Beware markets exhibiting low volatility and complacency. As markets rise steadily, investors with profits can protect their profits by buying put options. They tend to do this at key technical levels on broad market indices. Option counterparties do two things. They either act as middlemen, selling puts to investors seeking protection and buying puts from

What will the Fed do?   The Fed might raise rates in September because: It wants to reset a policy tool. It honestly thinks that inflation is a future risk and that the labour market is sufficiently healthy. It has signaled to the market that it wants to raise rates and if it doesn’t the

If you sold in May and went away you’d have been back in July, re-established positions and got your throat slit in August. The S&P and broad equity market benchmarks have lost some 10% in a week, most of it in a couple of days, Europe has done slight worse, down some 12%, and China,

The fact that the Fed Funds effective rate is 15 bps and not 25 bps is reason enough not to raise rates. Central banks should refrain from moving rates about as they see fit. For one, their understanding of the economy is no better than anyone else’s. How can one make interest rate policy amid

Discretion is the better part of valor. I began the year still bullish on China domestic equity markets. The thesis was founded on a number of factors. Low inflation and slowing but still positive growth had led the PBOC to significantly expansionary policy. This policy was widespread including Cutting the RRR. Cutting interest rates. Various