Risk sees a very black friday

Original piece here.

20101126

Comments

[Careless Whisper]

thanks for the post. very interesting, but even at full screen mode, i can't see the charts, and you know how i am about charts.

i think the two best trades on the board are ek long, and db short. i recently shorted dis against 37, stop at 38. if i'm correct i'll cover at 34. chart looks top heavy plus airport kiddie molestations are not good for the magic kingdom.

[Jasper M]

I am surprised that the Catholic Church has not filed some sort of trademark infringement case against TSA, for molesting kids on an industrial scale. Or maybe, they licensed that intellectual property . . . ? 

[El Hosel]

  " Risk sees "... There is no risk in the markets anymore.  Hell, there is no "market" in the markets for that matter. All Robo trade and FED pumping all the time, it will all crash and burn one of these days and the new "catch phrase" will be Volatility. Lately volatility has been snuffed out by the Robos. When the fuck is the world going to wake up to all this crap?

[sandorgb]

The world is waking up. Prices are a function not only of underlying commodity supply and demand, but the supply and demand for the monetary unit underlying the price. There is a battle going on between the forces of inflation and deflation. As such, risk assets may appear to be overpriced as they were in 2000 and 2007, and may continue to remain overpriced relative to underlying risk, strictly due to credit-money/interest rate manipulation and the short-term "race to the top." 

One must observe not only spot market prices, but also watch the futures exchanges to appreciate the market's expectations of future risks. A final thought: the modern financial system inherently misprices risk and persists in mispricing risk because it is based on fraud, counterparty deception, self deception, and is incentivized by moral hazards which artificially reward the selling of risk premia without reflecting its true costs (eg. AIG, Lehman, MBS, CDS etc). This is why traders such as Taleb employ the strategy of buying long-dated options which are artificially cheap. This market structure is inefficient and will continue to misallocate resources and even artifically increase risk so as to become destructive towards the underlying economy which supports it. 

It is very difficult for persons in privileged positions to voluntarily give up their privileges. Unless and until the workers unite against the financial-insurance-bankster parasite, we will have gross distortions in the market that lead to sub-optimal outcomes.

[duo]

Market distortions are caused by financial instruments.

Financial instruments are fancy names for fraud (which might be said for finance in general).  The schemes are:

1.  Mispricing of risk:  Easy, just lie.  Sell a risky loan for the price of a solid one, and disappear when things turn bad. 

2.  Selling something you don't own:  Naked shorting, JPM and silver, etc.  I guess this could spread to robo-forclosed homes.

3.  Selling the same thing to more than one person:  MBS, anyone?

4.  Insurance fraud: insuring your neighbor's house and then setting it on fire.   Companies were destroyed so the IBs can collect on CDS.

5.  Paying off cops/judges to look the other way:  self explainatory.

$100K worth of business school will teach you fancy ways of doing he above.

[revenue_anticip...]

"refudiated"

http://www.bloomberg.com/news/2010-06-29/banks-financing-mexico-s-drug-cartels-admitted-in-wells-fargo-s-u-s-deal.html

[greenewave]

We are about to embark on World War 3 and its starts with N. Korea. Please watch the video “Brink of War, Mission Accomplished at (http://www.youtube.com/watch?v=ZvVDt-sPQ8w).

Anonymous-

The more we can distract you from the truth and from the Great Depression II in this Country, the better!!

[Saxxon]

Wow, anyone short this weekend, you will be in a world of hurt come Monday.  That Korean thing will not even be a channel-changer for Joe Sixpack and he is going shopping regardless.  Ireland will get bailed out.

Joe cannot find either on a map; and does not care.

I'm looking for a 280-point up day on the DOW.

[optimator]

I agree on the 280-point on the DOW, but not on the "Up" part. 

[MrSteve]

Here on the south side, we prefer to spell it Joe Sixpaque, you know, sophisticated an' all.

[RockyRacoon]

I'm just along for the ride.  I really don't envy anyone having to make a living in the current market environment.  Imagine a plumber who never knew if that 4 inch pipe running just above his face, full of shit and used condoms, was sound or not.  It leaks and bulges, and creaks and moans but he keeps on working.  Suicide mission.

[honestann]

What an excellent analogy!

Add to that image, billions of tiny taxpayers in chains trying to wrap their paws around the pipe to keep it from exploding, even as the pipe gradually corrodes and crumbles in their paws.

That's pretty much an accurate picture.

[Jasper M]

Nice bit of writing, congrats. 

[Navigator]

Did this guy say anything?  I glanced at it, saw that he hasn't heard about paragraphs yet, and forgot about it.

Anyone not bright enough to paragraph their writing isn't bright enough to write financial blogs...at least not financial blogs worth reading.

[cbxer55]

I see paragraphs. BIG PARAGRAPHS.

Give it a rest, Sherlock.

[naufalsanaullah]

give it a read and get back to me bud

[Cone of Uncertainty]

Hey Clark, shitters full.