Oct 23 18 SIT
EC y POL
ND denounce Global-neoliberal debacle y propone State-Social
+ Capit-compet in Econ
ZERO HEDGE ECONOMICS
Neoliberal globalization is over. Financiers know it, they
documented with graphics
Economic situation today:
Global Central Bank balance sheets
have never fallen this much (almost one trillion dollars in six months)...
See Chart:
This is
the worst start to a year since 2011.
As the US markets start to catch
down to the rest of the world...
See Chart:
Nasdaq even briefly managed to get
into the green (after being down 2.75% in early trading!)
See Chart:
Futures show the fun and games
best... Cuando se acercan las Elec ourren milagros?
See Chart:
NO
MIRACLES in OCT: En octubre no hay Milagros.. lo dice la data fría:
It's been an ugly month that got a
lot worse today before the panic-bid...
- Small Caps lowest since April down 12.5% from highs.
- Dow Transports lowest since April - down 11.7% from highs.
- Nasdaq lowest since May - down 8% from highs.
- S&P lowest since May- down 7% from highs.
- Dow lowest since July - down 6.5% from highs.
Small Caps
went red for 2018 intraday today...
See Chart:
After the
first hour which saw nothing but selling (no positive TICK until 1030ET),
markets began to accelerate with huge positive TICKs in the last hours...before
some serious late day selling hit...
See Chart:
And in
case you wondered - yes it was a giant short-squeeze... BUT, see the red twist
See Chart:
VIX was
monkey-hammered back down to spark some momentum in stocks (but the VIX term
structure inverted further on the day)
See Chart:
The Dow ramped all the way back to
its 200DMA but none of the other majors did...
See Charts:
Partial miracle: return to yesterday FANG stocks were miraculously bid back into the green...
See Chart:
The same with S&P financials. Financials
hit 13-month lows today, confirming the massive double-top..
See Chart:
Treasury yields staged a v-shaped
recovery on the day but did end lower...
See Chart:
The Dollar ended the day lower,
fading notably after China closed...
See Chart:
Finally, with
President Trump's approval rating at record highs, will that mean another
leg higher for the dollar?
See Chart:
And given President Trump's hate of
a strong dollar, will be pushing for a lower approval rating?
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"...these are the sure
signs that the collapse is near. Yet, the mainstream is completely oblivious because they have no
idea there’s a problem..."
A potential catastrophe could occur when the current
economic bubble bursts and Peter Schiff has been warning of this for a while
now. The signs of
economic distress are finally showing up as
global markets tumbled Tuesday with European
stocks touching a two-year low while United States equity futures are
deep in the red.
See Chart:
Read more at:
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The longer
an asset is pegged, or manipulated, the larger the imbalance and ultimately,
the larger the break. And nothing has been suppressed more than the price of
money.
I have long believed the next financial crisis will not
emanate from risk assets, but instead will result from governments losing
control of their bond markets. I am a big fan of Bill Fleckenstein’s line:
Central
Banks & Govts will keep printing money until the bond market takes away the keys
Sure, we will have risk hiccups as Central
Banks attempt to normalize rates and monetary policy, but the big one -
you know, the one no one is prepared for - will occur
when easing causes the long end of the yield curve to sell off hard. At that point, there will be no easy answers
for politicians and policy makers. That’s the end game.
Bond vol
is dirt cheap
How does this translate into an actionable idea?
Let’s first have a look at U.S. treasury bond volatility and
see if everyone else has already discounted this view.
See Chart:
What the
wise do at the beginning.. fools do at the end Warren Buffett
We have hit the point where shorting bond vol is a dangerous game.
But how do
you buy bond vol?
Richard-Dreyfus and let it ride. If the futures closed more
than 1 and 1/32nd away from 118, then it would be profit. Anything closer to
118 would be a loss.
See Chart:
But that’s not what we are trying to accomplish. We want to
be long vol and delta hedge it so that regardless of the ending value of the
underlying future, if the historical volatility during that period is more than
the implied volatility that we paid, we win.
Now comes the next little option
trading nuance.
We are getting long volatility because we think the
market is underpricing the future volatility of the underlying. Therefore,
why would we use the current implied volatility estimate to calculate our
hedges? I don’t get this rookie mistake too many option traders make. Don’t let
your greeks be implied from the market prices. If you do that, you will be
allowing market vagaries to affect your hedging.
Our option straddle is trading at approximately 3.7% implied
volatility, but I think it is worth at least 4%, so that’s what I am sticking
in my model.
How did I come up with that?
It’s a fair amount of guessing, but
this chart might help.
See Chart:
You can see that volatility has
rarely been this low, and 4% is a chip-shot. Especially with all these
catalysts on the horizon.
Plugging the 4% vol into the option calculator comes up with
a delta of 49.225 for the calls and -50.5654 for the puts. Therefore on our
10,000 lots, we end up having a delta of
10,000 x 49.225 = 4,923 long
10,000 x -50.5653 = 5,056 short
10,000 x -50.5653 = 5,056 short
To delta hedge, we need to buy an
extra 142 contracts. We will do that at 117’31.
There we go. That’s the position. I am going to monitor it
and put in the delta hedges at every close. I will also calculate the P&L
to walk you through how it works.
Please come back and join me on my experiment of maintaining
a large long bond vol position in real time. Updates will occur between 4 and
5pm EDT.
Thanks for reading,
Kevin Muir
Kevin Muir
….
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"Customer traffic has moderated.
There is a little bit more of a pause because of the higher interest
rates."
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US
DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds
& corruption. Urge cambio
In other
words, if Democrats win the House .. no tax cuts for you...
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Surely this
will affect arms sales...
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“The central issue is we’re developing into a plutocracy... We’ve got an enormous number of
enormously rich people that have convinced themselves that they’re rich
because they’re smart and constructive..."
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"Yes..." the chance of war "is real — andmuch more likely than is generally recognized" - Harvard's Graham
Allison
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“We know today that some of what is driving congenital syphilis are women who are trading sex for drugs and
that that explains some of the infections
we are seeing in babies of syphilis,”
The focus of concern
is with syphilis, gonorrhea, and chlamydia.
See Chart:
….
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SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO
..Focus on neoliberal expansion via wars & danger of WW3
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RT SHOWS
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NOTICIAS IN SPANISH
Lat Am search f alternatives to neo-fascist regimes &
terrorist imperial chaos
REBELION
Es Trump un ser humanista y no nazi como cree
el Aut del Tit Orig?
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ALAI NET
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RT EN ESPAÑOL
Ya están dentro
y posible voten por los REP.. si se prueba eso, los votan
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Keiser
Report "La teoría del efecto goteo y la
deuda de EE.UU"
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COUNTER
PUNCH
Analysis on
US Politics & Geopolitics
Patrick
Cockburn The
Middle East, Not Russia, Will Prove Trump’s Downfall
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Henry Giroux Neoliberalism
in the Age of Pedagogical Terrorism
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that leads to more
business-wars from US-NATO allies
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DEMOCRACY NOW
Focus on Trump policies & the Econ & Pol crisis
inside US
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PRESS TV
Resume of Global News described by Iranian observers..
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US
gradually escalating threats to China: James
Petras
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