New Normal
The One Stop Credit Shop For The New "New Normal"
Submitted by Tyler Durden on 05/28/2010 13:38 -0500In the current environment, where the market's Advance/Decline line is swinging with greater daily amplitude than ever before, the only thing glaringly obvious is that nobody has any clue how to trade pretty much any asset class. Which is why the following presentation by Morgan Stanley's Jim Caron does a great job at summarizing at least some of the core fundamentals in this new, "new normal" where corporate risk no longer exists, only to be replaced with unprecedented sovereign risk and pervasive moral hazard. It is a must read for anyone who dabbles in any market even remotely connected to credit (which implies everyone): 112 pages of no-nonsense (if somewhat biased) goodiness.
The New New Normal? Futures Take Out 1,150, Carry Crumbles, Gold On Verge Of $1,200
Submitted by Tyler Durden on 05/06/2010 11:00 -0500

Was this it for the bear market rally? The new new normal, same as the old normal: Risk and Carry off, Gold on...Meanwhile, the panic over at the Eccles building can be felt all the way in Europe.
Guest Post: Dropping Acid in Disneyland: Thoughts on the New Normal
Submitted by Tyler Durden on 05/01/2010 13:02 -0500The boom and bust cycles of the new normal (as it wishes to be called) can be characterized. This characterization provides clues about the nature of its endgame and progress toward that end.
- Economic growth fueled by easy monetary policy leads to excessive investment in specific assets (bubbles), resulting in more extreme boom and bust cycles.
- Government policies to regulate the cycles lead to further crises that impact higher levels of capital structure.
- In particular, very steep yield curves result in a generalized carry trade.
- Equity valuations always get smashed in a crash. However, in the new normal the top of the corporate capital structure is not as immunized as it has been.
- The next to get smashed? Sovereign credit.
- The Endgame? The United States lives within their means, or U.S. t-bills get hammered.
New Normal For Retirement Benefits?
Submitted by Leo Kolivakis on 11/18/2009 22:08 -0500ECB President Jean-Claude Trichet on Wednesday urged European insurers and pension funds to have sufficient capital on hand, stressing they are "systemically important" to the financial system. I have long argued that insurers and pension funds need to be monitored by regulatory agencies that respond to systemic risks. Unfortunately, the New Normal for retirement benefits looks a lot like the old normal based on chicanery and deceit.



