If one had simply held a 50/50 portfolio of VXX/XIV (without rebalancing) for the several years shown -that is prior to the August crash- then their returns would have been >150%. And instead if one were long VXX and short XIV in just the past six months (mostly due to the August tumult but even including the subsequent temporary rally as well), their returns would be >450%.
"We believe the epicenter of the problem is the Chinese banking system and its coming losses. Once analysts, politicians, and investors alike realize the sheer size of the impending losses and how they compare to the current levels of reserves, all focus will swing to the banking system."
"No one is trading unless they have to or have microwave circuits for brains.... the system’s foundation rests on a presumption of their expertise. It’s what allows the leaps of faith necessary for financial transmission functions to work. Grand experiments, like the insanity of negative rates, are seen merely as the latest in making it up as you go along."
The head of one of the biggest high-frequency trading companies has warned that there are several faultlines in the structure of increasingly electronic, automated financial markets that could lead to a “catastrophe” in the long run. "We’re creeping in the right direction, but unless we proactively address these issues, sometime in the next several decades we are going to experience a catastrophe due to runaway computerised trading,” Tower Research's Mark Gorton said.
Abandon all hope for China's equity markets ye who enter here...
"I don't think China's economic slowdown is that severe to threaten the global economy."
"China has managed debt restructurings superbly."
One thing policy makers should have learned after watching Greece unravel last summer is that capital controls almost always backfire. Once the market (not to mention the populace) senses panic, it's all downhill from there and make no mistake, there's blood in the water here.
"While Iran claims its top foreign policy priority is friendship, its behavior shows the opposite is true. Iran is the single-most-belligerent-actor in the region, and its actions display both a commitment to regional hegemony and a deeply held view that conciliatory gestures signal weakness either on Iran’s part or on the part of its adversaries. Saudi Arabia will not allow Iran to undermine our security or the security of our allies. We will push back against attempts to do so."
Independence Is A "Poison Hallucination As Useless As Looking For Fish In A Tree," China Warns Taiwan, After VoteSubmitted by Tyler Durden on 01/17/2016 10:16 -0500
“Tsai should keep in mind that if she revisits Chen’s dangerous path to cross the red line of cross-Straits relations, she will meet a dead end. If the DPP abandons the progress made by its predecessor in the past eight years, it will jeopardize its future as a ruling party. The lesson of Chen Shui-bian should be a long-lasting lesson."
The consequences of all this will be felt all over the world, and for a long time to come. All of our economic systems run on oil, so many jobs are related to it, so many ‘fields’ in the economy, and no, things won’t get easier when oil is at $20 or $10, it’ll be a disaster of biblical proportions, like a swarm of locusts that leaves precious little behind. Squeeze oil and you squeeze the entire economic system. That’s what all the ‘low oil prices are great for the economy’ analysts missed (many still do). Entire nations will undergo drastic changes in leadership and prosperity.
“Following technical and operational investigations and in interaction with relevant political and national security bodies of the country and after it became clear that the US combat vessels’ illegal entry into the Islamic Republic of Iran’s waters was the result of an unpurpuseful [sic] action and a mistake and after they extended an apology, the decision was made to release them."
As the towering forces that are prevailing against failing global economic architecture and the pit of debt beneath that structure, as laid out below, it is clear that the 'Epocalypse' - encompassing the roots "economic, epoch, collapse" and "apocalypse" - is here, and it is everywhere. The Great Collapse has already begun. What follows are the megatrends that will increasingly gang up in the first part of 2016 to stomp the deeply flawed global economy down into its own hole of debt.
“Future Economic Historians” Will Probably Call the Period That Began In 2007 “the L-O-N-G-E-S-T DEPRESSION”Submitted by George Washington on 01/11/2016 16:18 -0500
The Real Economy Is Depressed-er
“Are they really going to create their own tax authority and other state structures? Ignore the rhetoric and declarations, follow the actions.”
"The burn rate has been worrying. It’s not about how long it gets to zero, its about how long it gets to about 2, which is what they need."