beerbaron Posted October 12, 2010 Share Posted October 12, 2010 Since it has been a while since we last looked at this, here are the latest figures available.... Date 2010-09-08 2010-09-15 2010-09-22 2010-09-29 2010-10-06 Value 1987.560 1981.602 1928.937 1949.490 1943.934 Anyone looking at adding some hedges at this point, I know I am considering it? cheers Zorro Nope, I would add an hedge if it dropped similarly as the last valley. I'm keeping my eye on this one. BeerBaron Link to comment Share on other sites More sharing options...
maxthetrade Posted October 15, 2010 Share Posted October 15, 2010 WSBASE is up sharply: http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=WSBASE&s[1][range]=1yr and M2 as well: http://research.stlouisfed.org/publications/usfd/page6.pdf Link to comment Share on other sites More sharing options...
beerbaron Posted October 15, 2010 Share Posted October 15, 2010 WSBASE is up sharply: http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=WSBASE&s[1][range]=1yr and M2 as well: http://research.stlouisfed.org/publications/usfd/page6.pdf Some what is the process exactly that the FED uses to increase the money supply. Is it only by buying/selling of treasuries, or is there other processes? BeerBaron Link to comment Share on other sites More sharing options...
twacowfca Posted October 15, 2010 Author Share Posted October 15, 2010 Here is the latest update of the composite WSBase/S&P500 graph as of October 13, 2010. The sharp drop 3 weeks ago caused a little concern, but the flattish trend over the past few months has now for the most part reasserted itself. Twacowfca Link to comment Share on other sites More sharing options...
twacowfca Posted November 13, 2010 Author Share Posted November 13, 2010 The monetary base continues to creep downward slowly with this Friday's update from the St. Louis Fed. We'll post an updated graph Monday. All the QE2 is showing up in M2 and not in the monetary base. It's the monetary base that has the most dramatic effect on securities markets. M2 inflation is more correlated with commodity inflation. The current situation isn't alarming, but prudence once again leads us to hedge our recent large gains. Friday morning we bought a substantial cover of SPY puts that were very attractively priced with implied volatility in the low to mid teens. :) Link to comment Share on other sites More sharing options...
twacowfca Posted November 16, 2010 Author Share Posted November 16, 2010 Here's the latest update of the composite WSBase/S&P500 graph as promised. S&P500 data is through last Friday. Twacowfca Link to comment Share on other sites More sharing options...
twacowfca Posted December 17, 2010 Author Share Posted December 17, 2010 Here's the latest. The rise in the WSBase for the last few weeks seems to coincide with the official start of QE2. It's logical to think this may continue. If so, this may be supportive of market advances in 2011. :) Link to comment Share on other sites More sharing options...
UhuruPeak Posted December 18, 2010 Share Posted December 18, 2010 thx twa Link to comment Share on other sites More sharing options...
beerbaron Posted December 31, 2010 Share Posted December 31, 2010 TWA, look at the updated Money Supply... it seems like QE2 is losing traction. BeerBaron Link to comment Share on other sites More sharing options...
twacowfca Posted January 3, 2011 Author Share Posted January 3, 2011 TWA, look at the updated Money Supply... it seems like QE2 is losing traction. BeerBaron Overseas now and out of touch. Will check it out when we return in a couple of days. FYIW the recent easing got a boost in May of last year from the earlier expansion of the monetary base as velocity eventually picked up, resulting in expansion of M2. This is not a negative in the short run, disregarding the potential for inflation after the slack in the economy is taken up. However, the correlation of the stock market with M2 is weaker than with WSBASE. What's happened to M2 the last two weeks? Link to comment Share on other sites More sharing options...
twacowfca Posted February 25, 2011 Author Share Posted February 25, 2011 The recent surge of the WSBase and the continued expansion of M2 is not bearish to say the least. http://i1109.photobucket.com/albums/h422/twacowfca/M220110225.jpg http://i1109.photobucket.com/albums/h422/twacowfca/WSBaseExcel0320110225.jpg Link to comment Share on other sites More sharing options...
beerbaron Posted March 12, 2011 Share Posted March 12, 2011 Anybody knows what's the reason for the recent huge increase of WSBase 360B in 3 months! . I tough QE2 was about to run dry... BeerBaron Link to comment Share on other sites More sharing options...
twacowfca Posted May 6, 2011 Author Share Posted May 6, 2011 Latest results for M2 and WSBase are not deflationary to put it mildly. http://i1109.photobucket.com/albums/h422/twacowfca/M220110506.jpg http://i1109.photobucket.com/albums/h422/twacowfca/WSBASE20110506.jpg Link to comment Share on other sites More sharing options...
goldfinger Posted May 6, 2011 Share Posted May 6, 2011 Does that mean we need to get ready for S&P at 1500 in the next 2 months ? >:( Link to comment Share on other sites More sharing options...
link01 Posted May 6, 2011 Share Posted May 6, 2011 wow, that chart is almost parabolic. maybe its just the compressed scale. i cant wait to see how the end of QE2 will affect the verticle angle of the M2 & WS base. or how the continued rabid printing of money in whatever form finally fuels the pile-on of our national debt to the point where its growth overshadows that of the monetary base & spooks sane people. Link to comment Share on other sites More sharing options...
twacowfca Posted May 6, 2011 Author Share Posted May 6, 2011 Does that mean we need to get ready for S&P at 1500 in the next 2 months ? >:( It's sobering to realize that the current market is being supported by the easiest credit ever since the Fed was created. When the pull back comes watch out! Until then, the Fed's philosophy seems to be: :D" Eat, drink and be merry, for tomorrow we may die." Link to comment Share on other sites More sharing options...
goldfinger Posted May 7, 2011 Share Posted May 7, 2011 When the pull back comes watch out! Is it at QE12234350689943? Link to comment Share on other sites More sharing options...
twacowfca Posted May 7, 2011 Author Share Posted May 7, 2011 When the pull back comes watch out! Is it at QE12234350689943? There are limits. At some point without restraint there will be inflation. Then, major inflation. Then, hyperinflation. However, history suggests that there is likely to be tight money in the US well before we reach major inflation. Link to comment Share on other sites More sharing options...
beerbaron Posted July 21, 2011 Share Posted July 21, 2011 How come the WSBase still climbs without QE2... BeerBaron Link to comment Share on other sites More sharing options...
Rabbitisrich Posted July 21, 2011 Share Posted July 21, 2011 Mostly excess reserves: http://65.89.18.138/fred2/graph/fredgraph.png?&id=WSBASE,EXCRESNS&scale=Left,Left&range=5yrs,1yr&cosd=2006-07-13,2010-06-01&coed=2011-07-13,2011-06-01&line_color=%230000ff,%23ff0000&link_values=false,false&line_style=Solid,Solid&mark_type=NONE,NONE&mw=4,4&lw=1,1&ost=-99999,-99999&oet=99999,99999&mma=0,0&fml=a,a&fq=Weekly%2C+Ending+Wednesday,Monthly&fam=avg,avg&fgst=lin,lin&transformation=lin,lin&vintage_data-ipsquote-timestamp=2011-07-20,2011-07-20&revision_data-ipsquote-timestamp=2011-07-20,2011-07-20 Link to comment Share on other sites More sharing options...
twacowfca Posted April 10, 2012 Author Share Posted April 10, 2012 The correlation between change in the monetary base (WSBASE) and the S&P 500 is still very high, but the change in WSBASE during the last several months no longer has lead the change in the S&P 500. Instead, the change in the S&P 500 has been leading the change in the WSBASE. This seems to make no sense. It's like saying that inflation causes an increase in the money supply. However, there is a perfectly good reason for this upside down behavior. The FED in the person of its chairman, Ben Bernanke, has been telegraphing in advance exactly what it's going to do in the near future, as with QE2, and more recently with 'twist' and the stated intention to try to keep interest rates ultra low for the next several months. Thus, Mr. Market in his wisdom of the crowd has been correctly anticipating what's going to happen with the application of the grease that lubricates his forward motion. See attached PDF for graph running from beginning of 2010 to the latest data received in April.WS_BASE_04.04.2012_condensed.pdf Link to comment Share on other sites More sharing options...
twacowfca Posted April 10, 2012 Author Share Posted April 10, 2012 The latest WSBASE data supports the idea that change in the S&P 500 is now associated with what the Fed says it is going to do. The latest Fed minutes indicate no QE3 on the horizon. Therefore, we bought OTM puts on the S&P 500 yesterday that happily are up over 40% today. :) Link to comment Share on other sites More sharing options...
Rabbitisrich Posted April 10, 2012 Share Posted April 10, 2012 The relationship might be exaggerated because of the difference in scale between WSBASE and S&P 500 moves. The expansion of the WSBASE absorbs equity moves. Link to comment Share on other sites More sharing options...
twacowfca Posted April 10, 2012 Author Share Posted April 10, 2012 The relationship might be exaggerated because of the difference in scale between WSBASE and S&P 500 moves. The expansion of the WSBASE absorbs equity moves. Yes, but that is pecular to the series since QE2 was announced. The earlier postings of graphs for these series show that change in WSBASE normally leads change in the S&P 500 when The Fed doesn't telegraph its moves in advance. Link to comment Share on other sites More sharing options...
twacowfca Posted April 10, 2012 Author Share Posted April 10, 2012 When the pull back comes watch out! Is it at QE12234350689943? There are limits. At some point without restraint there will be inflation. Then, major inflation. Then, hyperinflation. However, history suggests that there is likely to be tight money in the US well before we reach major inflation. I'm going to have to eat my words. Everyday purchases price inflation is already here in North America. The American Institute for Economic Research (AIER) reports that prices paid for everyday items such as food, paper products and similar things that we buy everyday such as gasoline rose 8% in 2011 as measured by their Everyday Price Index. Link to comment Share on other sites More sharing options...
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