satonomics

#bitcoin

[satonomics @satonomics]

@PegasusFund @GoBirds555 @WaterworldCapi1 Everyone believes politics are corrupt then we just have collective amnesia when it comes to the most important bond and equities markets in the world. It's 100% being manipulated, just a matter of how often and when.

[satonomics @satonomics]

@PegasusFund @GoBirds555 @WaterworldCapi1 How is this take even controversial lol. They explicitly have a group designed to do this for decades.

The gov propped up corporate bonds in COVID. They've done other shit like this. They were almost certainly in oil futures if not the equities too.

https://t.co/Up3uEg6ZsI

[satonomics @satonomics]

@TXMCtrades Nothing really matters until we get a true leverage unwind and the powers at be have gotten *very* good at stamping out leverage.

Have to assume the leveraged etfs, carry trades, somebody (?) might give us a nice shake out soon though, but until then... Zombie BTFD

[satonomics @satonomics]

A nice post with some sanity from @Alpha_Ex_LLC. For those who remember $XIV...

[Alpha_Ex_LLC @Alpha_Ex_LLC]

TLDR: leveraged ETFs are an accident waiting to happen (soon).

Welcome to the end of quite a week. Risk history buffs "celebrated" the 10 year anniversary of Brexit on 6/24, a day when, a decade ago, the SX5E plunged by 8% and the Euro fell by 2% on the same day. The incoming correlations suggested it "could not happen, it would not happen", to borrow from Ace Rothstein in Casino.

But the real action is not in global macro but in single stocks, and specifically, chips and memory and the leveraged ETFs built on top of them. There's an accident waiting to happen here. Not a bear market, but an extreme one to three day move forthcoming.

In 2017, as the SPX experienced a 50 year low in realized volatility, the inverse VIX complex got larger and larger...there was a story about Capstone CIO Paul Britton having to tell a cab driver, excited that he'd found a winning stock pick, that the XIV was not actually a company. The story (clipped below) underscored just how over-consumed this short vol trade was by folks who just think that "number go up".

Today's equivalent of the XIV is not capitalizing on an undersupply of realized vol, but on an undersupply of memory. One might ask, "what are these companies?"
$MUU $SNXX $SOXL $KORU ...they are funds that own a single stock with an inconceivable trading strategy that gets much larger on the way up.

Memory is indeed undersupplied. That is, people have short memories. Or, more bluntly, they never learn. The KORU is a 3xer on the KOSPI Index with nearly 2bln in AuM. This "company" had a 36% down move on Tuesday. Its 10d realized vol is 300.

As Kevin Warsh takes the helm at the Fed, there is some complaining that he's not making his "reaction function" more transparent. Well, the RF for these leveraged ETFs could not be more specific. We know exactly what they need to do - and yesterday, MUU and SNXX had to buy right around 2bln and 1.8bln of MU and SNDK, respectively. It's value investing flipped upside down.

MUU starts today long 18bln of Micron, SNXX long 13bln of SNDK. Don't forget the SOXL which is long 90bln of SOXX. 7709 HK Equity is long 28bln of SK Hynix.

The regulators need to be watched as well. Below, a clip from a story yday from the top regulator in South Korea who expresses regret about the Frankenstein that has been unleashed. I would argue that the leveraged ETF providers in the US are vulnerable to litigation. Below a snapshot of the table from the SNXX prospectus. It shows the standard matrix of simulated performance of the lev product versus the underlying at different vol levels.

It is beyond ridiculous and deceitful to include 10 realized vol in this table. You know what assets are currently 10 vol? The TLT. It's daily moves have generally been around 30-80bps a day for the last month. Sandisk regularly has moves well north of 10% on a single day.

The realized vol table for the 2x on SNDK should start at 50 and run to 150. It looks much different - that is, much worse - when you do that.
https://t.co/3f849Z8RXu

[Holger Zschaepitz @Schuldensuehner]

The change in hyperscaler vs chip stock free cash flow is stunning! (via BBG)

[satonomics @satonomics]

@fejau_inc lmao hadnt seen the Valley of Coronavirus before this is amazing

[Leyla @LeylaKuni]

~40% of private credit borrowers carry negative cash flow

ouch

(Source: Allianz)

[Ed Zitron @edzitron]

SoftBank’s investor presentation is one of the greatest things ever made. I’ve been thinking about it all day. These are the real slides shown in a speech where Masayoshi Son said he wouldn’t retire for at least another decade. The goose stuff is perfect.

https://t.co/sk9cDhdWIE

[Don Johnson @DonMiami3]

The Yen interventions don’t even work

It’s so hilarious

[satonomics @satonomics]

Everything you need to know about today's market in one picture.

[Alpha_Ex_LLC @Alpha_Ex_LLC]

SK Hynix... 1mln calls before 10k puts? there's never before been anything like this...
Report card:
one year return on the stock: 1047%
1m implied vol today: 135
1m implied vol one year ago: 42
the price of a 1m call has tripled

Hyman Minsky: "success breeds a disregard of the possibility of failure"

[Winter @PunkyBrewstuh]

@interiorpress47 I can no longer tell which US accounts are parody and which are real. Not even kidding.

[satonomics @satonomics]

Just getting my groceries ready for when this collective psychosis finally catches up to us.

@RudyHavenstein @Tyler_Neville_

[satonomics @satonomics]

@kwharrison13 thats pretty neat.

[Donald J. Trump @realDonaldTrump]

Iran was on its last legs and ready to collapse until the U.S. came along and gave it a life-line in the form of the Iran Deal: $150 billion

[Lyn Alden @LynAldenContact]

If you denominate US GDP in gold instead of dollars, the chart is wild.

[satonomics @satonomics]

Friendly reminder that even if this does constitute securities law violations, it doesn't matter.

Any teeth from regulators evaporated back in the "funding secured" nearly a decade ago
https://t.co/n3e8HMLp3H

[Elon Musk @elonmusk]

@JonErlichman I think SpaceX might be able to reach approximately $1T revenue in 2030

[Flood @ThinkingUSD]

Everyone is just grabbing whatever capital there is sitting left on the table and stuffing it in their pockets

[satonomics @satonomics]

@AndreasSteno Read: Best stock promoter in history.

Sure he's smart, but that's been wrapped in a gigantic layer of bullshit.

> solarcity bailout
> tesla 420 'funding secured' securities fraud
> absurd pay packages
> '20-'21 gamma squeeze conveniently saving tsla

i know im missing plenty

[satonomics @satonomics]

@w_s_bitcoin