I am the one who knocks

Category archive



Where Are We In The Cycle?

Economists these days are increasingly sure they can “smooth out” the business cycle rather than just forestall the inevitable. They are wrong. And they’ve been proven so time and again. “Smoothing out the business cycle” just means destroying creative destruction thus not allowing the system to purge itself of misallocated capital thereby leading to even… Keep Reading


Central Banks Have “Distorted Classic Frameworks”

A strange thing has happened in the central bank-controlled post-crisis world. Equities have become akin to bonds and bonds akin to equities. That is, the risk is in fixed income, whereas equities have become a shadow of their former selves, exhibiting low volatility and reliable returns. How long will this perversion last? How long, considering… Keep Reading


Here’s What A $1 Trillion Money Market Fund Exodus Looks Like

We’ve talked quite a bit about the money market fund reforms that go into effect next month. If you aren’t familiar, it’s a pretty simple concept. If you’re a prime fund (i.e. not a fund that invests solely in government bonds but instead buys CDs and corporate commercial paper), you’re going to have to start… Keep Reading


A “Bad Day” Looms For Popular Hedgies

What did we say last week in our popular post “Bridgewater Thanks You For Your Service, But They’ll Be ‘Renovating’ You Soon“? Don’t remember? That’s ok, we’ll remind you: “Oh, and get this all wrapped neat and tight before cross asset correlation relegates risk-parity to annals of hedge fund history.” Yeah, well check this out,… Keep Reading

central banks/Credit/Rates

One Trader Explains Where Your “Rear-End” Is Headed

For those who aren’t familiar, one of the most entertaining reads on the Street is Deutsche Bank’s Aleksandar Kocic who writes the derivatives section of the bank’s weekly report on US FI. Last September, he famously referred to the Fed’s admission that global financial markets are part and parcel of the FOMC’s reaction function as “removing… Keep Reading


Stocks Versus Bonds: Who Knows Anymore?

Wow, ok so here’s a Heisenberg challenge. Tell us what’s wrong with this picture that compares the relative attractiveness of stocks versus bonds. Here’s this: (Charts: SocGen) …and here’s this: (Charts: Deutsche) This. Metric (ERP). Means. Nothing. In. Today’s World. And did we mention the S&P is at 18X? Keep Reading


This Is What Happens To Stocks In A “VaR” Shock

We’ve talked here and elsewhere about the effect a rise in rates would have for bond investors who have continually frontrun the perpetual central bank bid. Now, the market is beginning to get a bit jumpy as UST yields rise on fears that Japan will move next week to steepen the curve. Well, thanks to Citi… Keep Reading

1 2 3
Go to Top