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With regards to the resilience of the US economy. If you look at the effect of 9/11 in the economy, it can give you a good idea of how it handles shocks. In the 4 Qs up to Sep 2001, the economy grew by a 2.5% avg rate, after Sep 2001 for the next 4Qs, it grew at 0.89% avg rate. So it shaved 1.5%...

I'm referring to long bond positions (whether be it treasuries or corporate bonds). I don't think it does because frequently, when I sell a position the value that it was market before (lets say +$521) turns into something bigger (lets say +$745). The difference is the accrued interest that the...

That kinda of drawdown doesn't look that bad honestly. If you bought a good value stock at the close friday (1880) and the most it can drop is to 1700, thats a 10% drop. But if you got some bonds and its indeed a good value stock, its likely to drop less than the market. So we are looking at a...

El-erian was on bloomberg talking about how he does not expect a US recession in 2016 because people underestimate the resilience of the US economy. He sees 2% growth this year and a 30% chance of recession in 2017. He talks about how this is a transition from a valuation level where the Fed was...

Can you explain the 1/4 risk part?

If I do end up being long stocks with like 40% of my assets, I will probably be heavy on the bond side too. I will probably will have to go back on the old days in this journal and the previous one where I was tracking FOMC members and speeches like crazy to make sure I had a good guess on what...

That's the cool thing about selling puts (fully backed by cash or UST bonds), you endup buying when you are supposed to, during a panic. Its a shame BRKB only went briefly under 125. I went ahead and bought some directly anyway just in case. If markets crash tuesday then I might be forced to buy...

The principle is one that macro man talked about in his blog in the past that I tend to agree. "hedge when you don't need to", thats when its cheap and it has good risk-reward. The people that are hedging now are insane, its too late. Now if someone is uncomfortable 8times out of 10 is better to...

At the very least, IF there is a recession, its likely to be shallow due being driven by things other than a Fed tightening cycle (and one hike doesn't count as a cycle) or a banking crisis. I think this will be a good opportunity to accumulate some good stocks into VIX spikes and do some...

Here are a couple http://business.financialpost.com/investing/david-rosenberg-u-s-recession-the-numbers-say-no-even-if-the-market-says-otherwise http://business.financialpost.com/investing/david-rosenberg-investors-fasten-your-seat-belts-were-entering-a-period-of-irrational-pessimism

Have you read some of the Rosenberg articles lately? He's got a bunch of free ones in some canadian site I posted a while back. He talks about how the US economy can do just fine as a long as the US consumer is going. That this is different from EM decoupling from the US (which is nonsense), for...

I bought some BRKB outright today. soon it will be time to sell all bonds and ride whatever happens with no hedging. this is getting pretty ridiculous

I wonder what the people that bought at SPX 2100 are doing right now

Now Bullard is worried about inflation expectations, he is supposed to be a hawk

If I get assigned on BRKB I will have one problem though. I got about 15-16% in equities right now, if I'm forced to buy BRKB, this will rise to 37%, if I add the 15% in BR USD bonds, then I got 50% in risk assets. This would leave me vulnerable to a drawdown if risk assets continue to get...

As of right now, its too late to short (unless as a day trade). What can be done is to use bonds as protection. In october this worked, sure, they went down but mostly at the end of the month. Because the rally was fed induced that provided some support and the 10y held up even though stocks...

I wish I had done a better job at catching this short on ES/SPY. I shorted a small position during the new year ramp (in the 2050-2100 defensive area) but as soon as SPY reached 200 I covered it all. Failed to re-short at pop to 201 and then just watched the collapse down to 188. What threw me...

Had to close NHTC into this news. looks like shorts are wrong for now

When I say whether shorts are right or wrong, im referring to the police raid and nasdaq halt, short-term thesis

Its a crowded short, so be aware of that. I will be hedging or covering fast if there are good news