🥚 Yield Curve. Stagflation. Fed Rate Hikes. World War. Oil Prices. Pandemic. End of Stimulus. Evergrande. Margins. Unwinding. Rigged Markets. Fake Markets. Bubble burst. Bear Markets. 🥚
The Market backdrop is rife with fear: inflation and/or stagflation, continued fed interest rate hikes, a historic yield-curve inversion, geopolitical conflict, unreasonably expensive oil prices, destruction of Ukraine, economic destruction of Russia (#10 economy), taxing of China (#2 economy), Evergrande, Margin Unwinding, Depletion of Stimulus (globally), an evolving Pandemic, and runaway national debts
Bank of America is now warning that the ‘Bear Market rally’, otherwise known as a short-term Fibonacci retracement in the upwards direction of a macro downtrend, is done. Therefore, they’re calling for a continued de-risking of equities and risk-on assets. Based on my independent analysis above, I am in agreeance with BofA.
Too, the London Metal Exchange (LME), as backed by J.P. Morgan, bailed out their short-seller(s) at the expense of everyone else. In a way that you would only wish that I was making up, the LME just ‘undid’ days of trades, made by smart investors who beat the ‘short-selling tycoons’ of the nickel markets. This type of care-free destruction of public trust in markets could very well spread to the U.S., where investors are already skeptical about the Fed’s correlations with short-selling bad actors in the market who are actively being investigated by the DOJ. As we can see daily, the Fed’s reverse repo ‘overnight’ program has been exploited on the order of $2 Trillion – this is in combination with a $10 Trillion Fed balance sheet, new requests for $6 Trillion budgets, and the $4.5 Trillion Fed private 2019 bailout of Wall Street banks behind the backs of American taxpayers.
Further, it was shown that Barclays was just fined for half a Billion USD for over-shorting VXX which is an ETN that is associated with volatility and S&P 500 futures. They literally short-sold 15 Billion USD of this volatility ETN BEYOND their $20 Billion limit as required by the U.S. – thereby creating false ‘stability’ pressures (yes: using wide-scale short-selling phenomena to subdue an important volatility ETN that is connected to the entire market system via S&P 500 contracts, options and futures) thereby inducing fake macro market stability during a time of geopolitical conflict, in order to put on a front of western market stability… in a way that simply did not make sense to economists. Now, they have several weeks to months to buy back all of these shares (thereby going long in volatility ETNs with tens of billions of dollars), or face blacklisting from U.S. regulators. Similar in a few ways to the ‘short-vol’ XIV scandal in 2018, but in this case ‘long vol,’ this will surely add to the volatility in markets going forward. That was owned by Credit Suisse. That blew up. That no longer exists. Will the VXX ETN ‘survive’ in this process? You can count on it that there is a line or two in the 285 page prospectus that will probably lead to a ‘no’ answer. Nevertheless, every investment associated with that will be Sayanora. With the ^VIX having fallen in-a-perfectly-straight-line from 39 to 19 line over three weeks [and now we know why]: I am now ‘bullish’, or perhaps even ‘apish’, on volatility.
“One small single event can trigger an unstoppable chain of events that gain momentum with increasing force, and nothing is ever the same.”
I am hedging for this in six ways: 1.) holding cash and gold, 2.) holding antiques, 3.) shorting overvalued tech stocks, 4.) going long in volatility ETN tickers of non-barclay’s vendors 5.) shorting the NASDAQ, 6.) hodling the king and queen of ‘meme’ stocks