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The Fed goes hat in hand to foreign central banks to buy US stocks and sell US treasuries to them. Done in 2013.
The Fed tells Japan to buy US stocks. BOJ isn't allowed to buy foreign stocks. Their government gets around it by directing the government pension funds to sell JGBs and buy foreign stocks. Done in 2014.
They also set up a special program for foreign central banks to trade US equity index futures in 2013.
In addition, there are direct knock-on effects from QE. Buying more than the supply forces up the price and pushes investors into assets other than bonds. Bidding up bonds triggers asset reallocation into equities through rebalancing. Holding down yields on corporate bonds and keeping ZIRP in effect allows companies to finance buybacks.
These are not regulations, it's their charters. The Fed didn't go to other central banks to buy US stocks. They DID sell treasuries that were on their balance sheets, because the demand for them was outpacing what was available in the market place.
Foreign central banks trade currency & interest rate futures, NOT equity index options to hedge their currency risk. Do some portions of the governments trade equity futures, sure that is the best way to hedge also. Same as the U.S. does, as well as EVERY U.S. State. Zero Hedge & Forbes opinion articles aside, which NEVER show any proof, central banks DO NOT buy securities to influence open market committee policy. That is not how the circular flow of money works.
Incredible claims require incredible evidence. If we're going to state some anodyne and unoriginal thing, such as that markets gyrate but ultimately rise by some typical (call it 7%?) rate - well, there's not much need to be rigorous about sources etc. But if we're going to claim that Americans will cease eating apples or pears, and instead will switch to persimmons and pomegranates, and that therefore we should invest in companies that sell persimmons and pomegranates, well, that's going to require some thoroughness of documentation, to maintain credibility. If it further turns out, that a person recommends this or that, and yet him/herself refrains from following this recommendation, then there's naturally going to be a feeling of skepticism and incredulity.
For those of us who have been around for a while, there's come to be an ingrained feeling and intuition, that trends are either too small to merit bothering with them, or they come and go too sharply for most of us to be able to deftly react. Thus a passive, bovine indifference is often the best strategy. This doesn't mean that persons advocating an active approach are stupid or ill-informed; but rather, that their knowledge - even if correct - is typically impractical.
As concerns specifically Chinese bonds, well, maybe that's a fine thing for occasional speculation. But regardless of their rating, for an American-based investor, there's so much opacity and uncertainty, that such an "investment" would be more of a gamble, than and investment - and certainly not the backbone of the low-risk portion of one's portfolio.
You know what, I agree.
In fact, I would even ask the mod to delete all my references about Chinese bonds because I don't want to give out unsolicited investment advice. Also, I think China could be threatening to the US depending capital inflows and outflows. The way the financial market seems to be structured is that it chases prices before fundamentals. Price is what ultimately sells. Bubbles are natural outcome of this behavior because at some point, they become detached from fundamentals, but in the process, our idea of fundamentals often becomes skewed. I didn't really explain my position in gold fully. I think there is a good a technical case based on other people's work who are probably both smarter and more successful than me. I also think there is a solid fundamental case; however, this too is also unsolicited investment advice. I would appreciate if mods deleted this as well. If you know how to contact them, let them know. I don't want to be responsible for anybody that might be influenced.
i just like credibility when someone is telling us to buy Chinese bonds , the stock markets are collapsing and gold is the way to go . i think if someone gives investment advice that goes against the grain they need to demonstrate skin in the game before telling others what to do , as well as a respectable track record with the forecasting . nothing personal but i think most here will not take your posts seriously without that .
I don’t think most take him seriously. Between the rants and the childish reaction it’s more of a drama show than anything else
Are you 12? I didn't bother to review the entire mess and how it started, just saw your very clear escalation. And sorry, Chinese bonds is a pretty unusual recommendation. You should be prepared for others who do not agree and not get so upset when someone disagrees with your idea.
I apologize for my behavior. I wouldn't have resorted to those tactics in real life, so I don't think it's necessary online either. I didn't mean what I said, and I did think about it, and felt bad. I actually think mathjak is a good poster but he really does seem to have it out for me sometimes, but I do respect him.
In fact, I would even ask the mod to delete all my references about Chinese bonds because I don't want to give out unsolicited investment advice. Also, I think China could be threatening to the US depending capital inflows and outflows. The way the financial market seems to be structured is that it chases prices before fundamentals. Price is what ultimately sells. Bubbles are natural outcome of this behavior because at some point, they become detached from fundamentals, but in the process, our idea of fundamentals often becomes skewed. I didn't really explain my position in gold fully. I think there is a good a technical case based on other people's work who are probably both smarter and more successful than me. I also think there is a solid fundamental case; however, this too is also unsolicited investment advice. I would appreciate if mods deleted this as well. If you know how to contact them, let them know. I don't want to be responsible for anybody that might be influenced.
see , now you are understanding where i am coming from . it certainly is not a case of anyone out for you .
it is just that you were telling people to act and do unorthodox things while you yourself have not documented the stuff you come up with even worked in the past .
i get e-mails all the time from c-d posters about what they should do and everyone gets the same answer .i never give advice as to what anyone should do . on the forums i speak in terms of what i would do or have done .
most of these unorthodox things are speculating and not investing . it is very important to understand the differences between speculating vs investing and risk vs volatility .
Last edited by mathjak107; 02-02-2018 at 02:38 AM..
i agree , it is rare . but i think it will make him a better poster , even if i don't share his doom and gloom or swinging for the fences concept of growing money with untested unorthodox investments ...
expressing views in the economic forum is what it is for . no harm no foul if your view turns out to be flat out wrong .
but when you couple those views with investment advice in the investing forum you are opening up another door and people here want to see facts and documentation if you want them to do something unorthodox .
especially when you are known as being a glass half empty poster and doom and gloom is always in your cards . if you are a doom and gloomer it is unlikely you are in the investing forum to invest, unless you are selling short or promoting disaster hedges . it is generally to spread their word of impending doom and not to learn about investing in stocks ,bonds ,reits ,etc because why would they ?. .
they also tend not to understand fully about investing since odds are they have little experience themselves because of negativity . markets are driven by fear ,greed and perception of earnings as any experienced investor can tell you . all the economic data , indicators and charts are only used to do one thing .
they are used so investors can estimate earnings perception . meeting earnings expectations in profit and revenue is what investing is all about just like you buying any company .
have you ever seen buffet put up charts of fed actions or show a moving average of markets and say he was selling out ? of course not . because at the end of the day you are buying shares in a business .
Last edited by mathjak107; 02-02-2018 at 05:24 AM..
The markets are down just over 1%. Why the hysteria? Will there be a significant pull back, sure at some point it has to. If you're risk tolerances (not you specifically but in general) are to bail on a 1-2% move of an index(s), you should be swing trading, not investing.
For me, all my accounts are protected with positions. My investment accounts have a 5% "window" & my trading accounts are position specific with options in the 2%-8% range.
i always use a 5% trailing stop loss on my fun trading . got stopped out of gbtc the other day in a matter of hours lol .
but with my serious money i move money between my comfort range . when i see more value out there i go 50% equities , when i see less value i move to 40% equities . been 40% for a few weeks now .
if my growth and income model falls below my income model by enough dollars i will start to move back in to the growth and income model again bringing it up towards 50% .
in either case up or down the 40% equities is a number i can live with forever and it produces lots of daily action . but i certainly will take advantage of anything extra i may be able to pick up if we slide enough .
i just have to give some thought to how many dollars spread i want before i start to reverse .
is it market timing ? i guess you can call it that but it is more my comfort range and even if i thought markets were going to the moon i would not increase beyond my range nor even if i thought a crash was in the cards go less . .
Well the roulette wheel or maybe crapshoot of the market looks like it will open down again today, where it will be at the close for a Friday will be interesting to see. https://www.cnbc.com/
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see , now you are understanding where i am coming from . it certainly is not a case of anyone out for you .
looks like it will open down again today, where it will be at the close for a Friday will be interesting to see. 
