Monthly Archives: February 2010

Hedging short book by selling puts

Something like 17 of the last 19 Mondays have been up days in the market, with 80% of the market’s rally from March 2009 lows being accounted for by Monday moves. Though the rally’s reversal may unwind some correlations, including … Continue reading

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Trade 6: Short FCX

As I stated in an earlier post: A note to readers: I was deciding between this and Freemont-Mcmoran Copper & Gold (FCX) as my third posted trade. FCX is also a high beta commodity name with big gains since March. … Continue reading

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Risk assets fall as carry trade unwinds

The QE sugar daddy is gone and with it seems to be departing the never-ending barrage of USD-carried yield chasing that characterized post-March 2009. The Dollar Index traded up 0.75% to 80.15 today, breaking the 79.70 resistance level. We expect … Continue reading

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In defense of the TBTFs, or the true originators of moral hazard

Written by Naufal Sanaullah (University of Michigan) & Mohammad Ali “Qasim” Khan (Duke University) There is a certain increase in comfort in defending one’s more controversial beliefs after events transpire that vindicate one of these non-mainstream opinions. Contrarians and conspiracy … Continue reading

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The imminent round 2 of the foreign bank dollar funding crisis, or the EUR/USD squeeze redux

The Federal Reserve’s dollar liquidity swap extensions saved foreign banks in H2 2008, particularly in Europe, as foreign bank balance sheets faced big losses in USD-denominated securities, with no recourse of injecting new dollar liquidity to stem the tide of … Continue reading

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“Extraordinary Popular Delusions & the Madness of Crowds” still not available on Kindle

Though millions of people are buying Kindles, the Charles Mackay classic is still unavailable in Kindle edition. (Click here to request the publisher to do so). Evidently Kindle buyers are busy reading Jim Cramer’s books, which are ever-so-conveniently already available … Continue reading

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Bye-bye January

SPY continues its decline off of its January highs. The 107 level could act as important support, and marked September 2009 highs and November-December lows. Volume is picking up and the 50DMA remains broken, so keep watching for further decline. … Continue reading

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