| To: Real Man who wrote (23046) | 8/4/2024 9:12:38 AM | | From: Rarebird | | | | I sold slightly more than half my portfolio on Friday so that should tell you something.
I am now in 25% pure equities and 75% pure income related equities, TLT and other higher yield bond alternatives. The later held up very well over the past two days except for the BBB, BB and B related corporates. I dumped the later except for BKLN, which I have held for well over a year and which has performed very well for me. HYG, which I don't own, was down .33%
Things may get a lot uglier. I really don't know. Maybe the major indices go down more than the average stock..
I plan on initiating some short positions early next week. |
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| To: Rarebird who wrote (23031) | 8/4/2024 1:33:15 PM | | From: edward miller | | | | Could be a stale message. Thinking of how we were at virtually zero rates not that long ago.
The only way I can make sense of that message is if Schwab combined the risks for all Treasury issues, regardless of maturity. Seems stupid to me, but what else makes sense? The only risk in 6 month bills is inflation eating the value of money, and that is not much. Better than market risk right now.
Disclosure: I am >80% T-Bills. |
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| From: Rarebird | 8/4/2024 5:59:31 PM | | | | | | Recent sell off is all about the reverse carry trade in regard to the Japanese Yen.
By lowering rates, the Fed will make the short squeeze in the Yen worse as interest rate differentials narrow.
That would spark more leveraged selling by borrowers of what was formerly cheap Yen in risk-on assets. |
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| From: Rarebird | 8/5/2024 2:49:46 AM | | | | | | Reverse carry trade is gaining lots of steam tonight. If this continues, there will be a global margin call and a massive credit event.
To think that on Wednesday, the A/D line hit a new all time high.
All of a sudden this happened with talk of a rate cut.
I sold slightly more than half my portfolio on Friday.
Maybe I should have sold everything. But I did derisk my portfolio tremendously. A lot depends on how AAA and AA corporate debt performs tomorrow. |
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| To: Real Man who wrote (23055) | 8/5/2024 8:57:22 AM | | From: Rarebird | | | | | I sure hope Powell isn't stupid enough to do an emergency rate cut today. It will make things worse and I put in a couple of big orders for T-Bills yesterday. |
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