“Total Fiasco, Utter Circus!” Cried The CIO Asking "What's The Next Big Trade?"

Tyler Durden's picture

Some always enlightening thoughts from the latest weekly letter by Eric Peters, CIO of One River Asset Management

Hope all goes well… “Total fiasco, utter circus!” cried the CIO. “KGB videos, golden showers, kompromat, and his temper tantrum over that CNN reporter,” he continued, breathless. “Single worst press conference for a world leader in history. The $2bln Dubai deal. That random pile of manila folders. The dopey lawyer. Gimmicks, conspiracies, rambling bluster. We didn’t learn a single thing about policy. For the sake of our nation, pray The Donald sticks to Twitter.” And he paused, collected himself. “But the thing that upsets me most is that it didn’t spark a big enough correction to let me back into all my favorite Trump trades.”

“The Central Intelligence Agency will absolutely not resume using banned interrogation techniques, such as waterboarding, if ordered to do so by President Trump,” explained Mike Pompeo, The Donald’s already-insubordinate nominee for CIA chief. But it’s only insubordination if our new Commander-in-Chief were to send those bearded-boys to the water-board. To get elected he said “torture works,” America should institute “harsher techniques.”

He said lots of things. He said almost everything. Which allowed us to see in him whatever we wanted, both good and bad, without knowing a single thing for sure. And naturally, every investor hopes he didn’t mean half of what he said.

“China building of islands and putting military assets on those islands is akin to Russia taking Crimea from Ukraine,” declared Rex Tillerson, our PEOTUS’s already-assertive nominee for Secretary of State, pledging to block the Beijing Boys from their newly built bases. In one sentence, he angered the Russians, infuriated the Chinese, and placated our senators. The last time America threatened Asian shipping lines, Japan attacked Pearl Harbor. Which couldn’t possibly be what Trump wants.

But life gets more complicated when you transition from running to governing. More people get involved. The law of unintended consequences blossoms. “If you were to ask me three years ago, four years ago, when unemployment was still high and the economy was still digging out of a hole, I would have said, sure, fiscal policy would be great to help expedite getting back to full employment,” said SF Fed President Williams, challenging The Donald’s infrastructure agenda. “But today I don’t think we need short-term fiscal stimulus. What we need is really better policies, investments in the long-term health of the economy.”

And we carried on trading. Searching for the right prices. Reading into increasingly complex and contradictory comments whatever we want to believe.

* * *

“No one makes money in the chop,” said the CIO. “People make money on big moves.”

Trump held his press carnival, markets swung wildly. “The Yen was at 117 two days ago. Now it’s 114. Tomorrow it may trade 117. Will anyone make money?” A few will, most won’t.

“Nearly 100% of trading returns last year were made between November 8th and December 15th.” The dollar rallied 13% versus the Yen in that time. Ten-year treasury yields jumped 80bps. The Russell 2000 jumped 18%. Markets trended in uninterrupted fashion; a perspiration-free ride for the well-positioned.

“Those kinds of big moves are mandatory for hedge funds to make real money.” A few people profited from Japanese interest rates last year. Some nimble punters made money on Brexit. Trump provided the third real opportunity.

“You can’t make money in this business slicing nickels, you need to find $1,000 bills. Because prudent risk management precludes you from running positions at 100% of your fund assets, which means that even if you catch a 10% move, maybe you make 2% or 3% returns.” When you get really lucky, a Trump trade comes along, you’ve got the right positions, they correlate highly and you collect a few 2-3% profits at the same time.

“So the only question that really matters in this business is this: What’s the next big move?” he explained. “It’s probably a continuation of the Trump trade,” he said, pausing, considering the pain of 2016. “Last January, people were convinced the renminbi would blow up.” But it promptly rallied +3%, stopping most people out. If you held tough, or re-engaged the trade, you made a fortune. The renminbi fell -8% from those highs.

“The thing is, consensus trades have a nasty habit of working, just not exactly when you want them to.”

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Manipuflation's picture

Not that Eric Peters the libertarian though.  Tylers, come on.  Get ericpetersauto here.  He knows. 

Takeaction2's picture
Takeaction2 (not verified) Manipuflation Jan 15, 2017 2:28 PM

You "Dindus" and "Illegals" have 4 more days crybabys......you scared?

junction's picture

The Ringling Bros. and Barnum & Bailey Circus will have its final show on May 21, 2017.  That means that from then on, the Trump Presidency will be the Greatest Show On Earth, a last big American circus loaded with clowns, death defying acts, wild animals and figuratively, the Republican elephant.  Everyone get their tickets ready, the three ring circus (House, Senate and the Presidency) starts this Friday.   

WakeUpPeeeeeople's picture

Anyone betting on the Trump administration falling apart???
Just wondering.

order66's picture

Know quite a few people that make shit tons of money in the chop.

kochevnik's picture

How can anyone profit from price wiggling in a channel for weeks?  More free shiyte, please

bugs_'s picture

yes grasshopper, money is made in disequilibrium situations which is why the utopian equilibrium can never be achieved.

bombdog's picture

Tell me, if everyone is practicing this kung fu, who is left to collect the garbage?

bombdog's picture

Or the traditional way by doing some actual work and adding value, not merely sucking at the teet of credit expansion and market intervention.

wholy1's picture

Who really cares . . . except the financial/trader parasites contributing NOTHING to REAL "productive" enterprise anymore.  Capital formation for the purpose of said "productive enterprise" has, for all intensive purposes, VANISHED.  All those [paper/digital] "birds in the bush" - as in pensions, 401k[xyz]s, annuities etc - are not only out of reach, but eventually GONE as in . . . . P-O-O-F!  Will the PTB's (P-sychopaths T-hat B-ugger) finish the "[real] wealth consolidation/transfer" on the Trumpster's watch with a "mother-of-all" global financial system "call"?  Exciting times, Folks - hubba-hubba! 

Van G's picture

From analyst blog:

 

 

 

Again, YOU JUST CAN'T MAKE THIS STUFF UP!

 

Markets remain predictable and profitable.

 

Many people claim, ahhh, the markets are rigged.

 

Well, that may be the case. We at ShepWave are not going to say there is not some manipulation gong on. However, to think that the markets are not predictable is just ignoring the evidence ShepWave has presented in its past analysis.

 

Below are some charts including a chart of gold from when we gave a buy signal in late December; and that was after being short gold for several weeks. Also there is a chart of the QQQ (NDX) from when we gave a buy signal on December 2nd after being short. 

 

YOU CAN'T MAKE THIS STUFF UP!

 

Read today's ShepWave Updates at www.shepwave.com for more market direction in the future.

2_legs_bahhhhhd's picture

ffs.....SECURITY!!!.... there is a giant turd in the lobby.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) 2_legs_bahhhhhd Jan 15, 2017 5:30 PM

The mom’s basement dwelling, failed trader, now spammer, Van G, registered the following spam accounts to promote their scam. Please don't give him the satisfaction of seeing his site hit counter go up from ZH clicks. He's not very bright, but eventually he’ll go away if his spam scam doesn't bring income from ZH. The spam accounts are: AliSONY, Babs.St.Louis, Billy G, Chi Juan, Dr.Carl, ErikE, FemDayTrader, Irvingm, jasony, John Beau, KC Spike, MadhyaBharatx, MexInvest, MikeM54, Mon T, P Christmas Carole, Penny Trader, Pinky and the Brain, PUNE,  RoBERTAZ, RonnieM, Sonya B59, Stan Your Man, StevieTexie, Van G, Virginia Wooolf, wisetrader224, and xantippa

TradingTroll's picture

Traders provide liquidity.

Maybe you prefer more extreme volatility in prices?

Van G's picture

Only analyst who actually shows past performance in time stamped charts. Because they have been hitting it right on.

 

 https://www.facebook.com/166578775325/photos/a.10153488951800326.1073741827.166578775325/10154415124400326/?type=3&theater 

 

They are the one analysis who keeps their traders making money. Past time stamped charts prove that.

I Want to Believe's picture

Please die in a fire. Cunt.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Van G Jan 15, 2017 5:33 PM

The mom’s basement dwelling, failed trader, now spammer, registered the following spam accounts to promote their scam. Please don't give him the satisfaction of seeing his site hit counter go up from ZH clicks. He's not very bright, but eventually he’ll go away if his spam scam doesn't bring income from ZH. The spam accounts are: AliSONY, Babs.St.Louis, Billy G, Chi Juan, Dr.Carl, ErikE, FemDayTrader, Irvingm, jasony, John Beau, KC Spike, MadhyaBharatx, MexInvest, MikeM54, Mon T, P Christmas Carole, Penny Trader, Pinky and the Brain, PUNE,  RoBERTAZ, RonnieM, Sonya B59, Stan Your Man, StevieTexie, Van G, Virginia Wooolf, wisetrader224, and xantippa

Nomad Trader's picture

Bond market crash is the next big trade.

Citizen_x's picture

 

Maybe so, but hard to be sure.  Intervention in the markets is a sure bet.  It needs it's own index. 

3 weeks of lower lows for the dollar.  One might trade that...at the risk of intervention.

navy62802's picture

We are in a malais of propaganda. You can trust nothing at this point, beyond that which you can personally verify as true. This is where we are in 2017, despite or because of (I'm not sure which) the internet. Either way, you should question all information which comes from anything other than first hand experience.

fishwharf's picture

Calm down Eric.  Unicorns will still be profitable if you time your exit properly.  Here's a beauty: https://en.wikipedia.org/wiki/Moon_Express

gespiri's picture

Here's a trade: BUY EVERYTHING YOU SELL!!!

How do these dickheads became captains of industry we'll never know.....

2_legs_bahhhhhd's picture

This article is a snivelling load of drivel. Whining that you can't find any new sheep to fleece? What? The last 8 years of plunder wasn't enough? Used to be 10% profit in a year was good, now they want to make that every day.

Van G's picture

Only analyst who actually shows past performance in time stamped charts. Because they have been hitting it right on.

 https://www.facebook.com/166578775325/photos/a.10153488951800326.1073741827.166578775325/10154415124400326/?type=3&theater 

 

besnook's picture

the problem is there is no circus. ringling brothers circus is finished in may. coincidence?

Lorca's Novena's picture

The next big trade? What a dipshit.  Where are the tranches? Wheres the top?  But muh dow boo hoo... 

Tranches arent just mortgage backed securities anymore. Then again he could invest in Calpers http://209.157.64.200/focus/f-news/3514227/posts

Lorca's Novena's picture

Another note, If I was a hedge fund manager I would liquidate and buy small businesses that can accomodate the needs of the Pentagon, specifically companies that have no current contracts. Trump is going to dismantle the good ole boys clubs, and award new contracts that will save billions. IMO.

divingengineer's picture

I'm gonna worry myself sick over this guy's profits.

Iconoclast's picture

The next big short? Same as the last one IMHO, property. This time China.

They've gamed the USA, ECB and BOJ at their own game; frac reserve banking, creating fiat as a consequence of mindless debt and allowing that freshly minted cash to infect an already bloated global monetary system. China will be the catalyst to crash the world's already broken economy inside two years. Perfect fall guy and blame material for western governments who've also fucked up.

PitBullsRule's picture

How about you get a real job and do something useful?  Or do you not know how to do anything useful, CIO?

divingengineer's picture

He knows how to risk your money to make himself wealthy, and maybe if you play your cards right he'll throw you a bone.
Or he may just as well jank you out of all of it.

hedgiex's picture

A CIO crying a river in the approriate "One River Asset Mgt". He can't handle the volatility. Surest way for your investments to go up in smokes is to entrust it with mindsets that lament when markets do not spin to their frames. Lesser CIOs who get it wrong just lick their wounds and fight another day. What a sore loser ?