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Spot The Odd One Out
Sometimes you just have to smile (but mostly just scream). Volatilities across all asset classes have crashed back towards complacent levels in the last few days as, apparently driven by utter confusion by The Fed, stocks have soared, vol compressed, and risk vanquished. There is, however, one asset that is back at near-record-high vol...
Spot the odd one out...
(on a side note, we do see FX vol picking up -slowly but surely- at its highest in 16 months)
And even better... energy companies volatilty has cratered... even as the underlying raw material that drives their entire business model and business risk (no matter how well hedge they think they are) is seeing its volatility soar...
Smells to us like massively widespread hedging - explaining the cessation of selling- (perhaps even HY traders) have piled into Oil vol (instead of unwinding their energy-sector exposures) as they 'assume' - just as the fed promised - this price drop is transitory (rather than, as Pickens explains, structural and will lead to massive rig count reduction)...
We await the liquidity of thge new year and options maturities to see the decision-making process - roll the hedges (at far greater cost) or unwind energy-sector exposure?
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I suspect, as Fed rate hikes are finally accepted as a coming reality, there's going to be a lot of unwinding of the massive levels of leverage now propping the market up.
oil is going to rebound bringing implied volatility down with the rest.
How? How will it rebound?
Ask Yellen.
sleep, investors.... sleeeeeeep
To quote Dear Leader: "Complacency violated the cat"
Nothing to see here, move on.
Digitally create dollars, buy futures, just like the S&P. The dollar's strength indicates the entire world is OK with the manipulation.
Imagine what will happen when the Fed then fails to hike or hikes and then lowers again.
The Fed played their hand, now oil producing nation-states are playing theirs. As long as Russia and the Kingdom of Saudi Arabia keep the pipes primed, the price will stay low. There isn't the demand for oil in America like there was 10 years ago. People don't have the money to drive. And Chinese industry is slowing down.
Demand is slowing, supply has platued, the only thing that would raise price would be a production shock but GDP can't support a rise in prices (not the real GDP anyway).
Hope its true. But not sure thats the case. People always have money to drive, at least to some degree. Only way this works is if GDP is not growing as reported. And I think you are onto something there.
LOL He said rate hike LOL
Add just 180 b.p. to Japanese rates and they go to >100% of government receipts just to pay interest
Greece and Japan are leading the way. Everyone will watch and learn.
A rate hike will tank the economy, not to mention the impact of even 25 basis points on $18 trillion government debt. If the Fed does indeed hike rates, then it will do so knowing that it is tanking the economy. Possible, for sure.
maxw3st
How can they raise rates? Won't that blow the whole model up? Rates are near zero forever. Bernanke said they will never rise in his life time. Yellen is telling a fary tale.
my neighbor's step-mother makes $68 hourly on the laptop . She has been out of work for 10 months but last month her pay check was $15196 just working on the laptop for a few hours. try here... www.works3.com
The others will follw oil into volatile markets - especially finance. Some large banks unwound through the drop, but others didn't. There will be massive bank busts when oil revenue shows a drop when the 1st quarter reports.
Does the threat of "new" energy technology on the horizon freak them, the oilers, out? I dunno...as I am misled and misinformed as a rule. So...bread and circus today. Seahawks!
What, like cold fusion? Or weird copper balls that gyrate energy? There are no alternatives to oil, just theories.
there is one, well known by einstein, it is called stones and wooden sticks. come just after robotics fuck the grid , around 2050
Tick tock moth-er fawkers!
cmon... guys and girls... think outside the box... to get oil up and great market demand going u need.... wait for it.... WARRR......
Warrr and maybe Libya on fire?
http://www.aljazeera.com/news/middleeast/2014/12/five-spreads-at-libyan-...
This is how you make the big bucks on Wall Street. "Extend credit to that."
Can't say the money is no good or that there isn't real liquidity in energy markets.
The folks who run the Banks aren't paid to sit on the money. They got the top job because they were still able to lend at interest with or without a bailout.
And that would be to more than just the Government.
Morgan Stanley et al have made a fortune "not waiting for recovery." Just had a big growth print...there is no hiring, you've had a massive price increase for almost everything. It's not like the pay structure is a problem.
Those hundred million dollar bonuses are paid for by the taxpayer.
When the Global Sh#t Hits The Fan, You'd Better Have a Plan
http://newamerica-now.blogspot.com/2014/02/beyond-collapse.html
BTFD the NWO can do whatever they choose to do because they own the market software and have indefinite wealth.
"And even better... energy companies volatilty has cratered... even as the underlying raw material that drives their entire business model and business risk (no matter how well hedge they think they are) is seeing its volatility soar..."
Maybe because all the major sellers have tapped out and the buyers out there are too scared to get back in big time and now everybody is waiting on the sidelines to see what happens next? Probably Puts/Calls/hedges are locked in to see where it goes?
Fibonacci probably has something to do with the recent Oil support. There may be a next step down too.
Our Fairy Godmother (Aunty Janet) can fix anything with a wave of her magic money-printing wand. Watch for the Fed to bid up the futures market in oil if the boffins see too much volatility. "Interest rates will rise" is just a scare tactic to get the money back from the Emerging Market countries (i.e. BRICS) and show them who still runs the World. So far, it is working perfectly.
That word, I do not think you are using it properly. Or perhaps you think it means something else?