Kyle Bass - Shikata ga nai

Just Kyle Bass's latest piece from early June.

Basically he's with thesis that now is the time to reduce risk.

Storm is coming.

Hayman Japan Update_June 2013 (FINAL) Kyle Bass China

*Disclaimer: charts and data are presented as I receive/see them. Sources are usually not checked for validation and my own calculations are of 'back of the envelope'-type. I am aware that some math that I do myself might be wrong and/or misleading to some extent. In financial markets the rate of change of economic data is often more important than the actual level and the perception of 'what is priced in' is more important than 'what is actually going to happen'. This is actually the way people pick entry and exit points. So... yes, sometimes you might say 'This guy is an idiot, this is way wrong!' with a high conviction, being right. Not to worry. Markets are made of expectations and the clash of conviction between its participants. Portfolio managers know that being an idiot is sometimes profitable and being smart is often a bad choice. It is all reality, sometimes good, sometimes bad. By the way: corrections to my analysis and intelligent debate is welcome. theintriguedtrader AT gmail do com

Ok, so reducing short-term bearish bias, Dragney-style

A few weeks ago I posted that Central Banks had changed their ultra-dovish stance in aggregate and it would be harder for asset prices to make new highs, perform well.

Today part of that changed.

It seems Bernie and Draghi had dinner recently and it all ended with rolling empty bottles of wine across the hotel room floor and some real central-banking love going on. Carney was video-taping it. Expect to see it on YouTube soon if leaked. The real reason for Bernie to retire into 2014.

So.. Carney started at the BOE and the guy is Bernanke with a different accent. Some news here, not THAT much, but explictly more dovish. Basically forward guidance is the new black. And Carney entered the BOE with flying kick at the door, without apparent resistance tells us something. Expect BOE to include forward guidance in August or something.

Draghi today at the ECB changed the game as well, with "rates at zero for an extended period" Fed-like style talk. News? Hell no. But being explicit? Yes. Basically ECB was the "Central Banking for Losers" material. Now not so much.

So Fed leaves field. ECB + BOE enter.Crowd cheers. I get more quiet.

Expect EUR and GBP down, EZ + UK equities up.
No signs of marginal tightening. On the contrary.

Cheer up, fellas.

*Disclaimer: charts and data are presented as I receive/see them. Sources are usually not checked for validation and my own calculations are of 'back of the envelope'-type. I am aware that some math that I do myself might be wrong and/or misleading to some extent. In financial markets the rate of change of economic data is often more important than the actual level and the perception of 'what is priced in' is more important than 'what is actually going to happen'. This is actually the way people pick entry and exit points. So... yes, sometimes you might say 'This guy is an idiot, this is way wrong!' with a high conviction, being right. Not to worry. Markets are made of expectations and the clash of conviction between its participants. Portfolio managers know that being an idiot is sometimes profitable and being smart is often a bad choice. It is all reality, sometimes good, sometimes bad. By the way: corrections to my analysis and intelligent debate is welcome. theintriguedtrader AT gmail do com