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Unwinding The Zero Hedge "Great QE Unwind Trade" At 18%+ Relative Return
Back on May 17, Zero Hedge proposed a simple trade idea, something what we called the "Great QE Unwind" trade. The trade consisted of two legs: "long Utilities and Consumer Staples while shorting Industrials and Consumer Discretionary, leaving Financials alone." We unwind this trade today, one day ahead of the announcement of QE3, as it has since returned an absolute +3.7%, and a whopping return 18.7% over the broader S&P index. Obviously this is for the less than three month period the trade was held, and not annualized. We now unwind the trade. To those who piggybacked on this trade that not only protected capital, but generated absolute return, congratulations! To everyone else, better luck next time.
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that's one great unwind. here's another:
http://azizonomics.com/2011/08/08/the-battle-of-london-disaffected-youth-vs-the-state/
great unwind of british society, bitchez.
Its basically the dirty scum here rioting. Aka: uneducated, low class, mostly immigrant, peasant chavs. They should have their state benefits cut to negative (they pay to be able to live here) and any sort of privilidges they have revoked. Or juvy for life, whatever.
It is assymetric warfare urban style, you lock us up it costs you more ha ha.
http://thinkingaboot.blogspot.com/2011/06/new-nihilism-becomes-meme.html
Perhaps they were thinking of something more permanent.
Just saying...
i'm more bothered specifically about the situation on the ground and police response. the real question is: will they bring the army/martial law in when the politically correct and constrained police fail to control the problem.
water, canned food and homes in the countryside, bitchez.
You are correct but I noticed how quick the media (BBC) and a few lame politicos needing airtime were to blame `modern media communications` by which I assume they imply that facebook and twitter were used by the `organisers`. As if the British police needed anything else to make them look lazy and inneficient at everything except taking bribes. Which of us will be suprised if these seemingly bottom feeder riots are not in fact an excuse to further curb freedom and expand the police state. Afterall we have not seen any taxpayer unrest yet and that is what our overlords must fear the most. So far unrest has been confined to the `hand out` class, Government empoyees (many of whom have non jobs anyway) and welfare recipients. What I wonder is being discussed that would lead to unbridled anger of the taxpaying classes?
p.s - noted Tyler says QE3 will be announced tomorrow.
@zeropower
no wonder you get on so fabulously with the redneck scum dabolina
wish I could run into you and teach you some manners biatch
wth you'll be dealing with plenty of zombies soon!
he lives in an ivory tower, they are sub-human to him.
I guess you enjoy working and paying taxes to directly support such scum. Or perhaps you don't work, in which case that would make more sense.
Whether its the anti-globalization hippies in the US, the stanley-cup losing winers back in Canada, or the low class hipsters in the UK, it doesnt matter. All the same pile of shit.
You are being paradoxical.
The anti-globalist hippies are actually trying to ameliorate the socioeconomical conditions back in the "scum's" homelands so that they wouldn't have to leave.
Are you kidding me! They are "fighting" for NOTHING, they are simply looting thieves. Turn on the TV youll see what i mean. Unless you think theres a bigger problem with the Carphone Warehouse.
You may think yourself an aristocratic elite, but perhaps you should review the French Revolution and rediscover the road you want to head down.
It's not as simple as you'd like to see it be. Those who have less cushion will be hit first when financial crisis deepens. If you ask any poor fellow in any country what they'd like the answer is work and education, a better life. Some of those people actually do the big leap and move to a country with better possibilities. It's not their fault if a financial crisis hits and jobs go away. Funds then go to protect the needs of the state rather its citizens, who are left to fend themselves.
It's always "the dirty scum", no matter where or when. Back in the dirty factory days the cities were built so that the "scum" lived downwind. It's rather poor decision if you think about it, because of the sicknesses and other counter-productive phenomena which would drag state economy. It's actually beneficial to care for the people.
The world you are living in has been mostly built by "scum", so you should actually be grateful. Of course we agree that criminal acts should be avoided, and by burning properties and causing havoc some of the people on the streets do not appreciate the very work of their kind. There's a lot of frustration and anger that blinds reason.
Yes, it never is so simple. Yes, situations are mostly a shade of grey. But this wasn't about any sort of financial calamity and only about continuing their silly riots from the past 2 days.
As you have placed your point rather eloquently as opposed to other socialists posting otherwise, i have no beef at all with your understanding.
Zero. Your peasant civilians once kicked the Roman Empire off your shores. Do not mess with them.
The DJIA "Stick Save" appears to have started at 3:15 EDT.
MUST CLOSE OVER 11,000!!!1one
Looks like the puck ended up going through the 5-hole....
The goalie got taken out behind the net.... :)
Now going long on collapse:
http://www.collapsenet.com/262.html
maybe paulson will ring you up for advice.
Tyler Durden doing the endzone dance lol
Does this mean we should go "balls to the wall" tomorrow?
London is also unwinding... It is complete chaos here. Fires going on left right and center.
I just cannot keep up with the DOOM today... insane.
Why trade, when you can stack?
ZH
Generating alpha amongst a sea of levered beta momo chasers.
Truth and Knowledge bitchez.
What time is the fed statement tomorrow?
expected as usual @ 14:15 US time
BRING THE PAIN.. on wait.. the PAIN Is here.. good work tyler on covering this great 'unwind' cheers.
Another QE2 unwind idea: Long-Term bonds up 12% during same timeframe.
hahahahaha someone has been getting their face ripped off over the last week, u mad? why not throw in the complaint about tyler not posting about crude's pole-axing, and other assorted pedantic bullshit?
how much are you down? 20%?? more??? trolololololololololol
I have a better one for todays market, learned it after losing my modest fortune through stupidity and Nortel. Buy beer, you will enjoy the beer and the empties will be worth something.
QE3 will not be announced tomorrow.
shhh. if someone is gonna drink as much as tyler, there are times to just let him rave.
tyler called QEIII after the budget deal he nailed, and the market drop, which apparently came dropping to his specs, today.
so, QE III = tomorrow. of course.
at this point, let's just buy tyler the next bottle, together, and maybe a freaking case, tomorrow, if the tooth fairy flies outa his ass, too!
Well just to show how much respect I have for Tyler Durden and ZH I just closed out my positions in SPXU, SQQQ, and SDOW. If Bernanke DOESN'T announce QE3 tomorrow then I'm going to be a little pissed. But hey, I can always buy back into those shorts. As it stands I walked away with a 60% profit. Not bad for about 2 weeks.
shorting? thru ETFs?
who could have seen this coming?
+ for your + for t.d. & ++ for using someone who would blow a 3.0 for a trading indicator!
Haha. Well TD and ZH have proven to be as accurate as it gets over the past few years.
As soon as I saw TD say QE3 comes tomorrow the warning balls started ringing in my war room.
Looking at the charts if QE3 isn't announced tomorrow all of the gains of QE2 will be erased by the time Bernanke is done speaking. August 26th is almost 3 weeks away. Based on how equities have been dropping like bricks, the S&P would easily be under 1,000 by then. Could be under 900.
QE2 forced a portfolio rebalancing into equities, and commodities. But as soon as it ended, everyone rewound that trade.
QE3 will be useless, unless they don't disclose how long they will operate it for. That way, you have a harder idea when to unwind.
Kudos for Tyler! Great calls, especially considering the roller coaster they were called on.
Of course, if one happens to be long physical PMs they haven't done too badly.
That's what I'm thinking too.
Didn't Tyler say repeatedly that QE3 would be announced at Jackson-Hole on Aug 26th?
CYA For QE3
......Now is it time to short treasuries?
Maybe for a short term bounce. Otherwise the FED and US Treasury will conspire to keep rates low. They will never never never never allow rates to rise anything close to what we see in Europe. The FED will print to infininty and buy US Bonds until a complete hyper-inflationary collapse happens.
......
Are we so sure QE3 will be announced?
Unwind into what?
The next good trade? Buying TNX if they announce QE3.
PPT springing into action DOW back up over 11,000 S&P going towards 1150...
11,000 is the new 12,000
They are even recissitating BAC from the dead towards $7 despite the do not recissitate order
After the Downgrade another QE will really start to panick the markets because NONE of the companies really showed a increashe in earnings/profits.
So stocks are worthless, banks are worthless....
I don't think everybody will run back to the stock market like when QE2 was launched. Sure it will rise again but not as strong as QE2 did.
As long as it rises a tiny bit, they got their return on investment in printing. Not hard when your costs are zero!
I doubt it. Give the algos a day of FED induced liquidity and they'll be back to pumping equities. Give the MSM and eCONomists a week of algo pumping and they'll be back to squawking green shoots.
Go PPT Go!!!! MUST.... CLOSE..... GREEN......
seems the great qe unwinding trade is still taking place and is a bit simpler: levered shorting of the s/p.
this is also the great EU unwinding trade however.
Cant they shovel some QE to Canada ? The RB of Canada is a primary dealer. Im short BTW
TSX is dash 500 but the DOW is climbing.
I am losing track of how many pundits and institutions have been out the past week saying "buy stocks now they are cheap" or "don't miss out on this opportunity" or some other snakeoil bullshit.
Talk about everyone on one side of the boat.
WTF, everytime some pundit starts with that cheap stock nonsense,my head wants to explode. The last market downturn in 2008-2009 lasted almost a year. Idiots.
When will the margin calls really start to bite?
Will the real Fed Chairman please stand up?
yeah, Ben will only announce QE3 when the Rothschilds are good and ready.
Move it ALL to the shinny stuff, hide it in your teeth, lace your cakes, land on the moon and don't look back.
Alan Greenspan: We can always print more money
http://www.youtube.com/watch?v=q6vi528gseA
Start up the printing press!
QE cant happen and is not necessary => Cant happen because FED does not have the political back up to do it. Not necessary since without QE, everybody runs to treasuries and there won't be more stimulus that has to be financed by QE. The downgrade of US debt has been discussed over and over behind the scenes and will be used by Obama to put pressure on the republicans to raise taxes.
"Not necessary since without QE, everybody runs to treasuries and there won't be more stimulus that has to be financed by QE."
Exactly, give HPDeskJet a ciigar!
I said a long time ago that when it became necessary equities would be thrown under the bus to prop up treasuries. Now it's happening.
Where is that paper trader that was giving me crap just prior to the downgrade? Got your PMs bud?
:) No PMs for me (yet). I stick to corporate bonds in this deflationary depression + short equity ETFs. I respect the analysis at this site and the comments of most readers, but i prefer to play the game differently. Maybe i will switch to PMs later. My scenario is: 1) I feel there wont be more QE in 2011 and maybe not even in 2012 2) Europe will collapse + ECB will be forced to undo his recent rate hikes. This combined can cause a sharp rally in the dollar, to maybe parity with EUR and will cause PMs to take a serious hit as well. Then i have to see. OR the FED will really loose it, and make US a third world country by printing the dollar to death => buy PMs... OR those fuked up children in congress finally grow up and start to the right things and take the pain => this will create the buying opportunity of a lifetime in equities when valuations become attractive (= dividend yields on the S&P above 6% + Shiller PE < 8)
Anyone seen Robo today?
As a bull blowhard, I'm guessin he's licking his wounds down at the local bar. Maybe you should buy him a round.
He's sleeping with the fishes or finding a new career with his constant stream of bullish stock picks.
i had a thought abt RT earlier, f_uu
acknowledged in the breach. i thought perhaps he was doing the laundry, today, and the bra wasn't dry, yet
Freakin awesome job ZH!
Yeah...
Damned Guido Mantega that struch with the new IOF tax and got me out of the [short Ibovespa (1x) / short USDBRL (1.4x)] trade that I had on just a few days before this huge leg down.
Time to buy fellas. I just loaded up on some GS.
3.7%? I'm happy with my AG at 28%.
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