Business

Submitted by Salil Mehta of Statistical Ideas

High-Risk Regime's 6-Month Anniversary

On Monday, in “JPM Looks At Draghi’s ‘Package,’ Finds It ‘Solid’ But Underwhelming,” we noted that according to Mislav Matejka, investors would do well to fade the ECB’s latest attempt to jumpstart inflation, growth, and of course asset prices with Draghi's version of a Keynesian kitchen sink.

“Overall, we believe the latest package is far from a game changer,” Matejka opined.

As if the historic collapse of Valeant and his hedge fund crashing by 26% YTD was not enough, moments ago S&P added insult to injury when it warned it may downgrade Pershing Square, because "Pershing Square Holdings' net asset value has dropped substantially, largely because of a precipitous decline in the market value of Valeant  Pharmaceuticals"  and "as a result, Pershing Square's debt-to-total assets ratio increased to  above 20% as of March 15, 2016, from 15% at the end of October 2015.

Yesterday morning, after reading the latest Gartman letter, we reported that in what may have been the worst possible news for vol longs, Gartman said he had become a "buyer of the VIX." As a reminder this is what he said:

According to sources, Reuters reports that The Bank of Japan is asking market-participants about the cause of this morning's sudden 150 pip vertical rip in USDJPY. Hhmmm, we wonder? Given BoJ's "coincident" intervention in mid-Feb (marking the market bottom), we wonder who this mysterious knife-catcher is?