Institutional Investors

Frontrunning: November 6

  • Dollar at three-month high as payrolls paralysis sets in (Reuters)
  • 5 Things to Watch in the October Jobs Report (WSJ)
  • China to Lift Ban on IPOs (WSJ)
  • ArcelorMittal Is Latest Victim of China's Steel-Export Glut (BBG)
  • 'Hope to see you again': China warship to U.S. destroyer after South China Sea patrol (Reuters)
  • Giants Tighten Grip on Internet Economy (WSJ)
  • Questions Surround Valeant CEO Pearson (WSJ)

Frontrunning: October 21

  • Global Stock Markets Edge Higher Though Global Growth Concerns Weigh (WSJ)
  • Nikkei up 1.9% because Japan export growth slows sharply, raising fears of recession (Reuters)
  • Saudis Risk Draining Financial Assets in 5 Years, IMF Says (BBG)
  • Syria's Assad flies to Moscow to thank Russia's Putin for air strikes (Reuters)
  • US Prosecutor Preet Bharara Probing Daily Fantasy-Sports Business (WSJ)
  • Syrian army denies Russian ground forces fighting in Syria (Reuters)

Banks Turn Down Deposits As Stealth NIRP Takes Hold

Back in February, we noted that NIRP had officially arrived in the US as JP Morgan announced it was preparing to charge some large institutional customers for deposits. This represented a kind of de facto (if not yet de jure) NIRP. Now, a combination of pinched margins and new regulations has led some of the largest financial institutions in the US to penalize corporate and institutional deposits on the way to instituting what amounts to a stealth version of negative interest rates.

Options Market "Crash" Indicator Hits Peak Panic, Surpasses Record Highs

Since we first exposed (and explained) the Black-sh Swan-link nature of the options market's Skew Index, the mainstream media has lept to various conclusions (from ignore it, like everything else, to 'wow'). However, what is crucial to comprehend is that the soaring Skew is occurring at the same time as a collapsing VIX. However, what we have seen over the last two days is somewhat unprecedented - VIX has continued to collapse into option expiration (and we know the pattern that occurs after opex) as SKEW has soared to new all-time record highs.

Ignorance Is Not Bliss

You’re doing yourself a disservice if you don't have a basic working knowledge of what, say, a volatility surface means. We're not saying that we all have to become volatility traders to survive in the market jungle today, any more than we all have to become game theorists to avoid being the sucker at the Fed’s communication policy table. And if you want to remove yourself as much as possible from the machines, then find a niche in the public markets where dark strategies have little sway. Muni bonds, say, or MLPs. The machines will find you eventually, but for now you’re safe. But if you’re a traditional investor whose sandbox includes big markets like the S&P 500, then you’re only disadvantaging yourself by ignoring this stuff. Ignorance is not bliss...

GoldCore's picture

The “smart money” and by that we mean the more informed, aware and prudent investors and institutions internationally continue to have an allocation to gold and or add to existing allocations. The less informed continue to not understand or disparage gold and focus almost solely on gold’s short term price action rather than gold’s long term attributes as a hedging instrument and a safe haven asset.

Market Expectations Of A Stock Market Crash Have Never Been Higher

With VIX collapsing 10 days straight (for the first time since October 2010), one might be forgiven for thinking "everything is awesome." However, as always, the real news is in the nuance that the mainstream often misses. As VIX has plunged (complacency about 'normal' risk), Skew (which measures extreme tail risk) has exploded to its highest ever...

Frontrunning: October 13

  • Playboy to Drop Nudity as Internet Fills Demand (NYT)
  • Stock futures fall on weak China trade data (Reuters)
  • Any Hall is down 20% YTD (WSJ)
  • Global Stocks Slide With Metals After Chinese Imports Tumble (BBG)
  • Clinton's tack to the left to be on display in Democratic debate (Reuters)
  • Switzerland Said to Impose 5% Leverage Ratio on Big Banks (BBG)
  • AB InBev, SABMiller brew up $100 billion deal (Reuters)