On this front, the interest only mortgage especially is a time bomb, because many (option ARMs or neg-ams) have regular amortization provisions. Particularly, read “triggers” in this explaination.
The subprime market is dominated by ten purveyors. In the 3Q, 2006, they originated 62.2% of all US subprime mortgages. Almost all the rest is handled by a second tier of 15 outfits. The top 25 originated 87.6% of all these loans in 3Q. Therefore, it is this group that should be watched like a hawk.
One of the claims of the apologists as to why these companies are now folding, centers around the notion of loan originations drying up. In actuality, only some of these outfits have backed away from the market as total 2Q to 3Q subprime originations only fell 1.7%. An incredible $175 billion in these cult of greed loans were still made in 3Q, directly in the face of sliding credit conditions, and the new nontraditional mortgages lending guidelines, put in place on Sept. 30, 2006. A glance at the exhibit above indicates only #1 Well Fargo, #3 HSBC (Household Finance), #9 Ameriquest, (was #4 in 2005), and #10 Option One, backed off the pace. Still, others (scroll to Fifth Third item) who hold MBS in their portfolios, are beginning to offload them.
But, #11 toxic purveyor Ownit, who closed shop this week, jumped into the fray, and ran their string out to the bitter end. They actually increased first half, 2006 output to $5.5 billion. That’s 30% annualized greater than in 2005! Get the picture? The reason Ownit is finished is because toxic loans are being returned for repurchase, they can’t cover them, and their Risklove backers have called it quits. That’s serious stuff to my way of thinking.
Which brings us to the whole cliched, overused “global liquidity” question. Barry Ritholtz posted an item, picking up on a Alan Abelson column on the matter. I agree with their premise, and also please note the charts. As I read different chat boards and blogs, I get the sense that observers are confused about what is driving this “liquidity”, or what it even is? The source of this confusion is that monetary authorities print the money, and that’s perceived as “the liquidity”. This is only half the truth. The Federal Reserve can purchase (monetize) securities through several mechanisms: open market permanent operations, temporary open market operations, securities loans, and increasingly in modern Bubble markets, with bluff and talk. Thus in normal markets, they can influence financial and credit conditions at the margin, and in Bubble markets that’s amplified.
The other source of monetary operations comes from foreign central banks, and I consider this a market distortion, as much as direct monetization. Market distortions such as large scale purchases of Freddie Mac agencies for only 25 basis points over Treasuries, sends false market signals all up and down the financial system, and encourages even more cult of greed behavior. That’s what’s happened in spades. The data for all this can be gleaned here.
However, it is also important to realize that in a late stage Bubble economy, “liquidity” might not be liquidity at all, especially if it’s being generated by private financial institutions, who are running into trouble using Ponzi finance. For example, pigman JP Morgan (JPM) has until this week been providing ample financing to the aforementioned Ownit. Pigmen until now have been fully enabled to create so called liquidity, literally out of thin air, via carry trades, deregulated market schemes, derivatives, etc. Correspondingly, Risklove Ownit until this week has been a full court press, just taking advantage of the cult of greed set up, and generating a raft of silly season loans. Inevitably, silly season loans sputter and fail, especially when new Ponzi finance is choked off, and when that happens liquidity suddenly evaporates. I think that’s what we are beginning to see. Of course, this may just be a hiccup, as next week another silly season $15 billion LBO may emerge on the scene. Still, going into year end the whole Ponzi scheme may be up in the air, and if not, really it’s just a matter of time.
The point I’m getting to with this is that this liquidity creation is a direct function of the animal spirits of Riskloves and Pig Men. Right now their primary motivation and incentive is greed and stealing (for quick fees that they can put into their rat-lines), not rational investment decisions. That’s why credit spreads until this month have been quiet and subdued. So what happens if more events are coming along the lines of the Sebring and Ownit subprime pull the plugs? Can the monetary authorities (Wizards) simply monetize it, and with impunity?
I think the answer to that is a little, but not a lot. If the plug pulling begins to really gather steam, you are talking about trillions of dollars of bloated, overpriced securities that will need to be supported. The US Federal Reserve on average has monetized $576 million a week via permanent adds or coupon passes. Overall Fed liquid assets growth has been a fairly inflationary 4-5% track of late, as you can see in Lee Adler’s chart available in his Wall Street Examiner Professional edition. Of course there is potential for the Wizards to pick up the monetizing pace, but to what, a billion a week? And what effect would an extra half billion a week have, if a trillion or two in asset backed securities are getting a severe haircut? Probably not much. Fed monetizing only works to grease the skids when the animal Risklove spirits are running hard, and will be a drop in the bucket if the cult of greed turns into the cult of fear.
The other group to watch are the foreign central banks. They been running about $3.88 billion per week year to date in US Old Maid card additions to custodial holdings. Are they going to hang tough in a credit seizure situation? I don’t think so, primarily because it’s not a monolithic group. And in a non-monolithic daisy chain, some major player (or players) are sure to break off when they see the rats pulling the plug and jumping ship. In fact, on the monetizing front the trend is still towards tightening. which India tightened aggressively last night, sending the Bombay Stock Exchange bellwether Sensex down by 3% on selling on the Reserve Bank’s decision to hike Cash Reserve Ratio of banks by half a percentage point.
Net, net, if the end of the cult of greed is at hand, liquidity will be a coward. It’s human nature. A billion monetized here, and a billion there will have virtually no impact. And in such a climate, if they go for the quick ten billion injections, the markets could panic even more as it would be likely to flow into the wrong asset, such as energy.
I have always felt that the subprime lending business model was based on a slash and burn predatory model. It was created to take advantage of the post 911, so called “pro-business”, regulatory lite, easy money environment. If Upton Sinclair were alive today, this would be the 2006 version of his 1906 book, “The Jungle”. The method of these toxic loan purveyors was to hide under the guise of “helping with the American get rich quick homeowner dream”, and to exploit these markets to the max, to the bitter end, and mostly for upfront fees, and then completely pull the plug. It is my strong sense that we have finally reached the plug pull stage, and that the bogus dream has become a cult of greed nightmare.
Incidentally, I DO NOT believe that this confined to just subprime, nor do I believe subprime is small potatoes. There were $350 billion subprime loans originated in 2003, $550B in 2004, $625B in 2005, and $437B through 3Q, 06. That’s $1.962 trillion, and it was used by many to buy or refinance housing at or near the peak in prices, and in Bubble regions where weakness is now the greatest. And this does not even include other nonconforming Alt A mortgages, made to so called higher credits for second homes and speculation. On this front, the interest only mortgage especially is a time bomb, because many (option ARMs or neg-ams) have regular amortization provisions. Particularly, read “triggers” in this explaination.
The subprime market is dominated by ten purveyors. In the 3Q, 2006, they originated 62.2% of all US subprime mortgages. Almost all the rest is handled by a second tier of 15 outfits. The top 25 originated 87.6% of all these loans in 3Q. Therefore, it is this group that should be watched like a hawk.
One of the claims of the apologists as to why these companies are now folding, centers around the notion of loan originations drying up. In actuality, only some of these outfits have backed away from the market as total 2Q to 3Q subprime originations only fell 1.7%. An incredible $175 billion in these cult of greed loans were still made in 3Q, directly in the face of sliding credit conditions, and the new nontraditional mortgages lending guidelines, put in place on Sept. 30, 2006. A glance at the exhibit above indicates only #1 Well Fargo, #3 HSBC (Household Finance), #9 Ameriquest, (was #4 in 2005), and #10 Option One, backed off the pace. Still, others (scroll to Fifth Third item) who hold MBS in their portfolios, are beginning to offload them.
But, #11 toxic purveyor Ownit, who closed shop this week, jumped into the fray, and ran their string out to the bitter end. They actually increased first half, 2006 output to $5.5 billion. That’s 30% annualized greater than in 2005! Get the picture? The reason Ownit is finished is because toxic loans are being returned for repurchase, they can’t cover them, and their Risklove backers have called it quits. That’s serious stuff to my way of thinking.
Which brings us to the whole cliched, overused “global liquidity” question. Barry Ritholtz posted an item, picking up on a Alan Abelson column on the matter. I agree with their premise, and also please note the charts. As I read different chat boards and blogs, I get the sense that observers are confused about what is driving this “liquidity”, or what it even is? The source of this confusion is that monetary authorities print the money, and that’s perceived as “the liquidity”. This is only half the truth. The Federal Reserve can purchase (monetize) securities through several mechanisms: open market permanent operations, temporary open market operations, securities loans, and increasingly in modern Bubble markets, with bluff and talk. Thus in normal markets, they can influence financial and credit conditions at the margin, and in Bubble markets that’s amplified.
The other source of monetary operations comes from foreign central banks, and I consider this a market distortion, as much as direct monetization. Market distortions such as large scale purchases of Freddie Mac agencies for only 25 basis points over Treasuries, sends false market signals all up and down the financial system, and encourages even more cult of greed behavior. That’s what’s happened in spades. The data for all this can be gleaned here.
However, it is also important to realize that in a late stage Bubble economy, “liquidity” might not be liquidity at all, especially if it’s being generated by private financial institutions, who are running into trouble using Ponzi finance. For example, pigman JP Morgan (JPM) has until this week been providing ample financing to the aforementioned Ownit. Pigmen until now have been fully enabled to create so called liquidity, literally out of thin air, via carry trades, deregulated market schemes, derivatives, etc. Correspondingly, Risklove Ownit until this week has been a full court press, just taking advantage of the cult of greed set up, and generating a raft of silly season loans. Inevitably, silly season loans sputter and fail, especially when new Ponzi finance is choked off, and when that happens liquidity suddenly evaporates. I think that’s what we are beginning to see. Of course, this may just be a hiccup, as next week another silly season $15 billion LBO may emerge on the scene. Still, going into year end the whole Ponzi scheme may be up in the air, and if not, really it’s just a matter of time.
The point I’m getting to with this is that this liquidity creation is a direct function of the animal spirits of Riskloves and Pig Men. Right now their primary motivation and incentive is greed and stealing (for quick fees that they can put into their rat-lines), not rational investment decisions. That’s why credit spreads until this month have been quiet and subdued. So what happens if more events are coming along the lines of the Sebring and Ownit subprime pull the plugs? Can the monetary authorities (Wizards) simply monetize it, and with impunity?
I think the answer to that is a little, but not a lot. If the plug pulling begins to really gather steam, you are talking about trillions of dollars of bloated, overpriced securities that will need to be supported. The US Federal Reserve on average has monetized $576 million a week via permanent adds or coupon passes. Overall Fed liquid assets growth has been a fairly inflationary 4-5% track of late, as you can see in Lee Adler’s chart available in his Wall Street Examiner Professional edition. Of course there is potential for the Wizards to pick up the monetizing pace, but to what, a billion a week? And what effect would an extra half billion a week have, if a trillion or two in asset backed securities are getting a severe haircut? Probably not much. Fed monetizing only works to grease the skids when the animal Risklove spirits are running hard, and will be a drop in the bucket if the cult of greed turns into the cult of fear.
« Throwing More Dysfunctional Fuel on the Forest Fire
The Jungle: Subprime Credit Crunch, the Cult of Greed, and “Liquidity”
I have always felt that the subprime lending business model was based on a slash and burn predatory model. It was created to take advantage of the post 911, so called “pro-business”, regulatory lite, easy money environment. If Upton Sinclair were alive today, this would be the 2006 version of his 1906 book, “The Jungle”. The method of these toxic loan purveyors was to hide under the guise of “helping with the American get rich quick homeowner dream”, and to exploit these markets to the max, to the bitter end, and mostly for upfront fees, and then completely pull the plug. It is my strong sense that we have finally reached the plug pull stage, and that the bogus dream has become a cult of greed nightmare.
Incidentally, I DO NOT believe that this confined to just subprime, nor do I believe subprime is small potatoes. There were $350 billion subprime loans originated in 2003, $550B in 2004, $625B in 2005, and $437B through 3Q, 06. That’s $1.962 trillion, and it was used by many to buy or refinance housing at or near the peak in prices, and in Bubble regions where weakness is now the greatest. And this does not even include other nonconforming Alt A mortgages, made to so called higher credits for second homes and speculation. On this front, the interest only mortgage especially is a time bomb, because many (option ARMs or neg-ams) have regular amortization provisions. Particularly, read “triggers” in this explaination.
The subprime market is dominated by ten purveyors. In the 3Q, 2006, they originated 62.2% of all US subprime mortgages. Almost all the rest is handled by a second tier of 15 outfits. The top 25 originated 87.6% of all these loans in 3Q. Therefore, it is this group that should be watched like a hawk.
One of the claims of the apologists as to why these companies are now folding, centers around the notion of loan originations drying up. In actuality, only some of these outfits have backed away from the market as total 2Q to 3Q subprime originations only fell 1.7%. An incredible $175 billion in these cult of greed loans were still made in 3Q, directly in the face of sliding credit conditions, and the new nontraditional mortgages lending guidelines, put in place on Sept. 30, 2006. A glance at the exhibit above indicates only #1 Well Fargo, #3 HSBC (Household Finance), #9 Ameriquest, (was #4 in 2005), and #10 Option One, backed off the pace. Still, others (scroll to Fifth Third item) who hold MBS in their portfolios, are beginning to offload them.
But, #11 toxic purveyor Ownit, who closed shop this week, jumped into the fray, and ran their string out to the bitter end. They actually increased first half, 2006 output to $5.5 billion. That’s 30% annualized greater than in 2005! Get the picture? The reason Ownit is finished is because toxic loans are being returned for repurchase, they can’t cover them, and their Risklove backers have called it quits. That’s serious stuff to my way of thinking.
Which brings us to the whole cliched, overused “global liquidity” question. Barry Ritholtz posted an item, picking up on a Alan Abelson column on the matter. I agree with their premise, and also please note the charts. As I read different chat boards and blogs, I get the sense that observers are confused about what is driving this “liquidity”, or what it even is? The source of this confusion is that monetary authorities print the money, and that’s perceived as “the liquidity”. This is only half the truth. The Federal Reserve can purchase (monetize) securities through several mechanisms: open market permanent operations, temporary open market operations, securities loans, and increasingly in modern Bubble markets, with bluff and talk. Thus in normal markets, they can influence financial and credit conditions at the margin, and in Bubble markets that’s amplified.
The other source of monetary operations comes from foreign central banks, and I consider this a market distortion, as much as direct monetization. Market distortions such as large scale purchases of Freddie Mac agencies for only 25 basis points over Treasuries, sends false market signals all up and down the financial system, and encourages even more cult of greed behavior. That’s what’s happened in spades. The data for all this can be gleaned here.
However, it is also important to realize that in a late stage Bubble economy, “liquidity” might not be liquidity at all, especially if it’s being generated by private financial institutions, who are running into trouble using Ponzi finance. For example, pigman JP Morgan (JPM) has until this week been providing ample financing to the aforementioned Ownit. Pigmen until now have been fully enabled to create so called liquidity, literally out of thin air, via carry trades, deregulated market schemes, derivatives, etc. Correspondingly, Risklove Ownit until this week has been a full court press, just taking advantage of the cult of greed set up, and generating a raft of silly season loans. Inevitably, silly season loans sputter and fail, especially when new Ponzi finance is choked off, and when that happens liquidity suddenly evaporates. I think that’s what we are beginning to see. Of course, this may just be a hiccup, as next week another silly season $15 billion LBO may emerge on the scene. Still, going into year end the whole Ponzi scheme may be up in the air, and if not, really it’s just a matter of time.
The point I’m getting to with this is that this liquidity creation is a direct function of the animal spirits of Riskloves and Pig Men. Right now their primary motivation and incentive is greed and stealing (for quick fees that they can put into their rat-lines), not rational investment decisions. That’s why credit spreads until this month have been quiet and subdued. So what happens if more events are coming along the lines of the Sebring and Ownit subprime pull the plugs? Can the monetary authorities (Wizards) simply monetize it, and with impunity?
I think the answer to that is a little, but not a lot. If the plug pulling begins to really gather steam, you are talking about trillions of dollars of bloated, overpriced securities that will need to be supported. The US Federal Reserve on average has monetized $576 million a week via permanent adds or coupon passes. Overall Fed liquid assets growth has been a fairly inflationary 4-5% track of late, as you can see in Lee Adler’s chart available in his Wall Street Examiner Professional edition. Of course there is potential for the Wizards to pick up the monetizing pace, but to what, a billion a week? And what effect would an extra half billion a week have, if a trillion or two in asset backed securities are getting a severe haircut? Probably not much. Fed monetizing only works to grease the skids when the animal Risklove spirits are running hard, and will be a drop in the bucket if the cult of greed turns into the cult of fear.
The other group to watch are the foreign central banks. They been running about $3.88 billion per week year to date in US Old Maid card additions to custodial holdings. Are they going to hang tough in a credit seizure situation? I don’t think so, primarily because it’s not a monolithic group. And in a non-monolithic daisy chain, some major player (or players) are sure to break off when they see the rats pulling the plug and jumping ship. In fact, on the monetizing front the trend is still towards tightening. which India tightened aggressively last night, sending the Bombay Stock Exchange bellwether Sensex down by 3% on selling on the Reserve Bank’s decision to hike Cash Reserve Ratio of banks by half a percentage point.
Net, net, if the end of the cult of greed is at hand, liquidity will be a coward. It’s human nature. A billion monetized here, and a billion there will have virtually no impact. And in such a climate, if they go for the quick ten billion injections, the markets could panic even more as it would be likely to flow into the wrong asset, such as energy.
gipa69
collegio dei patafisici
Investment Strategy
by Jeffrey Saut
“Dr. Doom”
Well, it finally happened, last week one of my own gang called me Dr. Doom. I guess it was inevitable because in this business if you are not forecasting “Dow 20,000” you are deemed a “bear.” However, the veiled reference to Dr. Doom and Dr. Gloom of an era gone by is not exactly appropriate. Indeed, the dynamic duo of Dr. Henry Kaufman (Dr. Doom) and Dr. Albert Wojnilower (Dr. Gloom) were the market gurus of the day in the 1970s and were predicting the end of the economic world as we knew it. Clearly that has not been our mantra, as anyone reading these missives since 1999 knows.
Verily, we turned cautious with the Dow Theory “sell signal” of September 1999 and looked like an idiot as the markets traded higher into their 2000 “tops.” That said, we stayed cautious on the overall averages into the 9/11/01 tragedies despite the fact that we posted decent investment returns over that 24-month period using individual stocks and mutual funds. Following the Trade Towers, we turned pretty bullish on a trading basis and were aggressively bullish at the November 2002 lows and again at the March 2003 subsequent retest of those November 2002 lows. All of our bullish “calls” on the U.S. Indices, however, have been within the context of our “range-bound” stock market thesis. And notably, the S&P 500 remains in a trading range locked between its peak of 1553 and its reaction low of 775.
Moreover, anyone listening to our continuing message of the past five years knows we have been unwaveringly bullish on “stuff” (oil, gas, coal, timber, fertilizer, agriculture, base/precious metals, cement, water, and anything remotely related to our long-standing stuff-stock theme). We have also been steadfastly bullish on the emerging markets over that same timeframe, which has produced some spectacular returns for our clients. Most recently, the emerging markets have continued to outperform their U.S. “brethren,” for despite the S&P 500’s 12.9% year-to-date gain, Bombay is up 46.8%, Caracas is better by 123.4%, Jakarta has gained 52.7%, Mexico has climbed 44.7%, Brazil has improved by 36.7% . . . well you get the idea.
While we have been wildly bullish on most of these markets, our conservative vehicle of choice to play such venues has been MFS’s International Diversification Fund (MDIDX/$16.04), which checks ALL of the investment style-boxes, and has returned 24% year-to-date net of fees. So if you want to “hang” the Dr. Doom moniker on us that’s fine, we’ll monetize that title all the way to the “bank” content in the knowledge that you have plainly not been listening to our strategic message of the last seven years. Or as one money manager emailed us last week:
“I just listened to your verbal strategy comments of last Tuesday. You said you have been too cautious on the aggregate indices over the past few months. Well maybe that’s true, but there were some other successes you didn't mention that have been very impressive (you may have mentioned them on certain calls, but I didn't hear them all because I missed a few): i.e., EWM (you felt strong about Malaysia – low inflation/strong growth); EWC and EWZ – similar; water, water everywhere – VE, SZE, ITT, and WTS; nickel – Inco and Falconbridge; the grains (wheat, corn, soybeans, etc.) – BG; the repeal of PUHCA – POM, ITC, and unofficially ILA; many of the tech stocks “in drag” like ROG, IN, S, TWX, ORCL, AMT, SBAC, etc.; as well, you recommended MANY of the Exchange Traded Funds/Holders, and numerous mutual funds, that have produced HUGE gains for our investors. These are just a few of the ideas I own for myself and many clients that have been very good, and in some cases, great! I know you were only alluding to your caution of recent history, but while we are not doing a lot of ‘trading’ right here, we are thrilled with the calls you have made and we love your themes!!!!!” . . .
To which I replied – thank you very much!
As for the “here and now,” we have deemed the recent performance by the major market indices to be somewhat “unnatural.” Markets typically go up, correct by 25%, and then re-rally if they are going to trade higher. This, ladies and gentlemen, has not been the case recently as the averages have “unnaturally” vaulted higher without so much as ANY correction. We have suggested this phenomena was triggered by Goldman Sachs’ re-weighting of its much institutionally indexed commodity index last July. Why Goldman would mysteriously reduce the weighting of gasoline from 7.3% to 2.5%, in a gasoline-centric economy, and stage those reductions incrementally right into the November elections is a mystery to us, but there you have it.
Following that, the Department of Energy mysteriously said it would not add to the Strategic Petroleum Reserve (SPR) until after the winter months, even though the SPR was below prudent norms. This is also a mystery to us, but once again there you have it. Then, when it looked like the equity markets were set-up to correct (read: decline) in mid-October, the NYSE petitioned the SEC, and was granted, a mysterious reduction in margin requirements for an already over-margined hedge fund community. And that “mysterious surprise” gave the major market indices another leg-up (read: re-rally). Again, why in the world one would introduce more leverage into an already over-leveraged hedge fund community is a mystery to us! Also mystical is why every time the equity markets look like they are set up for a downside correction, do “buyers from Mars” appear in the futures markets to prevent a decline? We have documented such occurrences in past missives where those “mysterious buyers” have shown up at 6:30 at night and “bid” the S&P 500 futures from 1375 to 1397 (or +22 points) in a mere two minutes, but that is a discussion for another time.
The current unnatural state of the equity markets continues to leave us cautious; although we have learned the hard way it is difficult to “break” the equity markets to the downside during the ebullient month of December. Consequently, our sense is that the markets will consolidate here and then attempt to trade higher into year-end. If the S&P 500 can vault above 1415, with conviction, we can see near-term objectives into the 1440 – 1445 level. While we are disinclined to play the indexes on a trading basis, we have purchased some stocks recently in investment accounts. For example, we bought HCC Insurance Holdings on its options back-dating scandal that caused the company’s CEO to resign. At the time the shares had declined to where they were trading at roughly 1.5x book value for only the second time in HCC’s history. We also recommended Strong Buy-rated Opsware, on its recent earnings “miss,” and concurrent share price decline to $7.80, since the market for its IT automation software is new and un-penetrated, giving Opsware the ability to gain momentum and build its brand awareness. Another name for your consideration is Joy Global, which is rated Equal Weight by our research affiliate Lehman Brothers with an attendant $57.00 per share upside price target. Since the shares are down from their $72 mid-March 2006 high, hopefully they have already been through their respective bear market.
The call for this week: Over the past few weeks ALL asset classes have rallied. However, that “all skate” environment changed last week with most of the commodities we monitor turning down in price. Sill, many of our proprietary stock indicators made new all-time highs, yet the D-J Industrial Average (DJIA) has failed to post a new closing high since November 17th. More importantly, the D-J Transportation Average (DJTA) has not confirmed the DJIA’s “march” to new all-time highs. Indeed, the Transport’s remain well below their all-time high of 4998.95 that was recorded last May. According to Dow Theory, this is a another cautionary “red flag.” Also arguing for caution is the current overbought nature of the equity markets. Meanwhile, the 10-year T’Note bottomed at a 4.40% yield last week, and closed Friday yielding 4.55%, and the D-J Utility Average registered a “buying climax” (read: potential top). Further, we got a short-term “buy signal” on the U.S. Dollar Index last week (read: stronger dollar), and a short-term “sell signal” on the precious metal, as the cognitive dissonance environment continues. We continue to invest and trade accordingly . . .
December 11, 2006
by Jeffrey Saut
“Dr. Doom”
Well, it finally happened, last week one of my own gang called me Dr. Doom. I guess it was inevitable because in this business if you are not forecasting “Dow 20,000” you are deemed a “bear.” However, the veiled reference to Dr. Doom and Dr. Gloom of an era gone by is not exactly appropriate. Indeed, the dynamic duo of Dr. Henry Kaufman (Dr. Doom) and Dr. Albert Wojnilower (Dr. Gloom) were the market gurus of the day in the 1970s and were predicting the end of the economic world as we knew it. Clearly that has not been our mantra, as anyone reading these missives since 1999 knows.
Verily, we turned cautious with the Dow Theory “sell signal” of September 1999 and looked like an idiot as the markets traded higher into their 2000 “tops.” That said, we stayed cautious on the overall averages into the 9/11/01 tragedies despite the fact that we posted decent investment returns over that 24-month period using individual stocks and mutual funds. Following the Trade Towers, we turned pretty bullish on a trading basis and were aggressively bullish at the November 2002 lows and again at the March 2003 subsequent retest of those November 2002 lows. All of our bullish “calls” on the U.S. Indices, however, have been within the context of our “range-bound” stock market thesis. And notably, the S&P 500 remains in a trading range locked between its peak of 1553 and its reaction low of 775.
Moreover, anyone listening to our continuing message of the past five years knows we have been unwaveringly bullish on “stuff” (oil, gas, coal, timber, fertilizer, agriculture, base/precious metals, cement, water, and anything remotely related to our long-standing stuff-stock theme). We have also been steadfastly bullish on the emerging markets over that same timeframe, which has produced some spectacular returns for our clients. Most recently, the emerging markets have continued to outperform their U.S. “brethren,” for despite the S&P 500’s 12.9% year-to-date gain, Bombay is up 46.8%, Caracas is better by 123.4%, Jakarta has gained 52.7%, Mexico has climbed 44.7%, Brazil has improved by 36.7% . . . well you get the idea.
While we have been wildly bullish on most of these markets, our conservative vehicle of choice to play such venues has been MFS’s International Diversification Fund (MDIDX/$16.04), which checks ALL of the investment style-boxes, and has returned 24% year-to-date net of fees. So if you want to “hang” the Dr. Doom moniker on us that’s fine, we’ll monetize that title all the way to the “bank” content in the knowledge that you have plainly not been listening to our strategic message of the last seven years. Or as one money manager emailed us last week:
“I just listened to your verbal strategy comments of last Tuesday. You said you have been too cautious on the aggregate indices over the past few months. Well maybe that’s true, but there were some other successes you didn't mention that have been very impressive (you may have mentioned them on certain calls, but I didn't hear them all because I missed a few): i.e., EWM (you felt strong about Malaysia – low inflation/strong growth); EWC and EWZ – similar; water, water everywhere – VE, SZE, ITT, and WTS; nickel – Inco and Falconbridge; the grains (wheat, corn, soybeans, etc.) – BG; the repeal of PUHCA – POM, ITC, and unofficially ILA; many of the tech stocks “in drag” like ROG, IN, S, TWX, ORCL, AMT, SBAC, etc.; as well, you recommended MANY of the Exchange Traded Funds/Holders, and numerous mutual funds, that have produced HUGE gains for our investors. These are just a few of the ideas I own for myself and many clients that have been very good, and in some cases, great! I know you were only alluding to your caution of recent history, but while we are not doing a lot of ‘trading’ right here, we are thrilled with the calls you have made and we love your themes!!!!!” . . .
To which I replied – thank you very much!
As for the “here and now,” we have deemed the recent performance by the major market indices to be somewhat “unnatural.” Markets typically go up, correct by 25%, and then re-rally if they are going to trade higher. This, ladies and gentlemen, has not been the case recently as the averages have “unnaturally” vaulted higher without so much as ANY correction. We have suggested this phenomena was triggered by Goldman Sachs’ re-weighting of its much institutionally indexed commodity index last July. Why Goldman would mysteriously reduce the weighting of gasoline from 7.3% to 2.5%, in a gasoline-centric economy, and stage those reductions incrementally right into the November elections is a mystery to us, but there you have it.
Following that, the Department of Energy mysteriously said it would not add to the Strategic Petroleum Reserve (SPR) until after the winter months, even though the SPR was below prudent norms. This is also a mystery to us, but once again there you have it. Then, when it looked like the equity markets were set-up to correct (read: decline) in mid-October, the NYSE petitioned the SEC, and was granted, a mysterious reduction in margin requirements for an already over-margined hedge fund community. And that “mysterious surprise” gave the major market indices another leg-up (read: re-rally). Again, why in the world one would introduce more leverage into an already over-leveraged hedge fund community is a mystery to us! Also mystical is why every time the equity markets look like they are set up for a downside correction, do “buyers from Mars” appear in the futures markets to prevent a decline? We have documented such occurrences in past missives where those “mysterious buyers” have shown up at 6:30 at night and “bid” the S&P 500 futures from 1375 to 1397 (or +22 points) in a mere two minutes, but that is a discussion for another time.
The current unnatural state of the equity markets continues to leave us cautious; although we have learned the hard way it is difficult to “break” the equity markets to the downside during the ebullient month of December. Consequently, our sense is that the markets will consolidate here and then attempt to trade higher into year-end. If the S&P 500 can vault above 1415, with conviction, we can see near-term objectives into the 1440 – 1445 level. While we are disinclined to play the indexes on a trading basis, we have purchased some stocks recently in investment accounts. For example, we bought HCC Insurance Holdings on its options back-dating scandal that caused the company’s CEO to resign. At the time the shares had declined to where they were trading at roughly 1.5x book value for only the second time in HCC’s history. We also recommended Strong Buy-rated Opsware, on its recent earnings “miss,” and concurrent share price decline to $7.80, since the market for its IT automation software is new and un-penetrated, giving Opsware the ability to gain momentum and build its brand awareness. Another name for your consideration is Joy Global, which is rated Equal Weight by our research affiliate Lehman Brothers with an attendant $57.00 per share upside price target. Since the shares are down from their $72 mid-March 2006 high, hopefully they have already been through their respective bear market.
The call for this week: Over the past few weeks ALL asset classes have rallied. However, that “all skate” environment changed last week with most of the commodities we monitor turning down in price. Sill, many of our proprietary stock indicators made new all-time highs, yet the D-J Industrial Average (DJIA) has failed to post a new closing high since November 17th. More importantly, the D-J Transportation Average (DJTA) has not confirmed the DJIA’s “march” to new all-time highs. Indeed, the Transport’s remain well below their all-time high of 4998.95 that was recorded last May. According to Dow Theory, this is a another cautionary “red flag.” Also arguing for caution is the current overbought nature of the equity markets. Meanwhile, the 10-year T’Note bottomed at a 4.40% yield last week, and closed Friday yielding 4.55%, and the D-J Utility Average registered a “buying climax” (read: potential top). Further, we got a short-term “buy signal” on the U.S. Dollar Index last week (read: stronger dollar), and a short-term “sell signal” on the precious metal, as the cognitive dissonance environment continues. We continue to invest and trade accordingly . . .
December 11, 2006
gipa69
collegio dei patafisici
FX Trading - Hodgpodge
Soft-landing talk …
It was a nasty reversal in the dollar on Friday - twice. First it jumped on news that non-farm payrolls for November were better than expected. Then it fell sharply … then rallied sharply later in the day. In the minds of many, November's payroll report represents the basis for a "soft" landing in the US economy, justifying Fed chairman Ben Bernanke's optimistic view. Until we see more proof that the impact of the housing bust on the US consumer is behind us, we will work off the assumption that the rally in the dollar represents only an oversold correction.
BOJ rate hike talk …
The Japanese yen was getting whacked a bit on Monday morning on market talk suggesting the Bank of Japan won't hike rates in December. But there was improvement in consumer sentiment, based on numbers released on Monday in Japan. We get a look at the all-important Japanese Tankan Survey on Thursday. If we see a good number on Thursday, we would expect market talk to swing back toward a December hike from the BOJ.
Soft-landing talk …
It was a nasty reversal in the dollar on Friday - twice. First it jumped on news that non-farm payrolls for November were better than expected. Then it fell sharply … then rallied sharply later in the day. In the minds of many, November's payroll report represents the basis for a "soft" landing in the US economy, justifying Fed chairman Ben Bernanke's optimistic view. Until we see more proof that the impact of the housing bust on the US consumer is behind us, we will work off the assumption that the rally in the dollar represents only an oversold correction.
BOJ rate hike talk …
The Japanese yen was getting whacked a bit on Monday morning on market talk suggesting the Bank of Japan won't hike rates in December. But there was improvement in consumer sentiment, based on numbers released on Monday in Japan. We get a look at the all-important Japanese Tankan Survey on Thursday. If we see a good number on Thursday, we would expect market talk to swing back toward a December hike from the BOJ.
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