Debt Ceiling

Primary Dealer Bid Surges In Poor 2Y Auction

While the high yield of the just priced 2Y auction came "on the screws" at 1.345%, below last month's 1.401%, but above the six previous auction average of 1.305%. and exactly where the When Issued suggested today's auction of $26 billion in 2Y notes would price, the internals were decidedly weaker than the stop out would suggest.

Volatility Makes A Comeback

"The strategy of selling volatility has been so profitable that promoters tout it to investors as a source of 'steady, low-risk income'... Nothing could be further from the truth..."

It's Can-Kicking Time Again In The Imperial City

"So we’ve officially entered the kick-the-can season. You can count on Paul Ryan to spin and misdirect in order to obfuscate what’s actually going on. The House Speaker is about to capitulate again to the nation’s fiscal doomsday machine. Expect clever maneuvers designed to hide the truth through yet another election cycle."

A Brief History Of Tail Risk: From LTCM, ABX, CDS, To VIX

"While I think valuations may be stretched, my bigger concern is that the real risk lies in market structure – more specifically to volatility and correlation strategies that quickly propagate through the financial markets with the aid of algorithmic trading..."

Weekend Reading: Storm Warning

"... while mainstream analysts continue to point to the “number of companies beating estimates,” can I just remind you that it took estimates being DRAMATICALLY lowered in order to achieve that goal. In fact, for the end of 2017 estimates are more than $10 LOWER than where they began. After all, we live in a society where “everyone gets a trophy”, right?"

Calling Mitch McConnell's Debt Ceiling Bluff

"In a game of poker, the wise thing for McConnell to do is fold his hand, pick up his chips, and walk away from the table. But his job is not a game, and the stakes are far too high to just get up and walk away. Thus, he's left with one option. He must bluff. He must convince stock market investors that the debt ceiling vote will be a piece of cake."

"Controlled Demolition" Or Carnage?

"'Money' nowadays is a byproduct of wishful analytics and computer legerdemain seasoned with generous measures of fraud and larceny. This is a big problem when everything is measured in money and it becomes quite impossible to state with assurance what the value of money actually is. Obviously, you end up not knowing the value of anything...That’s the perilous situation the world faces."