h/t to Adam at Thomson Reuters
Lord, grant me the serenity to accept the things I cannot hedge, courage to hedge the things I can, and wisdom to know the difference. If else fails, give me gold to buy water, canned goods, and ammo! The situation probably isn’t that dire but why risk it? You never know. If Hillary wins, half the populace will be angrier than ever. If Donald wins, half the populace will be more anxious than ever. Which outcome is worse? No idea but either way half the country will be operating with a chip on its shoulder. That sentiment is driving the market. Rates definitely have room to run higher but they could just as easily revisit record lows. We’re sitting on a steep duration ledge and a bounce in realized vol is long overdue Dynamic decision-making might get costly but risk managers don’t have much of a choice. Gotta keep hedge coverage within model variance. Add margin to pricing and hope week-over-week volatility is contained…
Lord, grant me the serenity to accept the things I cannot hedge, courage to hedge the things I can, and wisdom to know the difference. If else fails, give me gold to buy water, canned goods, and ammo! The situation probably isn’t that dire but why risk it? You never know. If Hillary wins, half the populace will be angrier than ever. If Donald wins, half the populace will be more anxious than ever. Which outcome is worse? No idea but either way half the country will be operating with a chip on its shoulder. That sentiment is driving the market. Rates definitely have room to run higher but they could just as easily revisit record lows. We’re sitting on a steep duration ledge and a bounce in realized vol is long overdue Dynamic decision-making might get costly but risk managers don’t have much of a choice. Gotta keep hedge coverage within model variance. Add margin to pricing and hope week-over-week volatility is contained…
AQ
