TheoDark Report
Bond Markets Are Feeling the Fear
Bonds are showing a higher volatility than the overall stock market. Let's see how this impacts the financial stocks and our current positions...
Category: TheoDark Report
TheoDark Report
“Wait-And-See” Week Off To Aimless Start
Well, what can you say about Monday? We shot a terrorist, subsequently captured him, and GM got a key upgrade (USA! USA!). Other than that, it’s an aimless session. After a fast start, stocks drifted lower, then rebounded a bit, and then… you get the idea. The problem, apparently, is oil. Have a loo
TheoDark Report
Previewing A Big Week: Fed, BoJ On Deck
Ok, so next week is obviously critical. We’ve got the FOMC and the BoJ and as we’ve tried to emphasize, the BoJ may actually be more critical than the Fed. The Fed has plenty of reasons to go “full-Brainard” as it were and forestall a second rate hike. They’ve got a weak non-manufacturing ISM number
TheoDark Report
Irrational Complacency
Ok, so two things to wrap the week: bond yields and volatility. Both have been suppressed by central banks. Here’s what Citi said on August 30: “We have written recently on the distortionary effect of central bank action on asset prices. One of the most jarring manifestations of this is the persiste
TheoDark Report
Deutsche Bank On The Brink, Refuses To Pay Department Of Justice
We’ve long documented the sad if sometimes comical demise of Deutsche Bank, the German behemoth that’s become synonymous with, how shall we say, “unscrupulous” business practices. The company replaced its co-CEOs last year including Anshu Jain, a man who a BaFin (that’s the German financial watchdog
TheoDark Report
Suddenly, Everyone’s Talking About VaR Shocks Again
We’ve talked quite a bit lately about systematic strategies and about the dangers they pose to markets. We’re talking here about CTAs (trend followers), risk-parity, and vol. targeting. We dodged a bullet around Brexit when it came to CTAs. Here’s why: (Chart: BofAML) What that shows is that CTAs we
TheoDark Report
“They’re Just Too Polite And Timid To Say What The Wanna Say”
Well, we got a spate of good/cop bad/cop economic data out this morning. Jobless claims were basically in-line, but if you you’re a Lael Brainaird type and you’re looking for excuses not to hike, you can probably find a reason or three in the retail data, which missed, casting doubt on the supposed
TheoDark Report
Loss Of Control?
Think central bankers have “lost control?” Think again. Consider this headline from Bloomberg: “Latam currencies find some stability after volatile NY session, finishing Monday stronger as U.S. equities rise, dollar weakens and UST yields are steady; dovish Brainard speech helps calm market, with Me
TheoDark Report
In Monday’s Main Event, Brainard Takes Aim At Hawks
Well we knew it was going to be all about the Brainard, so we figured we might as well wait and see if the uber-dove gets hawkish. Here was Barclays pre-speech take: “Federal Reserve Governor Lael Brainard is scheduled to speak on the state of the US economy on September 12. Her speech is a