Nomura's Sceptical Strategist On Why Correlation Risk Is Rising And What It Means For Inflation

Tyler Durden's picture

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FOC 1183's picture

intraday correlations have, if anything, increased.  and clearly bob has revrtd to abbrvtns snce they wil not evn let hm wrte anymre

RobotTrader's picture

Markets are still 100% correlated.

Some mining stocks were up 3% this morning and as soon as panic buying in USDX emerged out of nowhere (The Fed, obviously was buying), the 3% gain in the mining stocks was erased within seconds.

Uncle Gorilla is determined to make sure as many "anti-dollar" hedge funds are obliterated before June 30.


centerline's picture

When the correlations end, it will be the pension funds that take it in the rear.  Those demanding... requiring yield... have been chased into risk assets and leverage.  They have been rounded-up and will be clubbed like baby seals.  That's probably the moment the States will finally roll over.  Until then, party on!

Smiddywesson's picture

"Who are you who are so wise in the ways of science?" - Monty Python and the Holy Grail

I'm on board with that 100%  Hedge funds and fund managers in general who live and die by leveraging what worked recently are going to be slaughtered when the manipulators change their game.

machineh's picture

EM = Emerging Markets

Not clear in the front-page excerpt, due to lack of context.

PulauHantu29's picture

But wait just a second fellow, The Bernank just said,"I am 100% confident I have 100% control of 100% of the inflation problem if it arises."

So The Bernank does not see The Inflation as a problem. He is "100% sure" of it.


unununium's picture

He can control it by raising rates in 15 minutes.

Ergo, 15 minutes is an "extended period".

RobotTrader's picture

The Hubris at the Fed must be near world record levels.

They are confident that inflation has been whipped, and currency-induced cost push hyperinflation will be stopped dead in its tracks with instantaneous margin hikes across the board.

Dr. Engali's picture

Margin hikes will only slow the pace temporarily. The money will still flow into commodities. They may win small battles but they will still lose the war. 

DosZap's picture

No they won't lose, then comes the "C" edict.

EO, or a PDD.

Turn it in, or else.

See the objective is to make everyone, a Felon.

No rights battles to fight then.

SoNH80's picture

I'll get out the champagne when my grocery bill stops increasing month after month.

TooBearish's picture

Tyler pretty impressive volume in TYM and FVM today

is Pimco capitulating?

Commander Cody's picture

They were looking for a better entry point.

RobotTrader's picture

1.2 million block trade just went through on UUP, which just punched to new highs for the move.

XRT is still unfazed, only down about 18 cents.

NOTW777's picture

watch 1.4123 on euro

citrine's picture

The active contract crossed the 1.4079 Pivot point and bounced back.

dbradsha's picture

Only correlation I see is NFLX, CMG and OPEN. All up, always up. I have visions of all the unemployed booking their Mexican restaurant through Opentable and going home to watch an online movie. As the unemployed grow so do these 3.

SoNH80's picture

This article is fucking gibberish.  Worth posting, to show how "analysis" pumped out by the I-Banks is a bunch of sophistry, using tricked-out jargon to confuse the client.  Trust an investment banker to use 50,000 words when a few will do.  The U.S. has failed to keep its fiscal house in order.  It is printing money to cover a large part of its deficits, and for "mad money" to give to politically favored recipients.  Inflation results. Meantime, the U.S. consumer is overloaded with debt, and faces a bad employment picture.  This is a drag on growth. Using official inflation statistics is a fool's errand.  There, points made, without migrane-inducing run-on sentences.

unununium's picture

+ unit identity singularity


purplefrog's picture

Thanks, I thought it was me.

Smiddywesson's picture

I thought it was me too.  Only proves, we are all programed and need to question the Matrix on a regular basis


I think this article fell far below the usual ZH quality.  

The Axe's picture

Robo is correct about UUP.huge buys..big...feels like NY FED

Boston's picture

"In short, we believe that risk assets do not offer good risk reward characteristics now, whereas quality government bond markets do at least cyclically."


J. Gundlach: 3

Bill Gross: 0


Quinvarius's picture

Which means any currency induced moves should be faded in PMs and stocks because everyone now thinks they matter.

oogs66's picture

perfect, eur, oil, es all moving lockstep today

bbq on whitehouse lawn's picture

I would add that this summer EM will start to raise interest rates but not enough to slow inflation in those countries.

The dollar will strengthen while gold holds its price level or strenghens right along with the dollar.

Only question is degree. Inflation will come on strong in the EM, BRIC and almost everywhere outside the US. Even China may find its currency weakening.

Most of the gold buying happens outside the US so even if the dollar rallies its unlikely to effect the price of gold, as demand increases.

Some EM players will likely welcome their weaker currency to help with exports but they forget commodites will not drop as expected.

Thats my take. We will see.

DosZap's picture

Martin Armstrong see's a $1,279.00+/- re-trace.

ZOZO Smith's picture

Nice interactive map about food deserts in the US

Ted K's picture

I like this type of post very very much.  This is what makes ZeroHedge worthy to me.  I know the "let's all pee in our trousers Keynesianism is here" gets more vacuous comments (mainly because 90% of ZH idiot commenters haven't yet figured out what Tyler calls "Keynesianism" is really Greenspanism) But this type stuff from Janjuah and Gaynor is real analysis for those who don't masturbate daily to Hayek and those who push panic city button to stimulate gold sales.

SoNH80's picture

If you consider this to be "real analysis", I don't want you to manage my money.