Black Swan

Tyler Durden's picture

Calling 'BS' On Projections Of A Decade of $20 Oil





The ability of oil exporters to trigger a short-term collapse in price does not automatically translate into an ability to control the financial conflagration such a crash ignites.

 
Tyler Durden's picture

Maybe Oil Goes to $70 on its Way to $40





When the conventional media ordains oil inevitably dropping to $40/barrel, we start looking for something else to happen - like oil going to $70/barrel. There are number of reasons this isn't as farfetched as it might seem at the moment.

 
Tyler Durden's picture

2014 Year In Review (Part 2): Will 2015 Be The Year It All Comes Tumbling Down?





Despite the authorities' best efforts to keep everything orderly, we know how this global Game of Geopolitical Tetris ends: "Players lose a typical game of Tetris when they can no longer keep up with the increasing speed, and the Tetriminos stack up to the top of the playing field. This is commonly referred to as topping out."

"I’m tired of being outraged!"

 
Tyler Durden's picture

Mario Draghi: Goodbye ECB, Hello Italian Presidency?





While the entire financial world is hanging on to every Mario Draghi word in hope Europe finally improves the market's (if not the economy's) "fundamentals" to new record highs, and joins the rest of the "developed" world's central banks in injecting trillions of liquidity into the Div/0 P/E stocks "whatever it takes" (because in a world where only multiple expansion is left, the ECB is the last wildcard at least until the US is dragged right back into the global recession and the Fed admits any pipe dreams of a rate hike in 2015 were just that), something far more different may be taking place behind the scenes. According to at least one journalist, the Fiscal Times' Patrick Smith, "Draghi appears set to leave Frankfurt and return to his native Italy the first chance he gets."

 
Tyler Durden's picture

The Financialized-Oil Dominoes Are Toppling





Oil is not just something that is refined into fuel--it is capital, collateral, debt and risk. In other words, it is intrinsically financial. Simply put, the sharp drop in oil revenues has knocked over a line of financial dominoes whose end is not yet in sight.

 
Tyler Durden's picture

"When The Market Moves Fast, Stuff Blows Up"





One of our old rules of trading is that whenever a major asset class, index, or other benchmark has a sudden, rapid move in price, something blows up. Sky high. That’s because people get used to regimes. They get used to a certain state of affairs with a lack of volatility. They become complacent. Maybe they stop hedging. Maybe they allow themselves to have unbounded downside risk. Maybe they start gambling. So what's going to blow up?

 
Tyler Durden's picture

Betting On The 'Other' Oil Black Swan





With oil prices plunging to 5-year lows, perhaps it is time to consider the cheapness of betting on the other oil black swan...

 
Tyler Durden's picture

The Oil-Drenched Black Swan, Part 4: The Head-Fake Disruption Ahead





The price drop is a head-fake: it doesn't usher in a new era of permanently cheap oil. Rather, it unleashes dynamics that impair supply on multiple levels: geophysical, geopolitical, demographic and financial.

 
Tyler Durden's picture

The Oil-Drenched Black Swan, Part 3: Multiple Risks, Multiple Unknowns





The Power of Black Swans lie in the unanticipated consequences of the unknown unknowns. Some of the consequences of lower oil prices are known, but some are unknown. It is these unforeseeable and uncontrollable consequences that are poised to wreak havoc on the global financial system. Here's the thing about risk: it bursts out of whatever is deemed "safe."
 
Bruce Krasting's picture

Closing in on One Twenty





Is this weakened system able to absorb a spike in one-directional volume? Will it step up and keep order? Or will it back off and allow volatility to roar?

 
Tyler Durden's picture

The Oil-Drenched Black Swan, Part 2: The Financialization of Oil





All the analysts chortling over the "equivalent of a tax break" for consumers are about to be buried by an avalanche of defaults and crushing losses as the chickens of financializing oil come home to roost.

 
williambanzai7's picture

BLaCK SWaN CRuDe...





Have a fractal trading day...

 
Tyler Durden's picture

The Oil-Drenched Black Swan, Part 1





"Every sustained action has more than one consequence. Some consequences will appear positive for a time before revealing their destructive nature. Some will be foreseeable, some will not. Some will be controllable, some will not. Those that are unforeseen and uncontrollable will trigger waves of other unforeseen and uncontrollable consequences."
 
Tyler Durden's picture

Irrational Exuberance – Descriptive Superlatives Exhaustion Point Is Reached





In some respects we’re in danger of running out of appropriate descriptive superlatives for the current bout of “irrational exuberance” (we’re open for suggestions). The current asset bubble is in many respects reminiscent of the late 1990s tech bubble, but it also differs from it in a number of ways. One of the major differences is that the exuberance recorded in the data is largely confined to professional investors, while the broader public is still licking its wounds from the demise of the previous two asset bubbles and remains largely disengaged (although this has actually changed a bit this year). Monetary pumping merely redistributes existing real wealth (no additional wealth can be created by money printing) and falsifies economic calculation. This in turn distorts the economy’s production structure and leads to capital consumption, thus the foundation of real wealth that allows the policy to seemingly “work” is consistently undermined. At some point, the economy’s pool of real funding will be in grave trouble (in fact, there are a number of signs that this is already the case). Widespread recognition of such a development can lead to the demise of an asset bubble as well.

 
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