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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (73387)	4/20/2011 2:38:34 PM
From: pogohere	Respond to of 218881

re: "QE2 has for all practical purposes already ended. As I recall about 85% of the Fed's gunpowder has been spent so additional QE to end of June will be slowed (and probably has already slowed) considerably." Fed QE schedule April 13 to May 11 SETTLEMENT DATE OPERATION TYPE2 MATURITY RANGE EXPECTED PURCHASE SIZE April 13, 2011 April 14, 2011 Outright Treasury Coupon Purchase 10/15/2012-09/30/2013 $4 - $6 billion April 14, 2011 April 15, 2011 Outright Treasury Coupon Purchase 05/15/2018-02/15/2021 $6 - $8 billion April 15, 2011 April 18, 2011 Outright Treasury Coupon Purchase 04/30/2015-09/30/2016 $5 - $7 billion April 18, 2011 April 19, 2011 Outright Treasury Coupon Purchase 08/15/2028-02/15/2041 $1.5 - $2.5 billion April 19, 2011 April 20, 2011 Outright Treasury Coupon Purchase 10/31/2013-03/31/2015 $5 - $7 billion April 20, 2011 April 21, 2011 Outright TIPS Purchase 04/15/2013-02/15/2041 $1 - $2 billion April 25, 2011 April 26, 2011 Outright Treasury Coupon Purchase 10/31/2016-03/31/2018 $6 - $8 billion April 26, 2011 April 27, 2011 Outright Treasury Coupon Purchase 05/15/2021-11/15/2027 $1.5 - $2.5 billion. April 28, 2011 April 29, 2011 Outright Treasury Coupon Purchase 04/30/2015-09/30/2016 $5 - $7 billion April 29, 2011 May 2, 2011 Outright Treasury Coupon Purchase 10/31/2013-03/31/2015 $5 - $7 billion May 2, 2011 May 3, 2011 Outright Treasury Coupon Purchase 05/15/2018-02/15/2021 $6 - $8 billion May 3, 2011 May 4, 2011 Outright Treasury Coupon Purchase 11/15/2016-05/02/2018 $6 - $8 billion May 4, 2011 May 5, 2011 Outright TIPS Purchase 04/15/2013-02/15/2041 $1 - $2 billion May 5, 2011 May 6, 2011 Outright Treasury Coupon Purchase 08/15/2028-02/15/2041 $1.5 - $2.5 billion May 6, 2011 May 9, 2011 Outright Treasury Coupon Purchase 11/15/2013-04/30/2015 $5 - $7 billion May 9, 2011 May 10, 2011 Outright Treasury Coupon Purchase 05/15/2018-02/15/2021 $6 - $8 billion May 10, 2011 May 11, 2011 Outright Treasury Coupon Purchase 05/15/2015-10/31/2016 $5 - $7 billion May 11, 2011 May 12, 2011 Outright Treasury Coupon Purchase 11/15/2016-05/02/2018 $6 - $8 billion The next release of the approximate purchase amount and tentative outright Treasury operation schedule will be at 2 p.m. on May 11, 2011. At that time, the Desk will also publish information on prices paid for securities included in the operations listed above. ______________________________ 1Operations are tentatively scheduled to begin around 10:15 AM and close at 11:00 AM unless noted otherwise. 2Nominal coupon operations are specified as “Outright Treasury Coupon Purchase” and TIPS operations are specified as “Outright TIPS Purchase” newyorkfed.org

To: carranza2 who wrote (73387)	4/20/2011 8:08:51 PM
From: pogohere	1 Recommendation Respond to of 218881

per: Hussman: "To avoid the potentially untidy embarrassment of being insolvent on paper, the Fed quietly made an accounting change several weeks ago that will allow any losses to be reported as a new line item - a "negative liability" to the Treasury - rather than being deducted from its capital. Now, technically, a negative liability to the Treasury would mean that the Treasury owes the Fed money, which would be, well, a fraudulent claim, and certainly not a budget item approved by Congress, but we've established in recent quarters that nobody cares about misleading balance sheets, Constitutional prerogative, or the rule of law as long as speculators can get a rally going, so I'll leave it at that." [emphasis added] hussman.net This is an important caveat: much of the logic afoot in the land depends on changing the rules when the going renders the players either or both criminal or insolvent. The FASB changed the former "mark-to-market" rules to keep the game going. There is a veritable cornucopia of toxic assets from sea to shining sea. Assets shining and stinking like rotten mackerel in the moonlight. Hussman again: "Though the market has not recovered to its February highs here, the measures that define the "overvalued, overbought, overbullish, rising yields" syndrome are actually worse now, on balance. While there remains a possibility that we can clear some component of this syndrome without also observing a strong deterioration in broader market internals (including breadth across individual stocks, industries, and sectors, leadership measures, price-volume action across a wide range of industries and security types, and other factors), conditions are so extended here that there is now only a narrow "window" between a market decline that would be sufficient to clear the overbought or overbullish components of the present hostile syndrome, and a market decline that would signal a larger and more robust shift toward investor risk aversion. Put simply, a market decline that clears this syndrome could be a whopper. That said, we'll respond to the evidence as it emerges, and will continue to look for opportunities to accept exposure to market fluctuations as the overall return/risk profile improves." [emphasis added] I suggest the rules changes noted above tend to make the "narrow window" too narrow to get through with any facility; i.e., the particular swan that shows up may give no advance notice at all.

To: carranza2 who wrote (73387)	4/20/2011 8:53:58 PM
From: TobagoJack	Read Replies (1) \| Respond to of 218881

continuation of the investment committee meeting of which i am a member From: W Sent: Thu, April 21, 2011 4:30:49 AM Subject: summary PC, thks for putting in the research effort on hussman and your comments. On the strength of your recommendation, I read hussman 2x and slept on it before responding: Hussman: the new news for me was how slow fed can raise rates because of the large monetary base post qe2. before the unconventional qe2, we never had to deal with this drag on raising rates. disagree that there can be any exogenous event which can influence short term rates. 3mth tbills will be dictated by fed funds. Disagree that fed has to worry about any 50:1 leverage ratio or any loss to balance sheet. It’s truly accounting games. W’s view of the world what is the best hedge against inflation? Tips or gold or silver? Tips is actually not a bad instrument as I checked it out further and it gets adjusted for headline inflation, not core inflation. BUT tips as we know is a hedge against usa inflation, not global inflation such as gold. There is neg real rates in usa , china and japan. The 3 largest gdp. That’s good enough for me to think that gold rallies until rates go up meaningfully. any drag on raising rates because of the large monetary base according to hussman means current steep yield curve will stay steep for longer.. so nly is the curve steepening play. This week was probably my personal best trading week against adversity. So I began the past week’s ic call by saying that I felt better about the portf than would be indicated by the mtd on Monday at -.50%; today, we’re at +1.1% mtd because on Monday, we 1) bot gold, gdx and silver on the dip 2) bot xle and xlb as an outperformance for spy 3) bot audjpy 4) I wasn’t shaken out of the large incr of risk units from 2.3 to 3.0 as I had in the past because I was highly convicted in our lterm trends and swb showed that after the 1st hour of selling by huge volume, the rest of the day rallied right into the close with steady volume. This gave me conviction. Then swb showed support. On tues, swb showed breakout of support and I held the position further. 5) Mon was an oppty to buy on the dips which we have all agreed are lterm trends on the above mon purchases Today, what to do now? I converted some outright longs in gld, gdx and silver to selling puts; the volume on silver even tho its gone vertical is further reaffirmed by the px action. Since the $40 to 45 move in past 5 days, the avg volume has also incr by almost 2x. wow. tbt finally found a base here according to swb and I added to our single biggest postn: .7R on tbt; this is double my natural steady state of .30R on any single position mon risk units were 3.0R. today its 2.5R the key debate for our IC team is not to debate our views which we all agree but what should our portfolio look like in terms of position size. How much in slv, gld, gdx, tips, as a core position which is not to be touched!!!!! What is to be traded around because there will be increased volatility as we head toward end of qe2.