Fug this market. Nothing is working. You get long and lose money. You get short and lose money. You get flat and you lose purchasing power as the dollar melts and commodity staples rise. These are the kind of markets that grind your capital into hamburger as you force trades to make up losses. There seems to be no real bid or no real offer in the markets right now.
Our bias is to sell risk as the macro picture looks ugly and deteriorating with no resolution in sight. We’re not the only ones in this camp, which is getting crowded and there’s the rub. This may be why the markets seem “swanned out” and not reacting to the ugly macro as they have in the past — i.e., freaking out and panicking — or it could be these risks are already priced with the latest downdraft. As to the later, we don’t think so and neither does the bond market. Whoever said this business was easy?