Risk Management

Tyler Durden's picture

Frontrunning: July 1





  • Tsipras backs down on many Greece bailout demands (FT)
  • Creditors skeptical of Tsipras' offer (Reuters)
  • Greek Pension Rationing Begins; Poll Shows Tsipras Backed (BBG)
  • Greek referendum poll shows lead for 'No' vote, but narrowing (Reuters)
  • Greek Bank Controls Heap More Pain on Crisis-Weary Citizens (BBG)
  • Greek Crisis Ripples Across European Companies as Markets Swing (BBG)
  • China Stocks Fall: Shanghai Composite Index Drops 5.2% (BBG)
  • China June factory, services surveys fuel hopes economy leveling out (Reuters)
  • Some Chinese Are Taking 22% Margin Loans to Finance Stock Purchases (BBG)
 
Tyler Durden's picture

Technically Speaking - Bears Are Winning





Whether, or not, a Greek exit from the Eurozone or a potential debt default is "the thing" that sparks the next major correction in the markets is unknown. Historically, such a widely "known" event is generally already factored into the markets and has much less of an impact when that event eventually comes to fruition. As Art Cashin suggested this morning: "I think China may be more important than Greece. Stick with the drill – stay wary, alert and very, very nimble."

 
Tyler Durden's picture

The Instability Of The Global Game Of Central Bank Chicken





There’s a specific sort of instability in the world today – a game theoretic instability – which means that it has an identifiable pattern and rhythm you can understand in order to improve your investment strategy. It’s the instability of the game of Chicken, and once you start looking for it, you will see it everywhere here in the Golden Age of the Central Banker. Greece vs. the Troika? Chicken. Western sanctions on Russia over the Ukraine? Chicken. OPEC vs. US energy producers? Chicken. ECB vs. the Swiss National Bank? Chicken. Fed monetary policy communications to markets? Chicken. Abenomics? Chicken. US policy towards China? Chicken. ISIS vs. the world? Chicken.

 
Tyler Durden's picture

Black Box Trading: Why They All “Blow-Up”





Strong Conviction + Low Volatility + High Levels/Low Costs of Leverage [irrespective of Dodd-Frank] + More Absolute Capital at Risk + Increased Concentration of “At Risk” capital + “Doing the Same Thing" = combustible market cocktail.

 
Tyler Durden's picture

"Calm Reigns" Everywhere As Greece Inches Closer To Default, China Crashes





European shares remain higher, close to intraday highs, with the autos and travel & leisure sectors outperforming and basic resources, utilities underperforming. Meeting of finance officials to reach a deal over Greek aid ended in frustration, forcing leaders to call for an emergency summit for Monday. ECB plans to hold an emergency session of its Governing Council on Friday to discuss a deterioration in liquidity at Greek banks, three people familiar said. German airwave auction raises $5.7b to top 2010 sale. Bank of Japan leaves monetary policy unchanged as forecast. Shanghai Composite Index capped its worst weekly decline in seven years.

 
Tyler Durden's picture

Warren Buffett And Weather Forecasts





"Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the "hamburgers" they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."

 
Tyler Durden's picture

How To "Measure" Risk





While investor behavior hasn't sunk to the depths seen just before the crisis, Oaktree Capital's Howard marks warns, in many ways it has entered the zone of imprudence. "Today I feel it's important to pay more attention to loss prevention than to the pursuit of gain... Although I have no idea what could make the day of reckoning come sooner rather than later, I don’t think it’s too early to take today’s carefree market conditions into consideration. What I do know is that those conditions are creating a degree of risk for which there is no commensurate risk premium."

 
Tyler Durden's picture

5 Investing Myths Debunked





There are many half-truths perpetrated on individuals by Wall Street to sell product, gain assets, etc. However, if individuals took a moment to think about it, the illogic of many of these arguments are readily apparent...

 
Tyler Durden's picture

Why China Is So Desperate To Blow The Most Epic Stock Bubble





The Shanghai Composite is on the verge of 5,000 and has more than doubled in the past year but this may just be the beginning. The reason: if the Chinese stock bubble bursts, that will be the beginning of the end of the greatest con game in history.

 
Tyler Durden's picture

Bond Bloodbath? Putting The Jump In Rates Into Perspective





Some folks have been dumpingglobal bonds again today (after disappointing retail sales in the US). But, can we just put the recent bump in interest rates into some perspective? Will the "bond bull" market eventually come to an end?  Yes, eventually. However, the catalysts needed to create the type of economic growth required to drive interest rates substantially higher, as we saw previous to the 1960-70's, are simply not available today. This will likely be the case for many years to come as the Fed, and the administration, come to the inevitable conclusion that we are now caught within a "liquidity trap" along with the bulk of developed countries.

 
Tyler Durden's picture

Myth Or Reality: "Sell In May"





There is little advantage to be gained by being aggressively allocated during the summer months. However, in reality, there are few individuals that can maintain a strict discipline of only investing during seasonally strong periods consistently. Also, time frames of when you start and when you need your capital for retirement make HUGE differences in actual performance. However, a willful disregard of "risk" will inherently lead to the destruction of the two most precious and finite assets that all investors possess – capital and time.

 
Tyler Durden's picture

China Stocks Tumble Most In 4 Months; Australia Cuts Rates To Record Low





Yesterday, when we heard that China brokers may impose tighter margin requirements to contain what is now a laughable stock bubble we said that tonight's Shanghai session could get exciting: "China may get exciting: Some China Brokers Raise Margin Trading Requirement: Sec. News" It did: overnight the Shanghai Composite tumbled by 4.1% to under 4300, the biggest one day drop since January 19.

 
Phoenix Capital Research's picture

If Gold Is Not Money… Why Do Clearinghouses and Former Fed Chairs Say It Is?





Take note, Gold is officially money for the most powerful entities in the world. They are not only accepting Gold as collateral but are openly trying to insure that they have their own Gold in safe custody.

 
Tyler Durden's picture

Cyber-Attacks Are The New Cold War





Warfare today (and in the future) is (and will be) fought differently.  In the 1950’s with the creation of more destructive bombs and weaponry, the idea was ‘Mutually Assured Destruction’ (MAD).   The movie War Games helped us learn that there are no winners.  The warfare ideology today is ‘Multilateral Unconstrained Disruption’ (MUD).  This unrestrictive warfare is meant to disrupt societal functioning; to ‘poison’ information to elevate distrust of all computer information. Cyber-activity is the new ‘cold war’.

 
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