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Guest Post: Repressed Fear

Tyler Durden's picture




 

Via Global Macro Monitor blog,

This nice chart comes to us from the Leuthold Group via Bloomberg.   It illustrates that market fear or risk aversion is at its lowest levels since the 1980's!  Yikes!

 

The Leuthold Group constructs their Risk Aversion Index (RAI) with a combination of market based indicators,  including credit and swap spreads, implied vol, currency moves, and commodity prices.

No doubt quantitative easing is repressing market fear.

They also note that periods of low risk aversion tend to run longer than streaks of elevated risk aversion.   How long this time?   We don't know but we're going to think long and hard over the holiday about the potential macro swans in 2013.

Here are eight starting thoughts we will be contemplating and researching:

  1. Japan pushes too hard with fiscal and monetary easing and tips over into a debt and currency crisis;
  2. markets begin to fret over France and Italy;
  3. the U.K. starts to have trouble and doubts increase its over debt sustainability;
  4. inflation begins to creep up calling into question the sustainability of global quantitative easing due to the rise of stagflation;
  5. increased political instability caused by stubbornly high unemployment;
  6. the U.S. can’t get it together politically to implement the necessary structural economic and fiscal reforms;
  7. China's financial and credit problems surface and create panic in the local financial markets;   and
  8. geopolitical tensions in Asia get hot.

How will these affect our trading?

We'll go with trend, keep them on our radar and try to find cheap avenues to express or hedge the swan events.

 

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Fri, 12/21/2012 - 10:24 | 3086488 CPL
CPL's picture

For those that are having problems this morning with Wireless connections and network conectivity in general.

 

Update your router's firmware and do your OS updates.

 

We are up to 18 date based viruses that seem to be beating the crap out of layer 3 equipment and stomping on perimeter security devices that aren't updated.

 

END/DEV/TECH staff clear your scheduel, we are going to be busy for a couple of days.  Sucks that it's Xmas holidays, but we're not paid to be pretty.

Fri, 12/21/2012 - 10:48 | 3086569 Ralph Spoilsport
Ralph Spoilsport's picture

I was putting out a few fires caused by this yesterday. Gotta love the OSI model.

"Please Do Not Throw Sausage Pizza Away".

There's a lot of weird stuff going on as you have pointed out many times.

Fri, 12/21/2012 - 10:55 | 3086609 Tippoo Sultan
Tippoo Sultan's picture

Indeed, Leuthold's RAI very likely overlays quite closely with the VIX. 

Fri, 12/21/2012 - 11:13 | 3086649 CPL
CPL's picture

It's not weird, it's atypical of a big date.  Configuration management is overly complex for most offices and home users it gets over looked too often.  And the dickheads that write the viruses know it.

 

OSI the holy seven layers of narrowing it down to a single problem/resolution.  we stand on the shoulders of wiser men than ourselves to get our jobs done.  I can tell it's bad, lots of requests for good AV products this morning, which means it's too late for those folks.  Wipe and reload for them, faster and easier now with SCCM OSD/MDT.  15 minutes to rebuild a box or 12 hours fucking around services/daemons/startup.

 

If you collect the boxes your respective shops, power them off, grab the asset number/netbios (however you manage it in shop), build a collection in SCCM to contain the annoyances, then deploy with a light touch install.  Don't let them boot from disk.  So far it's the reboots that are killing people so if you can save that step.

 

If your users keep crap on their machine instead of a network drive.  Get them to reread their network usage policy again, let their managers bitch, but you can't have a building of people down or you aren't going home for the weekend.  Defend the line lads/lasses and the business agreements your managers have in place for terms of service.  

I hate days like this, nobody is happy with the results and it's creates months of bad blood until a golf tourney/beer cart appreciation day.  All because some pissant virus writer thought it would be in their professional best interests to shit on their brothers/sisters working in IT.  They don't hurt the users, they eat our time.  I swear I ever physically catch one of the virus writers, the beating given will be epic. 

 

BTW, six fo those Viruses are for MAC, 2 are for Linux Kernels so those with Apple products and Linux put away the smug hat for the day and update AND get a virus checker.

 

Microsoft Security Essentials - if you've got XP or greater, it's included in your license, ergo "free"...well paid for.

Google MSE

 

Linux/Apple

AVG is the least annoying one.  Free version > nothing.

Fri, 12/21/2012 - 11:31 | 3086763 Ralph Spoilsport
Ralph Spoilsport's picture

Had some strange ones for sure. Two of them involved WiFi printers that kept losing their connection until I updated the BIOS on the wireless router. One of them started printing in Cyrillic. Haven't figured out why yet.

 

Fri, 12/21/2012 - 12:42 | 3087118 CPL
CPL's picture

Reset the printer and router.  Like the blackberry virus that shut down India for two months that was infecting the phones by proximity of blue tooth (poor security and silent).  It's writing itself to the memory holding the iOS on the router.  From what I've found though is a hard reset and keep all traffic contained in the office/home is the safest way to hold them in place.  Basically this is now an asset management practice, so grab your inventory and start checking off what's in your area that could be infected.   Hard reset is the only way to clean it right now.  So keep any configuration you'll need for the device handy to reset it back up.

i.e. pull your connectivity so it doesn't get reinfected after a hard reset and it's not delivering your office payload somewhere.  So far common thread is wireless anything.

The viruses have been found in the following devices and includes and is not limited to.

  • tablets
  • phones
  • laptops
  • printers
  • NAS devices
  • Wireless Speaker headsets
  • Blue tooth headsets with more than 64k of memory
  • Wireless mice/keyboards

Anything with a Broadcom or Atheros chipset and 512k of buffer built into seems to be a target.  It's not going after the OS, it's sitting on the stack of the device and leveraging the stack to send whatever it's capturing somewhere in China, as usual.

 

I'm almost at the point I'm going to start recommending to clients to just block IP range for the entire country for good measure until the Chinese learn how to do their jobs properly and step on the necks of the twerps doing this crap.  

See if they like it if we shit in their cornflakes the day before Chinese new year, ruin their vacation and keep doing the same thing the day before every Chinese holiday.  I believe in sharing pain if it's being handed out to fellow professionals.

This is the eighth time this year and my (and other's) patience is running thin on China and it's sloppy and shitty IT practices.  They better lock it up, or we'll lock them out until further notice and if they want to play with the rest of the world.  It'll be a painful audit before they get on again.  We won't bother pass laws on the subjet either, we'll have a conference and hand shake the global change then release whitepapers illustrating how to lock them out under the banner of IEEE.

 

Fri, 12/21/2012 - 11:36 | 3086775 forwardho
forwardho's picture

.

Fri, 12/21/2012 - 11:36 | 3086801 forwardho
forwardho's picture

Roger that CPL. Turning my riggs into Bots.

 

Fri, 12/21/2012 - 12:48 | 3087167 CPL
CPL's picture

Don't let the clients take home laptops, it's just asking to redo it all when they come back..  And if their laptops are coming back disable the wireless in them and wipe them.  

Yuck...portable devices.  Bane of computing.  2 dollar Crack whores are cleaner and less parasite infected.

Sat, 12/22/2012 - 12:00 | 3089667 aminorex
aminorex's picture

Your operating model is obsolete.  It's like RIAA complaining about P2P.  When the solutions are worse than the problem, the paradigm is obsolete.

Fri, 12/21/2012 - 10:24 | 3086493 Cursive
Cursive's picture

Seven good years, seven bad years.  Pity those nations who do not use the seven good years to softern the seven bad years.

Fri, 12/21/2012 - 10:40 | 3086548 Salon
Salon's picture

A people always get the government they collectively deserve.

It keeps the universe in balance.

Fri, 12/21/2012 - 10:25 | 3086498 The trend is yo...
The trend is your friend's picture

Ben's got our back. He loves us. That chart will flatline

Fri, 12/21/2012 - 10:32 | 3086524 Buckaroo Banzai
Buckaroo Banzai's picture

Ben's got your back alright, but not in the way you're thinking.

Fri, 12/21/2012 - 12:19 | 3087043 Clowns on Acid
Clowns on Acid's picture

Yeh...Ben is just giving you a "reach around" with this QE business.

Fri, 12/21/2012 - 10:30 | 3086511 buzzsaw99
buzzsaw99's picture

the bernaked will buy all the stocks after he buys all the bonds

Fri, 12/21/2012 - 10:32 | 3086521 4realmoney
4realmoney's picture

Time to go heavy on precious metals. Everyone expected the gold/silver price to dip going into 12/31. In 2013, we are primed for an enormous move up. I suspect premiums will be rising soon. Luckily, most dealers still seem to have some inventory.

https://www.texmetals.com

 

Fri, 12/21/2012 - 10:33 | 3086528 FLUSA.com
FLUSA.com's picture

When we go over the cliff should we still move our feet like we are still trying to move forward, or like a diver, do we hold as straight a form as possible for the smallest splash possible as we enter the ground below?

Fri, 12/21/2012 - 10:56 | 3086610 Spastica Rex
Spastica Rex's picture

Spread your arms and legs, fall as flatly as possible to increase air resistance, and look for a freshly plowed field to land in.

Fri, 12/21/2012 - 11:16 | 3086692 Pat Hand
Pat Hand's picture

There isn't a real fiscal "cliff".  This is just the Y2K of 2012

Fri, 12/21/2012 - 10:36 | 3086535 Salon
Salon's picture

I told everyone to go short a few days ago. The stars rarely line up so perfectly as this.

But no one listens to Salon the Illiterate.

Seriously if you wont take advice from an anonymous internet poster who will you take advice from? DB? JPM? The ECB?

Fri, 12/21/2012 - 11:38 | 3086816 De minimus
De minimus's picture

Thank you O prescient one, we are unworthy.

Fri, 12/21/2012 - 10:40 | 3086553 Catullus
Catullus's picture

BTFD.

Sorry. This "cliff" drama continues until March when the debt ceiling needs to be raised.

Fri, 12/21/2012 - 10:41 | 3086554 Inthemix96
Inthemix96's picture

You know what?

I am sick and tired of feeling ill and fatigued.

Never mind repressed fear.

Fri, 12/21/2012 - 10:42 | 3086556 Dr. Engali
Dr. Engali's picture

So after we go over this scary fiscal cliff thingy and we get a weakened dollar against the Euro I wonder what the Europeans will do for their turn. Back to Greece? ...Maybe since Monti is stepping aside they will skip Greece and go straight to Italy.

Fri, 12/21/2012 - 10:42 | 3086565 Boilermaker
Boilermaker's picture

HEEEELLLLLOOOO PPT,

Green by close.  Guaran-f'ing-teed.

Fri, 12/21/2012 - 10:43 | 3086570 Ignorance is bliss
Ignorance is bliss's picture

I am just glad the middle east turmoil Won't be factor in 2013.

Fri, 12/21/2012 - 11:35 | 3086779 WhiteNight123129
WhiteNight123129's picture

Define Risk.

Risk = government bonds worldwide.

 

Fri, 12/21/2012 - 13:04 | 3087230 Clowns on Acid
Clowns on Acid's picture

Tyler,

Nothing on a US "Constitutional crisis" based on Obama's over reach / anti-colonialist objectives (# 6 in the list is way too "soft" of a description) ?

This could set off all the "maybe's" that Leuthold lists. Now won't that be fun?

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