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Record Highs? So Why Are Bond & Stock Traders Hedging So Aggressively?
Draghi quasi-delivered and, so far, no nuclear weapons have been dropped in Ukraine... must be time to BTFATH in stocks... so why are investors bidding up protection costs in equity and credit markets so aggressivley this morning?
VIX?
Credit?
Charts: Bloomberg
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I would think that the answer to that question would be self explanatory. To me that's just prudent management at these levels in this environment.
Yup...the higher it goes, the more you are forced to hedge. However, honestly if the entire thing does collapse, if and when, I think the counterparty and liquidty risk is severely underestimated...much like in 2008. Hedging of any types of financial instruments might not even make much of a difference.
btw Doc, is fonzy really gone awol?? What about Frankie Sawyer (HY Brasilian)
See my comment below. Margins are getting crushed again for energy and commodity producers. Regardless of all these paper "markets", you can not build or do shit without enery available for consumption or commodities.
Yep he's gone. I got an email from him yesterday. He's had enough.
Wow another one bites the dust....well at least he wasnt banned...anyhow, his humor and logic will be with us in spirit.
That's sad, Doc! He was a wonderful commenter here--knowledgeable, witty and willing to engage. If you engage him outside of this forum, ask him to reconsider his decision as there are many of us here who value his opinions. Yes, it is okay to take a time off this madness, but he should probably rejoin once he is "detoxified".
Just an observation from the outside, I felt he and many others who left got too emotionally involved with many topics/commenters here, and that generally burns you out. You have to watch the show from the periphery. You and I have been here a long time, and the only way to survive the ebb and flow of this site's content is to not get "emotionally involved". I figured this place out very early--I am sure you did too--and survived the fallout. Many didn't. I still remember Cheeky Bastard, Andy, Steak, Phaesed, NoPhat, Kali, Aristachan, Shameful, DCRB, Anonymous Moneterist, et. al. They all left after a while, probably burning out. Once common them that runs among them all, I feel, is--they got too emotionally involved with this place and that burned them out. Just my two cents.
I agree 100%. Many of us had emotional capital tied up into this place and watching it devolve from a place where there was plenty of well thought out debate and people searching for truth into what it has become tends to weigh on a person. There are still a lot of bright participants, but the Hedge certainly isn't what it used to be. It's become to much of a right leaning echo chamber filled with mediocre articles whose sole purpose is to generate clicks.
Hey, Doc, remember a couple months ago when Obamacare was in jeopardy becuase of a legal technicality that meant only STATE-run exchanges could offer subsidies (not the Federal exchange)? Everyone jumping up and down that this might kill Obamacare?
Well, that's all gone now. The Appeals Court just threw out their own decision and decided to re-hear arguments anew. This time with 14 (newly appointed) judges instead of the usual 3.
Done. It'll never even make it to the Supreme Court now.
http://www.cnbc.com/id/101971636
Fucking crazy world where the corruption seems to be accelerating, It's coming so fast that most of it gets lost down the memory hole.
Nothing means anything anymore. Just gotta wait until gravity reasserts itself.
Didn't you hear dawg? Gravity is now illegal.
Silver still hanging out near $19. Get it while ye can.
I should have just bought the fucking dip.....I'm a fucking idiot
I rather be a righteous poor man than a gutless wealthy man.....I am sure NOT ALL of the elite have bad intentions....but yes there is a war of the elite going in right now....and there will be a day of retribution in the future.
Yep, I'm a lot happier since i got out of the rat race. I now look at the world as a gigantic soap opera....
Hedgers will be crushed again and drive the market still higher... we have reached a permamently high plateau... from which we will continue to climb... forever...
Forward, Zimbamerica.
There is a big difference between hedging and shorting. Shorts will get crushed as the "market"move higher, hedgers will just give up some upside return for downside protection.
They call 'em Kamikaze Shorters, on the count of you gotta be willing to lose everything if you're gonna short these days. Up, up, and away.
Seen many a ZHer comment on how they got smashed by daring to short in the last couple of years.
PMs and useful things are my only investments. If there are any humans to play, enjoy, and appreciate musical instruments in the future, string, brass, and percussion instruments will be invaluable when no one knows how to make one anymore.
a huge difference, yes. as much as between shorting and naked shorting, or between speculating and gambling, or gambling with your money and gambling with Other People's Money
having said that, most hedge funds belong to the last category. and they often don't pay taxes at all, keeping their gains in special funds as collateral and borrowing their living expenses
I know, many here have a hedge fund manager or two as their pet heroes, but there it is...
Hurry up... go short!... HURRY UP!
I pooped today!
I never take for granted the importance of a good bowel movement. Great way to start the day.
Just once?
Now twice!
I still believe in fundamentals. Pooping is fundamental!
Did I stumble onto facebook? Status update?
just few billionaires !!
The Ukraine peace plan, if it goes through, will not be good for "the economy" which men so worship, eh?
So, the dollar is up almost 1% at 83.60 and gold is down.......90 cents. Hmmmm.
Off topic. The volume in gold has been massive in the last 3 days, but nobody seems to pick up on that. Trend reversal coming?
NO - Disaster coming. White House insider says the taupe suit was really "ash-colored" - a signal. USGS knows Yellowstone's going to unzip before the next full moon.
Hey...I saw it on Youtube. Gotta be true!
Why? Shit, unless you know the details of everyone's position and who the players actually are, it's probably irrelevant, especially at the current level of monetary stimulus/intervention.
I'd say this is just more useless paper-pushers and people ignoring the history of previous currency collapses.
Why do I say that? Here's why;
I just got off the phone with a customer in Brazil. They want to modify their payment plan for a current contract that extends into 2016. I said no problem so long as they don't mind that I will also modify my delivery schedule. The conversation ended shortly thereafter and their attorneys are now talking to mine.
Shit will be getting real shortly. Trade is the only thing that fucking matters, period. And I am not talking about trading useless fucking financial "products" either.
Let them eat dollars, euros and reals.
Exactly.
Synthetic Investment Vehicles are dropping from the sky with little return on investment. Color me shocked.
"Free money High's" and programmed resistance means no more lows bitchez. Mark said it, "generational low".
Listen here! The time is now for extreme leverage because there is an obvious safety net that will catch-all!
Listen MAN! Listen.
...so why are investors bidding up protection costs in equity and credit markets so aggressivley this morning?
Easy. They are stupid and enjoy wasting money.
No. Stupid is assuming this will continue forever. Very few have the balls to short into this.
Again, how is DRAGHI'S PLACEBO working out this morning?
Learn how the system works:
ECB makes policy based on Target2 unpaid bills
FED makes policy based on Derivative Gambling
See my comment above. Both central bank approaches are failing, period.
Commodity and energy producers have real fucking costs to cover. Our margins are getting crushed.
Start growing gardens and learn to can food all you dumb-ass sheep.
As you say:
Monetary policy is no replacement for resource scarcity
For the "official" record;
There is not, nor will there ever be a monetary, political, or economic solution to resource scarcity.
Agree. Only Military solution can partially do something about it.
Bravo. As stated above SIV Is funding the war on terror. The Architects of the three pyramid chaos state is in fear.
How can we manage the ponzi scheme advancement? Paul Krugman will chime in. Cannot wait to see the pistol jammed down their throat begging to offer money in a USD collapsed monetary rigging game
The blame game will commence. Don't kill me, here are the names of the people I work for. Thanks Paul. Bang, bang!
Then we go up higher the food chain. This happened during the US Civil War, text books exclude details. Britain Crown Jewel is going to get bitch slapped again. There is no Jew in a Jewel. How many chairs did you throw into the wall?
Anger management classes may be in order
;-)
Today it is confirmed if anyone had any doubt. There are no markets, just Central Banking moving all the parts. Charts, fundamentals, technical analysis, all in the garbage. The strong dollar will destroy the earnings of all mult-nationals, and the markets only go higher. What a joke.
They're trying. One look at Japan says to me "thirty years of failure ought to count for something."
Again 45% of US corporate profits come from Europe. With the dollar hitting 13 month highs vs the Euro, this will not be good for corporate profits. The fact that this run is in its 6th year and 3rd year without any meaningful correction, tells me that when this does break it will be 40-50%. Same as its ever been. Everybody cannot will not be winners. All this talk of THE FED not allowing this to happen is nonsense. That's what has been happening for the last 20 years.
It would be ironic indeed if US based multinationals had to rediscover the US consumer. "You'll have to lower prices by 90% just to enter your own market"!
Wait for it here it comes the PPT in over drive
Hmmmm...not seeing that. Draghi Top I tells ya.....Draghi Top.
I'll just be over in the corner enjoying my TVIX enema.....feel the burn.