Despite a very explicit warning by Goldman's co-head of equity trading that the "regime has changed" and that instead of "buying the dip", investors should be "selling-the-rip", so far this morning a global BTFD relief rally has been unleashed from Asia to Europe and the US as traders welcomed a rare respite from soaring volatility.
"The big fear in risk markets is that we get a big CPI print and it validates the narrative that inflation is coming back and the Fed is going to have to move faster."
Beginning in 2013, with the taper tantrum, the Critical Stress Signal has been a remarkable contrarian indicator as it has closely aligned with the timing of central banks either verbally or physically intervening to calm markets. So far, however, central banks are keeping radio silence...
"... a market correction clarifies that we live in a world that is exacting and just, as opposed to a fabricated fantasy. A stock market purge demonstrates that the central planners haven’t entirely broken the markets just yet. Markets still go both up and down."
On Tuesday, February 5th, the Chairmen of the U. S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) testified before the U. S. Senate banking committee regarding regulation of cryptocurrency trading. Both agencies have recently brought major cases against, and issued cease-and-desist orders to multi-million dollar operations.
Last Sunday, following the Friday post-payrolls flush, but before the Monday volocaust, which was the consequence of the concurrent historic vol squeeze of inverse VIX ETF funds, coupled with the sharp deleveraging by CTAs, risk parity and various other quant funds, we predicted that recent events were a "rec
There have been 16 drawdowns of 10%+ since 1976. Of the 16 corrections, only five occurred around a recession. Of the remaining 11 non-recession episodes, 1987 was the only one that turned into a bear market.
After getting absolutely crushed on their inverse vol exposure, retail investors have... doubled down as inflows into inverse VIX ETFs, i.e. selling volatility, increased sharply over the past two weeks.
"If you’re holding cash, you’re going to feel pretty stupid" said Ray Dalio as he was putting the finishing touches on Bridgewater's biggest ever thematic short...
“In terms of using Bitcoin or some of the cryptocurrencies, we are also looking at it, but I’m told the vast majority of cryptocurrencies are basically Ponzi schemes..."
"If we lived in a dystopian world without trust, bitcoin might dominate existing payment methods. But in this world, it seems unlikely that bitcoin could ever be as convenient as existing payment means." - NY Fed
Despite reassurances from Goldman's Jeffrey Curries that global demand is "rock solid," it appears anxiety over US shale production, rising inventories, and questions over OPEC's deal extensions (as well as insanely extreme long speculative positioning) has sparked significant weakness in oil prices...
Equity funds just lost US$30.6bn to outflows. This was the largest outflow on record from equity funds, which just had their record high inflow of US$33.2bn only two weeks ago.
Confirming JPMorgan's "worst case scenario"that forced de-levering in vol-based strategies would lead to retail ETF outflows and create a vicious cycle downwards, Morgan Stanley's Christopher Metli warns that today’s moves lower are likely not being driven by systematic supply – this appears to be more discretionary selling...
UBS Group AG's investment bank is allocating its largest bonus payouts to its highest earners and - in an unusual deviation - its youngest employees - i.e. millennials.
Forget the Trump tax cuts, the Senate budget deal, the Fed's Quantitative Tightening or the coming debt tsunami : after years of dormancy, the biggest catalyst for a sharp inflationary spike has finally emerged, and it is none of the above. Behold: the velocity of money.
"The higher it is, the more systemically worried investors are and the more traders believe a high correlation 'event' is due (typically the high correlation event is a big downturn in stocks)."
