1/x The market continues to try & shake out weak hands from overextended positioning by both HF & Retail...After a strong Vanna run up overnight, as expected, retail exuberance exploded on the open in the form of retail call buying, this fragility, paired w/a)Mean reverting flows
More from Cem Karsan 🥐
1/x As we’ve been calling for since Nov, today we finally got our 2 ‘Georgia Peaches’🍑 precisely on schedule, as we’ve called for since Aug, & the underlying rotation has confirmed now for months, this matters. This is a historic turning point. It matters not only https://t.co/BFxKGrI1Oo
2/x for this year, but for the economic trajectory of America & likely the macroeconomic regime of the developed world for the coming decade. That said, contrary to popular belief, the market does not move based on news in the short term if the positioning doesn’t allow it to.
3/x & our old friend Gary the 🦍 & his sidekick Vanna are positioned to have this market pinned through 1/11. So, as explained ad nauseam, the election news, though fundamentally important, won’t matter to the index itself in the ST. As predicted, the largest moves from the GA
4/x runoff INITIALLY have come from factor rotation. This should continue to be the case, as the street is oversupplied IVol & the index is pinned. This not only allows for idiosyncratic risk moves in constituents, but it actually FORCES extreme noncorrelation & rotation, as we
5/x have witnessed now for the past 2 days. This Vol compression will be increasingly difficult to break free from until 1/11-1/15, but the window of weakness is coming...soon the final hedges from the ‘election hump’ in Nov will expire with the Jan monthly options. Once the
1/x Well you can\u2019t say I didn\u2019t warn you... We\u2019ve been eying that 3770.5 level and the 1/5-1/13 window for many weeks. To get it a day early, @ the lowest edge of the upper range, tells me that there\u2019s understandable concern over the impending outcome of the runoff. As I\u2019ve said https://t.co/BxG2DzdXqt pic.twitter.com/ki4sYprwIH
— Cem Karsan \U0001f950 (@jam_croissant) January 5, 2021
2/x for this year, but for the economic trajectory of America & likely the macroeconomic regime of the developed world for the coming decade. That said, contrary to popular belief, the market does not move based on news in the short term if the positioning doesn’t allow it to.
3/x & our old friend Gary the 🦍 & his sidekick Vanna are positioned to have this market pinned through 1/11. So, as explained ad nauseam, the election news, though fundamentally important, won’t matter to the index itself in the ST. As predicted, the largest moves from the GA
4/x runoff INITIALLY have come from factor rotation. This should continue to be the case, as the street is oversupplied IVol & the index is pinned. This not only allows for idiosyncratic risk moves in constituents, but it actually FORCES extreme noncorrelation & rotation, as we
5/x have witnessed now for the past 2 days. This Vol compression will be increasingly difficult to break free from until 1/11-1/15, but the window of weakness is coming...soon the final hedges from the ‘election hump’ in Nov will expire with the Jan monthly options. Once the
More from Economy
$600/wk Unemployment Insurance cannot deliver the benefits of a $600/wk Job Guarantee. From the outset, I should say JG is not a replacement for UI, no matter what you may have heard. I’ll get to this later, but read this long 🧶 w/ that in mind.
Automatic stabilization: Both $600/wk UI and JG will provide counter cyclical spending. But UI will be weaker. Counter-cyclical stabilization is not just about the absence of income. It is also about the transmission and structure of economy
Firms don't like to hire the unemployed. Mass and long-term unemployment make the problem worse. JG would recover labor markets much faster than a UI of the same amount, both b/c of the higher direct, induced & tertiary employment effects & b/c of private firm hiring preferences.
JG stabilizes spending patterns better. Uncertain job prospects may mean more cautious spending from the unemployed compared to those w/ guaranteed jobs.
UI is temporary, which makes matters worse. Even if it were permanent, it still won't resolve the problem of job scarcity.
Nations who once achieved tight full employment through active labor market policies demonstrate that unemployment does NOT fluctuate the same way it does w/o them. Direct employment, ELR type policies diminish drastically/even eliminate these amplitudes (eg postwar Japan/Sweden)
Surprised so many smart people bought into the idea that $600/wk UI is the same as $600/wk job guarantee (or better) or that JG jobs must be inherently inessential. I\u2019ve addressed this many times & will post a thread later. Trying not to spend precious family time on Twitter.
— Pavlina R Tcherneva (@ptcherneva) December 29, 2020
Automatic stabilization: Both $600/wk UI and JG will provide counter cyclical spending. But UI will be weaker. Counter-cyclical stabilization is not just about the absence of income. It is also about the transmission and structure of economy
Firms don't like to hire the unemployed. Mass and long-term unemployment make the problem worse. JG would recover labor markets much faster than a UI of the same amount, both b/c of the higher direct, induced & tertiary employment effects & b/c of private firm hiring preferences.
JG stabilizes spending patterns better. Uncertain job prospects may mean more cautious spending from the unemployed compared to those w/ guaranteed jobs.
UI is temporary, which makes matters worse. Even if it were permanent, it still won't resolve the problem of job scarcity.
Nations who once achieved tight full employment through active labor market policies demonstrate that unemployment does NOT fluctuate the same way it does w/o them. Direct employment, ELR type policies diminish drastically/even eliminate these amplitudes (eg postwar Japan/Sweden)
I really think people have a very short-sighted view of the city and its key role in decades to come for the economy of 🇨🇳. Every so often, people have a handful of misconceptions about the city's future because they lack of basics in strategy 👇
https://t.co/6wuRzXGkYZ The West propaganda seems to make people think we are cracking down on 🇭🇰 people because we no longer need them and we will inevitably suppress their rights. Every now and then, I talk with people in 🇭🇰 who think the Great Firewall will extend to 🇭🇰
🇺🇸-led liberal order is very strong to come across 🇭🇰 people and make them believe what they want. Brainwashed people don't think rationally and fall for the lies and propaganda. This guy is one among so many others I met in 🇭🇰 who told me the same thing, that the city is doomed
They couldn't be more ignorant ! Unfortunately they will end up leaving the city and missing out on incredible opportunities... But they don't know that nothing will eventually change after 2047 ? 🙃Let me explain you why
I bet even after 2047 🇭🇰 will still enjoy a high degree of autonomy and freedoms that its mainland counterpart can’t enjoy : an independent legal and financial system, English as one of the official language, an access to the West internet, its traditional medias, etc.
Most Western countries are already starting to reconsider whether Hong Kong will remain a viable trading centre.
— Isaac Cheung | \U0001f1ed\U0001f1f0 | (@SoAlive0513) February 15, 2021
When the entire world stops trading with HK, how will HK be the financial center of the world?
I doubt tourism would be any better in the next few years either lol
https://t.co/6wuRzXGkYZ The West propaganda seems to make people think we are cracking down on 🇭🇰 people because we no longer need them and we will inevitably suppress their rights. Every now and then, I talk with people in 🇭🇰 who think the Great Firewall will extend to 🇭🇰
🇺🇸-led liberal order is very strong to come across 🇭🇰 people and make them believe what they want. Brainwashed people don't think rationally and fall for the lies and propaganda. This guy is one among so many others I met in 🇭🇰 who told me the same thing, that the city is doomed
They couldn't be more ignorant ! Unfortunately they will end up leaving the city and missing out on incredible opportunities... But they don't know that nothing will eventually change after 2047 ? 🙃Let me explain you why
I bet even after 2047 🇭🇰 will still enjoy a high degree of autonomy and freedoms that its mainland counterpart can’t enjoy : an independent legal and financial system, English as one of the official language, an access to the West internet, its traditional medias, etc.
