Melt-Up Paranoia Manifests In ‘Incredibly Abnormal’ Dealer Positioning

For the better part of a dozen years, the implicit message from central banks to investors was: Be long assets. And with leverage, if you like. That changed when inflation took off, and for most of the tightening cycle, key investor cohorts were on-again, off-again under-positioned, leaving some to chase the market higher during melt-ups. Late last year, I suggested (repeatedly, and typically in the context of frequent reminders from Nomura's Charlie McElligott) that flat skew evidenced the sa