I know, I know, but I am good at reading price action charts, so if I get a good macro hint, I can read into price action and see if it is happening or not. I really appreciate your work, so thank you guru Alf.
Hi Alf, thanks for your work, as always great great quality. A question crossed my mind, what if your credit impulse fail you this time ? The environment today doesn't really look like anything we had since 2015 (starting point of the chart), what if fiscal stimulus, Crypto/NFT/Metaverse made people more independent. It's really a basic question without big rational behind I was just wondering what would be the implication in your thinking process and your trades :)
(I am reading the entire Taleb collection at the moment, I think it starts to get to me haha)
Thanks! How are you sure you are not "early" on in the growth slow down? Sure it is showing weakness, but recall the 2+T on consumer b/s also last couple of days I began to consider that monetary acts with a lag, so taper will take some time to hit 1st stocks and 2nd real econ.
thanks! .. jawboning tightens it also I guess.. hmm .. as they start/ramp up QE, rate of change in liquidity move towards looser .. but lets say they just keep buying bonds(all else equal e.g TGA etc steady) at some pace, as at the moment. Do how should one view that in term of liquidity? 2nd derivate is constant.
to my mind what you are saying is that it is the 2nd derivate that matter and coupled with jawboning this means tighter liquidity..
how about this! the level of rate of change transfers along the "arrows".. ? is it that simple? and keeping QE at same level e.g 20b a month, is no change in this
Thank you very much for writing this post. I thought the rise in inflation was decreasing real yields (the plot above with the evolution of UST 30Y real yields points in this direction), but here you talk about "the abrupt rise in real yields". Where is that rise in real yields happening?
Alf, I have really enjoyed your work on RVBD and interviews with Darius. Big fan. WhaThis may be too granular but as it relates to portfolio construction do you build your positions incrementally to get to a full allocation or do set full allocation in one trade and let your discipline/rules flow from there? You’re very generous replying to everyone and what you share here is outstanding. Thanks.
Hi Alf, Great interview on Real Vision on money. Can you explain please...... I understand that QE means that the Fed is swapping Reserves for Treasury bonds, so there is no real change in debt. Looking at the expansion of the Fed balance sheet form 2008 to 2022, how has this debt been created? Brilliant interviews, keep them coming!
I notice in your trade table there is one column labeled as monthly vol, I understand it’s 10 year monthly return of certain asset or stock, but how do you calculate this number? I spend some time trying to do it, my number seems a bit off from yours. Could elaborate on that?
When you have 2% stop and you have 6 trades and if SL hits on 3 and rest 3 yet to reach target, what do you do? Move the stops on open position to entry?
Hello Alfonso ,
I AM HUGE FAN OF YOUR ANALYSIS .
Thank you for helping peopl.
could you provide me the link for your portfolio .
Hi Alf, seeing you long on chinese Real Estate, what are your thoughts on chinese HY, very tilted towards real estate developers? Thanks
They should do well, I guess.
Good call on oil Alf. Let me itroduce myself, my name is Marcus I am your new disciple.
Remember, Marcus: there are no gurus, and I will be wrong too plenty of times.
I know, I know, but I am good at reading price action charts, so if I get a good macro hint, I can read into price action and see if it is happening or not. I really appreciate your work, so thank you guru Alf.
Hi Alf,
Interesting take on CHINA macro. Any word of caution against a LONG gold position here?
I am neutral on Gold after having being short for few weeks at the beginning of the year.
No big view, to be honest.
Hi Alf, thanks for your work, as always great great quality. A question crossed my mind, what if your credit impulse fail you this time ? The environment today doesn't really look like anything we had since 2015 (starting point of the chart), what if fiscal stimulus, Crypto/NFT/Metaverse made people more independent. It's really a basic question without big rational behind I was just wondering what would be the implication in your thinking process and your trades :)
(I am reading the entire Taleb collection at the moment, I think it starts to get to me haha)
It's a great question, Robin.
Hard to model as well, I think the answer is just that I'll be humble and change my mind if facts are changing.
Thanks! How are you sure you are not "early" on in the growth slow down? Sure it is showing weakness, but recall the 2+T on consumer b/s also last couple of days I began to consider that monetary acts with a lag, so taper will take some time to hit 1st stocks and 2nd real econ.
There is a considerable lag already incorporated between credit impulse and effect on real economy/asset class performance
thanks! .. jawboning tightens it also I guess.. hmm .. as they start/ramp up QE, rate of change in liquidity move towards looser .. but lets say they just keep buying bonds(all else equal e.g TGA etc steady) at some pace, as at the moment. Do how should one view that in term of liquidity? 2nd derivate is constant.
to my mind what you are saying is that it is the 2nd derivate that matter and coupled with jawboning this means tighter liquidity..
and it is this rate of change that flows as in the arrows in the picture here https://nonlinearexpectations.blogspot.com/2021/10/liquidity.html
how about this! the level of rate of change transfers along the "arrows".. ? is it that simple? and keeping QE at same level e.g 20b a month, is no change in this
Alf, when you say you watch '5y forward, 5y US real yields', do you mean 5-Year, 5-Year Forward Inflation Expectation Rate (T5YIFR) minus inflation?
5y5y real yields = 5y5y nominal yields - 5y5y inflation break-evens.
If you have a Bloomberg, I can tell you how to build the ticker.
All I've got is poor's man bloomberg terminal - fred economic data ;)
Hi Alf,
Thank you very much for writing this post. I thought the rise in inflation was decreasing real yields (the plot above with the evolution of UST 30Y real yields points in this direction), but here you talk about "the abrupt rise in real yields". Where is that rise in real yields happening?
Best regards
Javier
Hi Javier, nominal yields can be approximated as real yields + inflation break-evens.
YTD, approx. 90% of the move up in nominal yields is explained by real yields going up.
Thank you.
My pleasure, Chris!
Alf, I have really enjoyed your work on RVBD and interviews with Darius. Big fan. WhaThis may be too granular but as it relates to portfolio construction do you build your positions incrementally to get to a full allocation or do set full allocation in one trade and let your discipline/rules flow from there? You’re very generous replying to everyone and what you share here is outstanding. Thanks.
Hi Alf, Great interview on Real Vision on money. Can you explain please...... I understand that QE means that the Fed is swapping Reserves for Treasury bonds, so there is no real change in debt. Looking at the expansion of the Fed balance sheet form 2008 to 2022, how has this debt been created? Brilliant interviews, keep them coming!
Hi Alf,
I notice in your trade table there is one column labeled as monthly vol, I understand it’s 10 year monthly return of certain asset or stock, but how do you calculate this number? I spend some time trying to do it, my number seems a bit off from yours. Could elaborate on that?
Many thanks
David
Hi David!
That's the standard deviation of the monthly rolling returns using a 10y historical timeframe.
Hi Alf,
thanks for this article. I am wondering why you are in your long term portfolio not holding any real estates? Could you explain that a little bit?
Because I already own an apartment I am renting out, so in principle I am leveraged long real estate already :) nice observation though
Hi Alf, where can we track your portfolio?
Hi JP, I publish regular updates on my Twitter account (@MacroAlf) and here on The Macro Compass.
could you provide me the link for your portfolio .
When you have 2% stop and you have 6 trades and if SL hits on 3 and rest 3 yet to reach target, what do you do? Move the stops on open position to entry?