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  • China's Debt Bomb Remains A Stealth Candidate For Top Gray Swan Of 2015 [View article]
    Your statement is built on a foundation of emotion and political bias, with little if any attempt to actually examine facts.
    Feb 20, 2015. 09:45 AM | 3 Likes Like |Link to Comment
  • China's Debt Bomb Remains A Stealth Candidate For Top Gray Swan Of 2015 [View article]
    You don't understand currencies at all. In fact your view is completely and totally wrong.

    The currency of a sovereign nation is backed by productivity and assets. This is very simple to understand. You can use US dollars to pay taxes... or buy Manhattan or California real estate... or buy shares in Apple or Google or Tesla or Exxon. As the value of the US dollar decreases, so too does the cost of purchasing any asset priced in US dollars. This creates an obvious price floor.

    Sovereign currency is linked to asset valuation (among other things, like productivity, strategic positioning, geopolitical stability and future economic prospects) just as valuation for a share of stock is linked to assets on the balance sheet. If you don't understand balance sheets, you don't understand how currencies work. Period.
    Feb 20, 2015. 09:43 AM | 2 Likes Like |Link to Comment
  • China's Debt Bomb Remains A Stealth Candidate For Top Gray Swan Of 2015 [View article]
    "But once the bubble burst, over 60 internet companies went bankrupt, and millions of miles of fiber infrastructure went dark."

    http://bit.ly/1DAm4a3

    CenturyLink by itself has a 240,000 route mile national fiber network.

    http://bit.ly/1DAm4a5

    "The boom and bust in telecommunications coincided with
    the boom and bust in the U.S. equity market as a whole and with the “dotcombubble” of Internet stocks. The dot-coms received most of the publicity initially, but the telecommunications industry accounts for a much larger share of market capitalization gained and lost than do the dot-coms."

    http://bit.ly/1DAm4a8
    Feb 20, 2015. 09:39 AM | 1 Like Like |Link to Comment
  • Markets Oddly Calm On Greece: Russia, China, Even USA And Saudis Still In Play [View article]
    That is certainly a possibility. The long term historical track record of Mr. Market in the immediate presence of possible crisis inflection points deserves no respect at all -- in fact if anything it deserves the opposite.
    Feb 12, 2015. 01:17 PM | 1 Like Like |Link to Comment
  • Markets Oddly Calm On Greece: Russia, China, Even USA And Saudis Still In Play [View article]
    We are never on the wrong side of any trade for very long because we have the ability to change our minds instantly as facts change and information inputs change.

    Historically traders have expressed wariness of sharing their views in print for fear of being locked into a view. That was level two thinking, with level one thinking being the individual who shares their view in print and then gets locked into it without realizing it.

    But we are at level three in this respect: We can share a view in print, the act of which helps clarify our thought process, and then change our minds immediately, within 24 hours if need be, by way of a very clear and maximally objective process that combines awareness of information streams (price, fundamentals, sentiment reactions, inflection points) with a sense of positions that are logical to take or not logical to take.

    As for "wrong side" etcetera, the man who is wrong is the man who thinks his views matter. We do not think your views matter at all, you could be 100% dead wrong to the point of being comical, and of course so could we. Whenever someone expresses the opinion we are "dead wrong" on something, we smile a little and wonder if that person understands how truly protean the winning trader's mindset is: There are multiple models and scenarios for understanding a situation, a great trader can start with one, then put it down and pick up another as easily as a master craftsman can decide to put a tool in the toolbox and draw out another.

    And yet this is radically different than the average market participant's experience of saying 'well I think X' and then sticking with that view even as informational inputs change -- to us that is the very idea of loony tunes.

    Of course it is possible that equities could go much higher in 2015, and if that happens we will profit on that occurrence, as it stands our long book is benefiting nicely from the continued "risk on" elements while the things we are short are either going down or flatlining. Nor was this by accident but by design and also by managed control: When you constantly cut away the things that are not working or not in synch with the market script you find that lo and behold the positions you have on tend to be behaving in the manner you would like them to.

    There are scenarios in which the market rises much higher, which would be fine, and those scenarios are 100% in keeping with our understanding of how the market works and how the players within it respond. There are also scenarios where the market falls much, much lower, depending on how certain variables play out, and we are well equipped, intellectually, emotionally and tactically, to respond to either variant as it unfolds. With that said, we see the need to "plant one's flag" and have a firm view as foolish and illogical and dangerous to one's capital -- the amount of firmness one has on a view should be "just enough" and confirmed by price as there is almost never any need for a degree of firmness greater than that when one is talking about the managing of money and the management of positions.

    Most individuals do not understand trading, what trading really is, even though the great old stories (of PTJ and Soros changing their minds on a dime) give them hints that they completely miss -- conviction in the moment is closer to trying on an article of clothing than picking out a hill to die on. They (the general population that is) do not understand fully what investing really is either, and the extent to which both investing and trading (and poker too for that matter) are deeply intertwined with fluid assessment of odds and probabilities, with no involvement of ego at all. This is a significant reason why we do what we do, in terms of communicating the "how" and the "why" behind our ideas as well as the substance of our trades themselves. This communication both greatly benefits our community and benefits us too as investors and traders, as we gain even greater clarity and control over our thought processes by way of articulating them, sharing them and even teaching them.

    As a nice example, you may think that this long reply is for you, but actually no -- written at 99 wpm, it is more for the person doing the writing, as a form of helpful clarification exercise on points that are usefully reinforced within the mind of the practitioner (even when the practitioner has deep and ample experience). Before enlightenment, chop wood, carry water. After enlightenment, chop wood, carry water (though while hopefully enjoying consistently large profits on large sums of AUM over time). Best of luck in your trading.
    Feb 12, 2015. 01:11 PM | 2 Likes Like |Link to Comment
  • In Europe's 3-Way Poker Hand, Greek Weakness Is Actually Strength [View article]
    Oh what a day! Oh what a lovely day!
    Feb 12, 2015. 07:52 AM | Likes Like |Link to Comment
  • In Europe's 3-Way Poker Hand, Greek Weakness Is Actually Strength [View article]
    What are you t a l k i n g about.

    Barry Eichengreen, among others, argues that a Grexit would be "Lehman Squared." Some very smart people have very plausible arguments that such would be epic disaster. This isn't something you hand wave about and assume "oh, it will be ok." Maybe it will, maybe it won't. But pretending there is no possibility of severe danger seems unwise.

    As for the other stuff: Mayonnaise banana? Mayonnaise banana Johannesberg? Hummina Hummina Snee.
    Feb 12, 2015. 07:46 AM | Likes Like |Link to Comment
  • In Europe's 3-Way Poker Hand, Greek Weakness Is Actually Strength [View article]
    That doesn't even make any sense. You do realize the US economy is in better shape than most anyone else in the world right?

    Because this all just sounds so problematic for the USA:

    http://bit.ly/1viT8LE
    Feb 11, 2015. 03:04 AM | 1 Like Like |Link to Comment
  • In Europe's 3-Way Poker Hand, Greek Weakness Is Actually Strength [View article]
    This was pretty much the exact same logic applied to Lehman Brothers. In fact there were prominent editorials in the WSJ with titles like "Let Lehman Fail" talking about how it would be a good lesson for those tempted by moral hazard. The problem is when the lesson winds up burning the house down.
    Feb 11, 2015. 03:00 AM | Likes Like |Link to Comment
  • In Europe's 3-Way Poker Hand, Greek Weakness Is Actually Strength [View article]
    Weimar did not give us Hitler. The austerity imposed with a deep fiscal tightening AFTER Weimar gave us hitler. And the Weimar inflation itself, by the way, was the result of an impossible-to-repay debt load placed on Germany as a form of World War I reparations. Keynes wrote a book about it called "The Consequences of the Peace," in which he warned the allies that they were being really stupid in forcing Germany to swallow such an impossible debt burden just because they could. Funny old world innit.

    The all in moment does not have a huge upside for the large stack from the perspective of being crippled in a situation where the large stack may well have only an average hand or worse. If the large stack has something like Ace Jack offsuit, and no need to risk being crippled, there is not a large gain in putting a final table placement on the line because of a forced confrontation by someone crazier or more desperate with enough chips to hurt them.

    It's not about morality at this point but risks moving forward. The nail biter aspect comes from the fact that Germany might well pull the trigger on another Lehman-like moment, with fallout consequences apparent only after the floodgates open.
    Feb 11, 2015. 02:58 AM | Likes Like |Link to Comment
  • In Europe's 3-Way Poker Hand, Greek Weakness Is Actually Strength [View article]
    Thank you so much for gracing us with your enlightened opinion. We will try to refrain from suggesting you don't think enough, and come across like an ignorant troll without knowing it.

    If Germany kicks off a catastrophic chain of events, then "yes really." These are not exactly calm times, what with tens of millions of European youth out of work, Nazi parties on the rise, and Western powers talking of arming Ukraine against Russia, even as Greece ponders a possible outside-Europe deal that might wind up giving Putin a military foothold within NATO's boundaries.

    And as for metaphors, we like metaphors. They are helpful at times and make for writing that is not dry as dust, a problem with a lot of research these days. If you do not like our writing style, by all means, never read anything we write. In fact we'd consider it a personal favor if you never read anything by Mercenary Trader ever again.

    As for what the euro will do in the event of a Grexit, if you assert with certainty it will collapse, you only show more blatant ignorance. The devil is entirely in the details, and in the perception. If the market interpretation is that Germany pushed Greece out, and that the other periphery countries were kept in line by their respective governments, a giant short squeeze in the euro might well ensue as the euro project on the whole was seen as trebling down on austerity and fiscal toughness.

    By the way, you misspelled "too" a couple times there. And forgot to capitalize your sentences. Just in case you weren't intentionally trying to come off as a buffoon.
    Feb 11, 2015. 02:51 AM | 1 Like Like |Link to Comment
  • Wary Of Gold Bugs, Bullish On Gold [View article]
    Whoosh, right over your head.
    Feb 9, 2015. 11:34 PM | 1 Like Like |Link to Comment
  • Wary Of Gold Bugs, Bullish On Gold [View article]
    After the recent jobs report, the futures market is giving 65% odds to a June hike. Overly hawkish Fed is the one fly in the ointment that could spoil the gold party. If that happens, Rand Paul might take some of the blame too.
    Feb 9, 2015. 05:28 PM | Likes Like |Link to Comment
  • Wary Of Gold Bugs, Bullish On Gold [View article]
    Actually no, it's not about criminality at all.

    If you had to design a free market economic system from scratch, and got to choose exactly how it would be run -- with the challenge that everything would be run by human beings, just like anything else -- you would run into some very thorny questions of how to set things up, particularly in terms of monetary policy, as there is no simple answer as to who or what should be responsible for it. This would be true apart from any perceived "criminal" element.

    As for not solving any real world problems: Actually we are solving the most important real world problem of all -- trading and investing well in order to make money. No need to "break" anything to us.
    Feb 9, 2015. 05:25 PM | 2 Likes Like |Link to Comment
  • Wary Of Gold Bugs, Bullish On Gold [View article]
    Thanks! More where this came from:

    http://bit.ly/1pUhfmR
    Feb 9, 2015. 05:23 PM | Likes Like |Link to Comment
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