Wednesday, June 4, 2014

Some morning news

Here's some morning reading:

Bloomberg View - volatility dies, hedge funds lose. Well, it's simple, isn't it? There's so much capital sloshing around out there that if someone finds a location in the market where they can outperform the S&P, that location will quickly become a fad and get over-run, until the advantage of being there is arbed away. I don't know exactly how you can prove it mathematically in the case of volatility, but it's just a case of trying to extend a basic principle of markets to a specific price within the market.

Bespoke - checkup on S&P sector breadth. Hey, remember just one week ago when some guy with a newsletter was telling you that the drop in participation was an indicator of topping?

Wow! What a difference one single fucking week makes, eh?

FT beyond brics - now for the hard part: India's infrastructure challenge. I know it'll be "easy" to fix, as Jim O'Neill says; I just don't see where India will get the capital to do it, if the secular bull in EMs is over. Everyone's still assuming India will have the necessary access to capital.

Reuters - Qingdao stops metal shipments due to missing collateral. This could become very scary, or it could end in a big surge of imports to cover the empty positions. Since ZeroHedge has already taken the "very scary" side of the bet by linking to this article and adding their own Soviet-sponsored wharrgarbl, I'll take the other side of that bet, Alex.

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