@michaelsantoli if Citadel didn’t spike the curve a few days before, this would have been a nothing-burger meeting.
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CopyCat Invest (Jamie Kozak, CFA)
6.7K posts
CopyCat Invest (Jamie Kozak, CFA)
@CopyCat_Invest
Former boutique PM not trader. My research, 100% transparency at https://t.co/dvY4xeNeOh. This is not advice, my only promise: I do what I say I do.
Greater Vancouver Katılım Nisan 2017
188 Takip Edilen973 Takipçiler
@TheJudgeCNBC @jimcramer plus ca change, plus ca meme chose.
Interestingly the Fed didn’t need to call an emergency meeting this time (so not exactly the same).
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@INArteCarloDoss That’s bang on. And it’s the market that determines where the curve is going, not the few people on the fed or the few people criticizing the Fed. I think that’s what’s missing, the Fed is letting the market work, not the journalists criticizing him.
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Everyone is so confused that folks are now writing dissertations on how FOMC gets it right more often than the market. Needless to say the premise is totally off here. You can confidently mute anyone making the case that a bunch of armchair economists have judgement > market
1/2
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@firesidealpha To have a good position fall 30-40% and have room to load up then 4 bang, fantastic. To have a whole portfolio fall 30-40% with no dry powder or wiggle-room, ouch but survivable. But to get shut down, don’t even be in that room to get in that corner.
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@conorsen Conversely I see a lot of humility in that messaging, the Fed isn’t so arrogant to tell the market what to do and the Fed will watch what’s happening. Not reacting to a late inning spike by Citadel was ignoring noise.
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@INArteCarloDoss “Bad” reaction was only because of Citadel spiking the punch bowl for their benefit. Meanwhile curve is normally shaped, 1m yield is in fed funds band. If Citadel didn’t spike the punch bowl it would have been a nothing-burger.
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Warsh’s performance yesterday was bad. It could be down to substance or style. Market reacted badly. There is a sense that beyond the desire to scrap forward and not share ex-ante his reaction function, there is incompetence. If this is perception, it needs to be reversed asap.
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In another perspective as the Fed as lender of last resort, the Fed had to engineer absorbing LTCM. Fed didn’t need to be involved in absorbing Situational Awareness.
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The Fed ONLY controls the level at the short end. The rest of the curve is up to market interpretation and market action.
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@KellyCNBC @SullyCNBC why does the 2y suggest 3 hikes? The 2y is 53bps above the 1m which is in the fed funds range. The curve should be normally shaped.
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On a go forward basis, market participants can determine if the economy is absorbing higher yields. The Fed is right to let this action work. Backward looking inflation (or other data) is not a good indicator, focus needs to be on current/incoming.
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And if we go back a couple of years to the Fed cuts, the curve was not normal. Absent those cuts to get to a normal shape, the curve would be much higher today and it’s not clear the economy would have absorbed that well.
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@KellyCNBC it’s difficult to debate the intentions but the call for a hike did spook the markets which drove a selloff. And before the hike call, no hike was widely expected. So why the call? A hike didn’t make sense and the Fed made the right call.
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1. If you didnt see it coming, why was your trust's position oversized?
2. Since the shares have been a dog with fleas it means that you added to make it oversized.
3. I, too am long $MSFT (and Azure was terrific) but the quality of earnings was not solid:
@jimcramer @tomkeene @squawkbox @gnoble79 @SamofAmerica @RPKent @KeithMcCullough @HedgeyeDJ @beckyquick @andrewrsorkin @beckyquick @convertbond
Jim Cramer@jimcramer
Just blown away by the Microsoft quarter. Tour de force. Didn't see it coming because was worried about the trust's oversized load position in it. Satya and Amy--incredible.. Just amazing... HOF
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@TheJudgeCNBC criticism of the Fed hiking ignores that the hike call was a baited fish hook by a participant to bust some positions, not the market actually pricing a hike. The Fed was right to not take the bait.
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@firstadopter More than the funds themselves, it’s important to realize the fed hike call wasn’t about the fed at all, it was a baited fish hook. Fed was right to not take the bait, too bad a bunch of journalists did.
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@steveliesman with news about a large AI fund being liquidated to a large participant, the hike call wasn’t about the Fed at all. And the fish hook unwind sends shockwaves and bewilderment to those not connecting the dots.
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@firstadopter Investors have no idea what earnings look like when price increases reverse, when that happens, and what the cumulative retained earnings would be until then and how much gets spend on capacity. Ie what’s a full-cycle NPV?
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Why do these memory stocks have forward P/Es of 4 if the 2027 memory shortage is going to be worse than the 2026 one?
It's almost as if the stocks are down primarily this month on forced dislocation selling from over-leveraged hedge funds and over-leveraged retail investors.
tae kim@firstadopter
WE ARE SO BACK! This sounds VERY GOOD for memory chip companies. Samsung Electronics (h/t @jukan05 ): "Based on the demand visibility we currently have from customers, a substantial amount of unmet demand will roll over into next year, creating additional supply pressure. We expect the memory shortage in 2027 to be even MORE SEVERE than it is this year, with tight supply conditions likely to persist into 2028."
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@octonion On what basis? Defaults don’t happen because of calls from the sidelines.
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@ArrakisGlobal Investors have no idea what earnings look like after the price increases reverse (or when, or what the cumulative retained earnings will be until then).
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