Behold: The ‘Powell Effect’ On The World’s Most Popular Investment Grade Credit ETF

Behold: The ‘Powell Effect’ On The World’s Most Popular Investment Grade Credit ETF

It's hard to believe it was less than two months ago when the US corporate debt market was pushed to the brink by a combination of the COVID crisis and the onset of a short-lived oil price war between the Saudis and the Russians. To be sure, there's a sense in which the dark days of late March feel like just yesterday. Epochal shocks and the multi-standard deviation market events they often produce aren't easily forgotten. This crisis will be enshrined in the history books, and the anomalous pr
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8 thoughts on “Behold: The ‘Powell Effect’ On The World’s Most Popular Investment Grade Credit ETF

  1. Powell has faced his reality as a warrior. History will come to say many things about him, but his initiative and wide scope of the moment certainly will not be faulted. He is a strong leader.

  2. This article gives lots of insight for a neophyte who is willing to dig into the details. I had never heard of the Hui-Heubel ratio measure of market depth. I am able to search for an article describing the equations and now understand the basis behind the estimate. Thank you for sufficient detail to allow me to educate myself. Often I struggle to understand the words and terminology you write in and no one will respond with a pointer how to figure it out. I find that the largest shortcoming of this resource.

      1. Myself, I like it. I have to do a little work on my own part to understand a lot of it. But I like to learn new things every day.

        If H had to explain everything he writes it would look like a research paper with 10 pages of footnotes written by a geek pedant.

        1. It’s a trade off. If I included explanations (even short, colloquial ones) for everything, the posts would be cumbersome, and the tone would change. They would become redundant for a large number of readers even as they would simultaneously become more useful for another large group. I try to strike a balance in the vast majority of the posts, but sometimes it’s just not possible.

          Also, keep in mind that it takes, on average, around 18 hours per day to produce the content that appears here on weekdays. On weekends I spent roughly 12 hours per day on it.

          If I tried to explain each and every “technical” term or concept in a way that would ensure 100% of readers understood it, I would be spending 24 hours per day, every day.

      2. I often have the same issues but I learned to bookmark Investopedia and use Google to the fullest, and I have a PhD in this stuff (albeit, 50years old). What I have come to understand is that the level of the investment markets that H deals with, observes, and writes about bears no real resemblance to the market segment we retail “punters” populate. After all, the notional value of just the big bank share of the derivatives market is something like six times the size of the annual global GDP. When your Benjamins are not hundreds but billions the realm of finance is just too different to deal with in common terms. My main takeaway from H is not what stock to buy but what the big guys are likely to do to us ordinary citizens while they try to provide a profitable playing field and a stable financial environment. There’s an old Indian saying, “When elephants fight, the grass dies.” We’re the grass.

  3. You have provided little insights over the years as to what motivates you to spend the time and effort that you do – to research, write and publish.

    However, you remain an enigma- a term I am using in the most respectful and appreciative sense of the word.

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