Category

Hope all goes well… “You can buy as much insurance as you want in every asset class,” said Roadrunner, pecking at a pile. “In a few weeks, we’ve swung from the end of the world to the end of volatility.” Markets overshoot on the downside and upside, vol is no exception. “They’re getting over confident, they’re recklessly selling volatility.” The market’s biggest vol trader glanced left, right, overhead. “I’ve turned

Hope all goes well. Dusted off an anecdote from 2013 about doing silly things. Back next Sunday with full wknd notes. Week-in-Review (expressed in YoY terms): Mon: Rumors IMF pressing China for currency operation transparency, HK CPI +3.1%, UK house prices +7.6%, Saudi Arabia CPI +4.2%, Russia unemploy 5.8%, Russia retail sales -5.9% (wages -2.6%), Swiss M3 +1.7%, EU CA surplus E25.4bln, EU cons conf -9.7 (exp -8.3),

Hope all goes well… “You know what I wish Daddy?” asked Charlie, eyes reflecting rainbows. It had been quite a morning. His trap failed to catch the Leprechaun. The lucky little guy stole the gold bait and got away. Mara left tiny emerald footprints to track his path. The Leprechaun had failed to flush. Charlie discovered the toilet water colored Irish green. Then we all sat down to examine the flaws in this year’s t

Hope all goes well… “What’s the difference between the Chinese driving a massive short-covering rally in the miners and the ECB doing the same with European banks?” asked the CIO, heavily long the latter, not waiting for an answer. “Nothing.” Glencore bottomed at 69 and now trades 142. The Euro Stoxx banking index bottomed at 95 and now trades 115. “Are people right to be short miners over the long-term? Yes. Are the

Hope all goes well… “Markets provide no explanations,” said Yoda, basking in St. Barts. “They provide prices.” Yoda walked the remote beach, waves advancing lightly up the sand, leaving small traces at each apex. “Illiquid things are impossible to sell when markets decline, so people hedge their risks with whatever they can.” S&P 500 futures, the Russell, ETFs, indexes. “When markets turn higher, these hedges adv

Anecdote: Iran’s hardliners were savaged. Reformers and moderates dominated elections. The theocratic revolution ageing, tiring, falling victim to time. Yielding to youth. Unleashing Persia’s potential, promise. The pendulum. Mao’s revolution in reverse, comrades stealing from comrades on a scale unimaginable. Chinese communists arrested 9,000 fraudsters; another week, another roundup. Beijing desperate to restore ci

Hope all goes well… “Bottom line is we basically accept things are gonna get tougher,” said the CIO, Down Under. “Hence the pessimism,” he continued, surveying the distant horizon from a superannuation summit. The world’s great fortunes have all been built by unabashed bulls. Australia’s no exception. “As you know, necessity is the mother of invention and we’ll ultimately pull through with flying colors.” Despite tod

Hope all goes well… “So here’s the question,” said the CIO, “Is pouring over balance sheets, or knowing when to pour over balance sheets, the most important thing?” I considered the profound struggle of so many legendary stock pickers that began just as the age of central bank omnipotence drew to a close. “It’s the latter,” he said, uninstalling Excel, waiting patiently for dislocations to buy, short-covering rallies

“A marketing decision!” cried the FBI, furious with America’s greatest marketer. Of course the Bureau’s right. Apple’s decision to withhold an encryption key is all about pushing product. Tim Cook doesn’t love terrorists, he just hates missing sales forecasts. He knows we all hate being spied on, even though we love feeling safe. So we distrust those who protect us, up until we face a crisis. When it all reverses, an

Hope all goes well… “Do we now know?” asked Yoda, high in the Rockies. “Is this where QE leads?” he whispered, gazing at distant peaks, summit winds lifting their white, painting the blue. Then vanishing. “Is folly not beautiful too?” he asked, closing his eyes, growing quiet. I considered this historic ascent, led upward by so much central banking novelty. But with European stocks now 28% below their highs (17% belo