The Credit Crisis Financial Stocks Short Journal

One thing I noticed on 'Invisible Hands' so far is how much the global macro managers focus on the business side of things as opposed to the market side. Volatility, redemptions, cash for liquidity, communicating with clients, etc. And how much those that didnt got hurt in 2008 when liquidity dried up and clients started to redeem.

I dont find that aspect much fun to be honest, right now I trade through a corporation so I can be taking client money, I'm talking with some people to do that but I'm not yet sure I will go down that path. I'm willing to tolerate bigger drawdowns then what the clients would so they would hurt the returns. Some of that can be offset by the fees I suppose but I find really fun is to research and put trades on, not explain why I lost money in the month or have do deal with withdraws.

I suppose a solution is to propose a half-yearly withdraw window, and only take clients who accept this
 
GDP Report

"Excluding inventories the economy expanded at a 1.6 percent rate following a 1.7 percent pace in the fourth quarter."

This economy is weak

"The central bank’s preferred price gauge, which is tied to consumer spending and strips out food and energy costs, rose at a 0.6 percent annual pace, the lowest level since records began in 1959 and down from a 1.8 percent increase the prior quarter, today’s report showed. "

Good luck getting the Fed to take out 'extended period' with their preferred price measure at all time lows
 
"Inventories contributed 1.57 percentage points to GDP, less than half the contribution in the last three months of 2009 when businesses became less aggressive in clearing their warehouses."

Looks like the time for flashy headlines on GDP reports is coming to an end. At the end of the day what matters is the final sales. And the US havent had a final sales bigger than 2% since when?2007 or something
 
Basis blowing out now, vol is going bid. No specific catalyst, but either people suddenly woke up to the risk or there's an actual fear that Greece won't be done this w/e. Or it could be short-covering into the weekend. In reality, it's most likely that Eurodollars are overreacting to the Fed publishing the MRA for doing reverse repos with money-mkt funds and the amendments to the Term Deposit Facility (even though the notice says that the measure "...has no implication for the near-term conduct of monetary policy")
 
Quote from Daal:

Looks like the Jun GE is decoupling big time from ZQs, siva joty galore. I dont believe I'm coming back there anytime soon
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Not sure why you keep mentioning Siva-Jothy in the context of Libor blowing out. He had a huge year in 2008, when that happened - I believe his fund was up 50%. He was up in 2007 as well. Don't know how he did in 2009, but I don't think the Libor/OIS spread was an issue in 09 anyway.

If I recall, when he wants to go long GE, he buys calls, much like we have been doing. This would allow him to weather any nonsense in Libor and focus on the fact that rates will stay low over time.

I believe S-J had a bad year in 2006, split w/his partner, and formed a new fund for 07. I'm certain the bad year in 06 had nothing to do with Libor/OIS - my guess is that he was early in predicting the blow-up/bear market/recession. As far as I know, he's done just fine since then.
 
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