Mark Spitznagel

Weekend Reading: The Beginning Of The Ending

The only other time in history where the Dow advanced 5000 points over a 24-month period was during the 1998-1999 period of “irrational exuberance” as the Fed was fighting the fears an inflationary advance, while valuations were rising and GDP growth rates were slowing. Maybe it’s just coincidence. Maybe “this time is different.” Or it could just be the inevitable beginning of the ending of the current bull market cycle.

What Is This "Neutral" Interest Rate Touted By The Fed?

To assume experts at the Fed could determine the proper, optimal interest rate, without a competitive discovery process, is to assume away the real-world information problems that we all can agree market prices solve. Indeed, perhaps this is why our economic problems persist?

Dave Collum's 2016 Year In Review - "And Then Things Got Really Weird..."

"Markets don’t have a purpose any more - they just reflect whatever central planners want them to. Why wouldn’t it lead to the biggest collapse? My strategy doesn’t require that I’m right about the likelihood of that scenario. Logic dictates to me that it’s inevitable..."

Weekend Reading: Copious Cognitions

If this market rally seems eerily familiar, it’s because it is. In fact, the backdrop of the rally reminds me much of what was happening in 1999...

Beware Central Banks' "Illusion Of Control"; Spitznagel Warns "If The Fed Hikes, Markets Will Go Down Very, Very Hard"

"There is this sort of collective psychology that says that the Fed can keep this going, that the Fed is in control. But, in fact, central banks are not in control... Central bank balance sheets are twenty-trillion, the whole global securities and derivatives market is a half-a-quadrillion. So, in fact, central banks are miniscule compared to that. The only thing they have going for them is this collective psychology. It’s an illusion of control."

Has The Market Crash Only Just Begun?

"There is massive cognitive dissonance here... the crash has only just begun... The "let's make a deal" market is choosing monetary interventionism but when that door is slammed open, we will see that dreaded black swan monster."

Rand Paul Rages "The Fed Is Crippling America"

The Fed is, indeed, a political, oligarchic force, and a key part of what looks and functions like a banking cartel. During the 2007-08 financial crisis, the Fed’s true nature was clear to anyone paying attention. We can’t really know what we don’t know until we look. We owe it to the “swindled futurity” of the next generation to take a long, hard look through a full and independent audit of the Fed.

"When Is The Crash Going To Happen?" - Mark Spitznagel Revisits "The Ticking Time Bomb"

Timing a crash can be a fool's errand, and fortunately such efforts are largely irrelevant if you are tail hedging (though they are quite relevant if you aren't). But this doesn't mean that exercises in timing are without merit. Without a doubt (or at least with over 99% confidence), bad things happen with increasing expectation when conditioning on higher Q ratios ex ante. Factoring time into the equation, and again based on history, the confidence interval around the median time would point to an expectation that the crash should commence right about now.

For Hedge Funds, The Real Pain Is Only Just Starting

Presenting Exhibit A: Goldman's latest YTD performance breakdown by strategy basket. It reveals is that far from suffering even the most modest correction, the "Hedge Fund Hotel" strategy (aka the most concentrated holdings), is massively outperforming not only the broader market, but has returned double the second most profitable strategy - investing in companies with high revenue growth. In a world in which the Fed just saw its credibility crushed, expect this to change shortly.

Mark Spitznagel Warns: If Investors Thought August Was Scary, "They Ain't Seen Nothin' Yet"

The man who made a billion dollars on Black Monday sums up his strategy perfectly in this excellent FOX Business clip with the money-honey, "I'm a hedge fund manager that actually hedges for his clients. This is something of an old fashioned idea in this day of just gambling on the next Fed bailout." Spitznagel, who is wholly unapologetic in his criticism of The Fed (and any central planner), unleashes eight minutes of awful truthiness on what is going on under the surface of the so-called 'market', concluding ominously, "if August was scary for people, they ain't seen nothin’ yet."