I rarely make predictions because I hate being wrong. But I shall make this prediction to help make my short positions profitable. Except that you can’t wash your car to make it rain. So here goes. 
As long as there is serious skepticism about the fundamental underpinnings of the current equity market rally, as long as [...]

The innovation that was accused of being a New Paradigm in the late 1990’s in the wake of the Internet boom and subsequent bust brought amongst other things the concept of Just-In-Time management of inventory and production processes. This has introduced volatility into the cash flow and earnings generation of a large swathe of the [...]

In the recent investor surveys a number of hedge fund strategies stand out as strategies which investors expect will do well going forward and which they intend to increase their exposure to. Among these are distressed credit, global macro and CTAs. Of the three, distressed debt hedge funds had a poor 2008 whereas macro and [...]

14 April. Retail sales numbers in the US disappointed. Retail sales less autos shrank 0.9% against a forecast of 0.0% and a prior of +0.7%. Advance retail sales were -1.1% versus a forecast +0.3% and a prior -0.1%.
PPI numbers were also reported. PPI Ex Food and Energy rose 3.8% YOY versus a forecast 4.0%. The [...]

Black Swans?

Whatever you do, whatever they do, whoever they are, whoever you are, economic cycles will survive. See my article of 2 April 2008. The path of economic growth and the role of central planners.

People learn from their mistakes. The next mistakes they make will be fiendishly novel and clever.

If it is breakable it will [...]

In 2008, investors quickly became acquainted with the concept of liquidity, or the lack of it. But what do we mean by liquidity, and how do we price it?
 
Liquidity premia are already priced in some markets such as the treasury market where the spread between on and off the runs is the implied liquidity [...]

During the Asian Crisis of 1997, the Malaysian equity market fell initially by over 60% in from early to late 1997. It then rebounded by nearly 50% in early 2008 before falling another 60% for a total drawdown of some 76%. In Jakarta, the initial loss was 57%, the bounce 73% the subsequent fall 53% [...]

Ideal Hedge Fund Terms:

For a host of reasons, hedge funds have not offered the most investor friendly terms. The cynical view is that hedge fund managers will get away with as much as they can. The fees are high, the performance fees are charged and cannot be reclaimed if there is a subsequent loss, [...]