Follow The (Convexity) Flows: Restriking Of The Fed Put Revisited
“In that environment, convexity withdrawal creates a reinforcing loop where more turbulence in risk assets tends to cause stability in fixed income.”
“In that environment, convexity withdrawal creates a reinforcing loop where more turbulence in risk assets tends to cause stability in fixed income.”
Make domestic equities volatility again. #MDEVA
“I think we are just in the middle of a correction. And I think, overall, the structural story is still pretty positive. But this is a correction that may not be over yet.”
Listen, you people are concerned about 10Y yields, and that’s fine. After all, we blew threw the February highs this week on the way to the “dreaded” 3% “pain threshold” and while there were no swarms of locusts and no Pazuzu sightings (that I’m aware of), there are still concerns that the higher we go, the closer we get to a situation characterized by “diversification desperation” or, more simply, a scenario where bonds and stocks selloff in tandem.
We gotta get out of this place.
K.I.T.
As a reminder, this has already cost Deripaska nearly $4 billion in personal wealth.
“For the first time since the start of 2016 (when the risk-on phase started), dollar liquidity has rolled over.”
That’s one “very cool” holding pattern.
And so the debate continues.
As usual, lots on the docket.
Aaaand that’s the week, folks.
The spillovers will be “tremendous.”
Well, that was interesting.
“Yet, like all good things, it eventually ended.”
Beleaguered banks, commodities on the come up, golf, the usual…
Who’s “tired of winning”?
“…I just don’t think they’re going to be realized.”
And it’s only Monday.
“Annette, Annette”…
This debate is obviously crucial for the market going forward. Everyone is acutely aware of how important it is for tech high-fliers to avoid an Icarus moment until we finally see the fabled “rotation” back into value or, more simply, until another sector proves it’s capable of taking the baton in this aging bull market.
All you can do is laugh.
“We think it is overdone and has created opportunity for long and short term investors.”
Waiting game.
“Get ready.”
“In the next recession, I would expect the P/E to bottom at about seven times, a lower low with earnings about 30% lower because of the recession. That would put the S&P lower than the 666 low of the previous crash, versus 2671 Thursday afternoon.”
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