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Equities Go Full Retard As Rates Run For Cover
To see the prevailing schizophrenia gripping the two different sets of mindsets in the market right now, look no further than than the surging divergence between equity vol and implied correlation (VIX, JCJ) and credit vol (via swaptions: USSV011). The chart below shows that even as equity traders are going full retard into QE2, and expecting the Fed's Brian Sack to expense their purchases of such staples as hookers, booze and heroin next, rate guys are running for cove (guess what, the fact that going forward Americans will not pay mortgages again, likely for many months if not years, is not good news).
And an even more stunning demonstration of the full retardation of our once proud equity trader class, is the record surge in implied correlation between Jan 2011 and Jan 2012. Translation: the world is fine through the New Year, then it is all going to hell.
H/t Tim Backshall of Credit Derivatives Research
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There is no tough decision on QE2. As long as the market keeps going up, they will just string people along with this 'maybe' and 'we'll see' talk forever. Why do anything now? Nothing to gain. It would be like a jockey going to the whip with a mile still to run. They're going to wait as long as they can.
Chart: ES
Look, Ben. A Butterfly!
http://99ercharts.blogspot.com/2010/10/es_1353.html
It's pronounced ruh-tard.
Harry you have that flag by your name as if you are patriotic. Yet and the other play along PM are witnessing the wholesale destruction of out currency and the FED sopping up our debt like a bump on spilled soup. You think there will be no ramifications of this so far never the stupidity of added another trillion to the $800B already bought?
And as far as QE2 the end game is the elections if you fools ramped stocks already what do they care after 11/2. As a result it wont happen and then el tanko. That way its the GOP's fault again no?
WTF was that fning move today? The $$ got slaughtered as did the 2s10s yield and the equities traded up as if it was a net 100k job gain!!!
As a trader, I can understand positioning myself and making an erroneous bet that the econ data will go against me. That is a risk that you can take. But, to take the time and effort to plan a trade 9-10 months out and have the data validate your trading theories and for the market to go the opposite way if fning infuriating...
I was mostly cash since this sh$t starting last Sept and I had just managed to get myself back in to a series of trades and the market gets biplor and disjointed.
I am going back to cash until the 2s cross the SPX on the yearly chart. Somebody is going to be wrong and I am sick of it costing me Alpha.
To repeat: "Never underestimate the replacement power of equities within an inflationary spiral." (Think Zimbabwe...)
Can someone explain the following:
"And an even more stunning demonstration of the full retardation of our once proud equity trader class, is the record surge in implied correlation between Jan 2011 and Jan 2012. Translation: the world is fine through the New Year, then it is all going to hell."
why waste all your braincells on alpha this and beta that
Just buy gold and wait. Teh elmer fudds will show up sometime? Fuckin simple, why algo this shit - buy the physical and drink beer.
Let's see since 1999 I'm up about 600% in nominal terms but traded teh technicals and are up only about 4000% + I parked a shitload of physical in the back yard. It's all rigged why fuck around trying to beat the matrix?
Elmer fudds will make your retirement not trading vapourware
note to self: add mogul rider to list of zh'rs with pm's buried in backyard.
cc. black ops buddies
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