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They can be and usually are one and the same. Risk premia generates inefficiencies. For example, the put skew in the S&P 500 is a function of risk premia AND a market inefficiency. The puts are over valued by any statistical measure and the premia exists to attract liquidity and entice others...

Gasoline has been negative for a long time including the Gasoline curves.

Agree, but it's not mathematically realistic for 10,000 hedge funds to all have 150 billion that Ray Dalio has. The top 10% (around 1000 or so) have assets over 500 million. The top 1% (100) over 10 billion. Rough estimates. Most hedge funds are really more appropriately emerging manager...

Profit is not becoming zero. You still keep thinking this. Do you think most of the companies in the S&P 500 are unprofitable? All of them are in competitive markets and their MR = MC. Yet most of them are comfortably profitable.

Well no, there are reasons to stay in the car business. One is specialization. Over time firms develop market specialization that allows them to generate a higher output per given unit of input. Switching industries would put them on the margin in the haircare industry meaning they have no...

As far as market speculation goes, the demand for speculation is driven by risk premia in a given market. Speculators enter a market when the risk premia is sufficient to compensate them for use of their resources with respect to time, risk and borrowing costs. As more and more speculators...

You are confusing ideas. The equilibrium is not towards zero profit. Every firm in the market has a different cost structure. The firms on the margin will be the first to drop out as profits drop. This in turn lowers supply and raises prices. Higher prices will eventually bring new firms...

Yes of course. Economic profit takes into account opportunity cost as well as accounting cost.

No. In economics, everything is evaluated at the "margin". Not in the whole. So as a firm, I will always produce if the next unit's marginal revenue = marginal cost. Monopolies control supply of a market and have a downward sloping MR curve. They can manipulate price by witholding supply...

No, in both competitive and monopolistic environments, MR = MC. For competitive firms, marginal revenue = price. For monopolies price is always less then marginal revenue. Monopolies have a downward sloping marginal revenue curve.

This is not correct. In a competitive market, marginal revenue = marginal cost. That is NOT the same thing as zero profits.

They need alpha. Ultimately that comes from less informed or less capable players which in the past has been retail. Still is. But there are fewer of them around. I don't think Ray Dalio is the best example but there are probably close to 10k hedge funds out there and 90% of them are under...

Great piece by Kemp. By John Kemp LONDON, Feb 21 (Reuters) - Brent futures prices for the second quarter have risen strongly in recent days suggesting traders expect the oil market to move into deficit earlier or that a squeeze is underway. Calendar spreads for nearby months have tightened...

To use poker parlance, hedge funds use to be able to sheer tourists of their hard earned money when they sat at the table. Now the family man from Ohio that use to sit down at the table has been replaced by a machine that always optimizes their bets perfectly and carefully plays each hand...

Last year we hit it in early April and came off before making a second run at it.

SPX at the yearly A up at 2362.

Natty blood bath...

It wasn't commericials. They have a separate category on the COT report.

CVI is a Carl Icahn play.

http://www.zerohedge.com/news/2017-02-20/hedge-funds-have-never-been-long-crude-oil-ever?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29