So record VIX sub 10 closes has not been a boring market? I guess this leads to another old saying, "if you apply enough leverage, no market is boring.
Well, all things considered we have seen a few interesting events along the way PS. This particular year has been a nightmare. If not for some good dispersion results, I'd be looking for a new job.
Yeah, I second that... And one of the things that didn't work bigly was short bonds. And the expression just didn't matter.
Yes, the short bond trade had everything line up that was supposed to be the catalyst. Strong econ numbers, strong equities, and now the tax cut...but it just did not happen. I don't know, lower rates overseas attracting the bond bid here ?
Not exactly. Foreign buyers got killed on their dollar exposure this year. That "extra" yield cost them big time if they didn't hedge their currency risk. A common explanation is that large trade deficits, specifically to China, causes those countries to build up dollar reserves which in turn get used to buy our treasuries. One of the benefits to running large trade deficits is foreign countries become defacto lenders to the US driving rates down. It's not all benefit though, your exposing your currency to devaluation.