Kudos to MMs
- Thread starter nitro
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What is stopping corporations from gaming the system to their own advantage?
What I mean by this is. The FED flat out states they will not raise interest rates until the unemployment rate is at a reasonable level and employment is sustainable. So far so good. But, corporations understand this, and the effects of low IRs on their profitability is non-trivial. Corporations knowing this, other than intense demand which may not happen for years forcing them to hire, what is to stop corporations from not hiring in order not to aid and abate IRs from going higher?
The answer is that probably corporations don't have this kind of cooperation and collusion to collectively organize themselves for this kind of purpose. That they are too blinded by competition to align themselves, even unconsciously, to their own collective advantage.
But I wonder....
What I mean by this is. The FED flat out states they will not raise interest rates until the unemployment rate is at a reasonable level and employment is sustainable. So far so good. But, corporations understand this, and the effects of low IRs on their profitability is non-trivial. Corporations knowing this, other than intense demand which may not happen for years forcing them to hire, what is to stop corporations from not hiring in order not to aid and abate IRs from going higher?
The answer is that probably corporations don't have this kind of cooperation and collusion to collectively organize themselves for this kind of purpose. That they are too blinded by competition to align themselves, even unconsciously, to their own collective advantage.
But I wonder....
Basically its a subsidy from cash rich(depositors) households to the corporate sector. The corporate sector then passes it back to the government via taxes.
And so the bailout is paid for by ordinary people. Obviously corporations will try to hold off employing, they will call it productivity gains.
Think about it suits them to have lots of unemployed keeps wages down and lots of people to hire if they want.
CB's are betting that we can muddle through this, odds are we muddle through okay a bit like Japan has muddled through!
And so the bailout is paid for by ordinary people. Obviously corporations will try to hold off employing, they will call it productivity gains.
Think about it suits them to have lots of unemployed keeps wages down and lots of people to hire if they want.
CB's are betting that we can muddle through this, odds are we muddle through okay a bit like Japan has muddled through!
does a simple mechanical system like that work with NFV?
1) enter in the direction of NFV once the spread >7pts
2) average down every 5-7 pts (if the spread grows)
3) hold multiple overnights if needed
4) exit when NFV is within 2-3 pts of SPX or if the direction of the spread is flipped
1) enter in the direction of NFV once the spread >7pts
2) average down every 5-7 pts (if the spread grows)
3) hold multiple overnights if needed
4) exit when NFV is within 2-3 pts of SPX or if the direction of the spread is flipped
Probably, but it is risky unless you monitor this position constantly since you are holding positions overnight. In fact, the most profitable way to use NFV is to put a position on with your rules at 3:15 CT, after SIFs close, and then try to get the overnight convergence.
But this is all theory.