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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (185858)	3/30/2022 11:36:51 PM
From: sense	Read Replies (2) \| Respond to of 218057

Have mulled it a couple times over... A couple of related recent ZH posts worth folding in... Is The Move In MOVE About To Rock The VIX and More Massive MOVEs But, what I come up with is not very satisfying, thus far... even if I think I know why it isn't... And, that boils down to a couple of issues I've noted as increasingly relevant over the last few weeks... There's "the usual", of course in... new all time highs coming next week... or... the market crashing next week... and that element of decision that's required in cutting through the noise to "get it right"... always entailing risk... while "the usual" always includes a lot of purposeful misdirection... that very often coming from the Fed... That there is de-risking occurring as a choice... suggests one of two or three things: either that people aren't capable of or don't want to bother with making the effort in sorting through the noise... or, it suggests they have done that sort... and determined the array of risks requires them de-risking... or ??? Every trade has an obvious enough counter trade... so, if you look at it and simply can't tell if you want to be long or short... you opt out of playing. What I see occurring in the punditry these days... is "span of control" issues... If you focus on "the things you normally consider in evaluating bond trades"... but, don't properly consider... stock market risks, hot war risks, currency war risks, trade war risks, inflation risks... what insane thing Biden just did or said and whether or not that requires a nuclear response from Russia... and/or what it means for recession risks that are independent of monetary policy.... what new craziness Putin cooks up in response to sanctions, the timing of its delivery, and what that probably means about accelerating recession risks independent of monetary policy ? Layer in all the usual considerations in the econometrics... and then try to discount the portions of the metrics being announced that are patent lies... while still correcting properly for the degree in which people will be fooled by the lies and act as if they are true... or not ? I've seen a lot of efforts made recently in which an author adopts such tunnel vision in considering the "usual" that he totally misses... "yeah... except that input from over there means that's irrelevant now"... With so many moving parts... there's going to be be a limit in how well you can sort it all... without missing the elephant in the room... From that perspective... I think it might be useful to fall back to the comparison charts... because... as I noted here... volatility is a mean reverting phenomena... and that's what makes comparison a powerful tool... is that it shows you both alignment of and misalignment in or re-alignments of things from what was the expected in relation to the mean... as convergences to and divergences from the mean occur in time series showing those relations... That a reversion to mean is occurring... or a sudden divergence and realignment... isn't in itself a problem... It's only a problem when suddenly "this goes with that"... doesn't any more... and that drives things to not work as they did before... or, as they are expected to ? I suspect there have been a couple of trend reversals or divergences occurring with the latest mean reversion in stocks... that I haven't properly parsed, yet... And, its probably worth looking for evidence of the misbehavior of those elephants... where its certain that there are a few that have snuck into the room... I've not found proper proxies for some of that, though... as I can chart VIX related things well enough... but don't have well considered "MOVE" proxies... or ready ability to chart metrics other than price in comparisons... There are a couple of things that are "automatic" outputs though, I think... many of which I suspect are, for others, large sources of perceived noise... as their existence drives cognitive dissonance... MOPE... of course... and all the parallel abuses of language, and the misdirection applied, in misallocations or transfers enabled under the rubric of QE. I don't expect the banks to be willing to cooperate in being forced to pay it back... but think they might prefer to work to destroy the system first, in order to keep it. Inflation is not going away... but is really only getting started... with Russia related oil impacts "baked in"... but not yet beginning to be recognized... while market functions enabling anticipation of them have been obstructed... The inflation is not primarily being driven by the money printing... but by supply chain disruption... or supply shortages being imposed. It's been building for some time... first as a Covid function... and now as Biden's war on oil... which is just one of the products in our supply chains that's particularly critical... Waging War On Fossil Fuels Enflames Inflation That Biden's war on oil has been ongoing for a year... while Russian actions have been elevating prices for a far shorter time... suggests what we see now is the Biden legacy impact, only, and what the additions from Russian sanctions impacts will be... that is all still coming as additional (lack of) fuel on the fire... that will have impact that only begin showing up in the next two weeks. The money printing doesn't do anything useful to slow it down, of course... but exacerbates it... as it gooses the supply of money chasing after those finite few hings already in shortage... as you can't print "supply" of anything but money... The oil price functions as an interest rate proxy... so higher oil prices also substitute for higher rates as a brake on the economy... making it a puzzle why they'd SAY they need to be more aggressive on rates... while preventing market functions in oil from allowing oil prices to rise higher... to what market perception of risk suggests is rational... to ensure price enables a proper distribution... The Fed's policy per last Powell speech... is to kill the inflation by killing the economy... forcing it into recession until the inflation stops... as without "excess demand growth" there will not be inflation... so they will use "powerful tools"... not interest rates... to kill demand... ? Ie., they're using market manipulation to impose "price controls"... which can only and will have the exact opposite of the intended effect. Unless they intend to make things worse... which you have to suspect is probably true given the accumulation of evidence in overlapping instances... And, that doesn't change that it is both wrong... and brain dead stupid... if right in the limit that... denying you food will, in time, force a reduction in your future demand for food... only without ever solving problems in the unmet need for food by "reducing demand" for it. It is clear enough already that the policy being pursued now... will lead to food shortages and starvation... and they're not shying away from fostering that awareness... or doing anything to prevent it... Given the threat to derail the global economy, and kill it if necessary, in order to effect the cure for what's wrong with it (from their perspective) in insistently demanding too much (that they are now ensuring they are unable to deliver)... you have to determine... are they that seriously deranged and stupid... or are they just lying to us, again... while planning on doing the exact opposite of what they say... as per usual ? Or, only lying to us about not intending what the policy they are imposing will deliver in result. And, it is in that context that you have to notice... Biden apparently doing all he can to gaffe his way into initiating WW III... while the media continue to ignore that he has been deliberately attacking the two primary pillars that are the foundations of the dollar's legitimacy... "integrity" and trust in dollar reserves being there... and the purposeful attachment of the dollar to the global trade in oil... Saudi Op-Ed Warns America "Dismantling Pillars Of Own Empire" That makes the problem of the lack of liquidity in the bond trade... into a question about the source of the lack of interest in participation... even with rates already rising well out ahead of Fed intent... As a "dog that didn't bark" story... the problem is that there are a LOT of different reasons that the dog might not bark... each of which are equally valid reasons for his silence... so the lack of barking doesn't actually allow you to draw any particular conclusions about which cause it might be that is actually responsible... Did Russia Intentionally Trigger A Monetary System Reset? And, that generates "rate" arguments about the pace at which this or that influence is more likely to matter ? The Global Rush To Own Gold Has Only Just Begun Perhaps converting forced price dislocations in oil and gold... into time constraint functions... will help resolve some correlations in the trade in other things... but, I think the time function "works" based on the occupancy of time by sufficient volume... and without volume... the time becomes a vacuum... just as it does when price is artificially constrained... Perhaps that captures some of the complexity that seems it is baffling others... while arranging it a way that allows it to correlate reasonably well with timelines and events ?