Market’s Pandemic Obsession Grows, As Pestilence, Fiscal Failure Overshadow Biden Bounce

Market’s Pandemic Obsession Grows, As Pestilence, Fiscal Failure Overshadow Biden Bounce

US equities tumbled in early trading Wednesday, as the yo-yo swings. You can expect this manic price action to continue, at least for another week or two. "The coronavirus fears have put an end to the long-lasting equity up/vol suppressed loop", SocGen wrote Wednesday, in a volatility update. "The sharp drop in equity prices on 24 February sent the dealer positions deep into negative gamma territory, leading to daily amplitudes not seen since 2011". Virus concerns are front and center, and ver
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3 thoughts on “Market’s Pandemic Obsession Grows, As Pestilence, Fiscal Failure Overshadow Biden Bounce

  1. In case you’re interested (or have always secretly wanted to be “just like Recep”), FLIR Systems sells a thermal imaging attachment for the iPhone, buy it online for $399. Not a bad deal for the sufficiently worried. Isn’t that what a box of masks costs these days?

  2. No way to measure future earnings flows and losses while mkt crashes in next 6 months and meanwhile vix/10 yr Treasury ratio over 70 is highest in recorded history. So jumping in and playing day trading cool guy is like jumping off a skyscraper without a chute

  3. One of my good street friends hedges an MBS whole loan conduit portfolio for an originator. He has traded government bonds for 35+ years. He told me that the spread on long bonds this morning was 1/2, normally it is 1/64. He told me for a short time this morning there was no bid for bond futures on the futures bond this morning- he said never saw this in his career. Libor/OIS swaps are widening. Credit spreads are widening. Most ominously stocks and US Treasury bonds are going down together and nothing else is really up- gold and the $ are essentially flat today…. meaning correlations are trending towards 1. In my view, the US government and FRB have until Monday’s open to put out this building market forest fire or we will be in another full blown financial crisis. First liquidity goes then credit follows as a knock on….. The President and Congress need to act pretty quickly…..

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