What Happens Next?

Tyler Durden's picture

One of these things is not like the other...

Bank stocks have exploded... bank credit markets have not! So what happens next?

 

But then again - what do those 'dummies' in the professional, multi-trillion dollar credit markets know anyway?

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SomethingSomethingDarkSide's picture

You buy FAZ and hold on for dear life!

Iconoclast421's picture

Actually puts on FAS would likely pay out more, since FAS bleeds 3% per month even if the underlying goes nowhere.

Squid Viscous's picture

Isn't that already built into the puts? serious question.

other wise it's a nop brainer to play FAS/TNA etc short here via longer dated puts

jmack's picture

it is priced in. The time decay outpaces the roll yield.   market makers are not in business to lose money.

Dr. Richard Head's picture

MOAR CREDIT!!!!!!!!!!!!!!!!!

JRobby's picture

The house always wins, or they sick regulators on you.

https://duckduckgo.com/?q=Casino%2C+deniro+breaks+cheaters+hand&t=ffnt&a...

(Jeff Beck - killer wha sound track)

glenlloyd's picture

As we've seen before, credit always knows.

I'd bet that credit is right...

remain calm's picture

Expect credit (debt) to explode. Dah

Miskondukt's picture

What do they do next, keep on enriching themselves while the middle and lower classes still can't access any reasonable financing, not to mention jobs that have stayed static in wages over the last 20 or so years.

Atticus Finch's picture

That would be 40 years. Some say buying power is no greater than 1962.

assistedliving's picture

my every short has returned my ass on a 'silver' platter.  and when i wanted to short PM's i chickened.  go figure

 

Long n strong (PM's that is)

Squid Viscous's picture

Dick Bove says this time is different

bada boom's picture

Can I see that bottom chart up to Nov 2016, Please

. . . _ _ _ . . .'s picture

Isn't that info on the top chart?

bada boom's picture

The bottom chart is for added effect then?

. . . _ _ _ . . .'s picture

Bottom is pre-Feb w/ recession pink. Top is post-Feb.

They should probably be the other way around.

Agent P's picture

He fixes the cable? 

. . . _ _ _ . . .'s picture

"Bank stocks have exploded... bank credit markets have not! So what happens next?"

Moar debt in order to catch up to stock price.

joego1's picture

When I was a kid I had a pet hamster and would fill it's cheeks with food (debt). It was funny to see how much it could stuff in there. Unfortunately it escaped and was found smashed between the dresser and thw wall. The market will try to escape Trump and be smashed into the wall.

pound the vix's picture

How the markets work:

 

The Banks have analyst who "research" and says which stocks are over valued

They sell this research to hedgefunds and individuals (make a profit)

The hedgefunds and individuals short the stocks (banks make a profit on the transaction)

The banks then see all these investors have shorted a stock so they contact there internal High frequency traders who pound the stock with fake asks (make profit)

The bank issues an upgrade stating the stock is now undervalued (more profit)

The stock starts to rise, the bank piles in (more profit)

The shorts reduce risk (buy back the stock) (more bank profit)

The shorts continue to loss (close more shorts) (more bank profit)

The banks really start to pound the shorts

The banks pound the VIX to get the whole market moving up

The banks float a rumor that there are potential merger talks

The shorts panic and have to buy to close the position.

The banks issue researh showing the stock is over valued

Rinse repeat

and that is how for 5 years a bank can have NO days with trading losses

TheRideNeverEnds's picture

What happens next? Well new new all time highs of course.

Don't tell me you didn't BTFD.