Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

All You Need to Know About Inflation and the Fed

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From yesterday's FOMC release:

"The recent increases in the prices of energy and other commodities are currently putting upward pressure on inflation."

This is the root of the entire game.  People who really believe that rising prices cause inflation must continually be off sides in this game because they do not even get out of the gate on the right foot.  Dis info like this is why I am always harping upon the MSM and the financial services industry in general, which seem to rest securely in the status quo and the ignorance of the masses.


Will This Time Be Different? (By Trade Flight Plan)

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(Note from Tim: this was posted last night; my frantics posts today kept some content at bay, so please take the time of posting into account.)

Our thoughts and prayers go out to the victims of the unimaginable tragedies in Japan.

In 1989, Michael Lewis (author of The Big Short) wrote an article titled "How a Tokyo Earthquake Could Devastate Wall Street." This piece eventually appeared with a collection of other articles in one of Lewis' books, The Money Culture. In the article, Lewis describes the potential implications to Wall Street when Japan, one of the largest holders of US equities, liquidates its foreign holdings to pay for the rebuilding of Tokyo after an earthquake.

Will this time be different? We have no idea.

Judging based on the remarkable price action of the Yen the past 48 hours, and observing the large ES selloff last night, only to persistently grind higher on anemic market breadth during the entire NY session today, we can surmise the leaders of the world's economies are working around the clock to either coordinate or contain their responses.

Foreign Holdings
Just for kicks, we took a fresh look at the latest Foreign Holdings of US Securities, courtesy of the US Treasury. We then dropped the numbers into a spreadsheet and resorted in descending order according to Foreign Equity Holders. You can see the top 25 results below (not NCAA rankings).

How Will Rebuilding Efforts Be Funded?
Does this imply Japan will selloff US holdings to fund its rebuilding efforts? We have no idea. We can never know whether this time the global economies are better coordinated to respond to a tragedy like this, or whether a QE3+ will now go to prevent foreign liquidation of US equities, or whether a different impact will ensue altogether.

Will They Sell Dollars/Treasuries/Stocks/Commodities/Currencies?
Whatever the reasons, we find it interesting that in spite of the big selloffs and volatility in ES, Gold, Oil,and others the past 48 hours, the Yen is flirting with record highs and the Euro keeps retesting 1.4000s in an interesting wedge pattern.