Business

A week ago we exposed the real reason for the "crazy volatility" in crude oil markets, and specifically the driver of the immense rally (despite weak data) in crude - a massive liquidation of the triple-inverse ETF DWTI. Today we have another mysterious, even larger spike in crude oil prices (for no good reason other than 'old' misunderstood rumors about OPEC production cuts). The driver, it would appear, is another liquidation as the ETF trades at a huge discount to NAV. The last time this happened, it didn't last.

2016 is shaping up to be the year that everyone finally comes to terms with the fact that the monetary emperors truly have no clothes.

To be sure, it’s been a long time coming. For nearly 8 years, market participants and economists convinced themselves that the answer was always “more Keynes.” Global trade still stagnant? Cut rates. Economic growth still stuck in neutral? Buy more assets.

With the S&P down just about 10% YTD, hedge funds especially of the levered-beta variety have not had a good year; that said, it would be fair to say that many have not had a terrible year either. In fact, as the following table of hedge fund performance by some of the most marquee names shows, while there are certain outliers in the YTD column some 6 weeks into 2016, most of the hedge funds have actually done that, and while most are around the flatline, there are some notable outliers, perhaps most notably Boaz Weinstein Saba which late last year many had left for dead.

Another day, another OPEC Production Cut rumor, and another massive swing in WTI Crude oil prices. But having run stops to these levels, we wonder what happens next?

This 11.5% ramp is among the biggest single-day moves in oil's history...

Driving realized volatility near record highs...

But sadly, stocks are not correlating...

The Fed's Bill Dudley just unleashed the most cognitively dissonant statement of his career. That superlative is highlighted by theses two headlines:

• DUDLEY SAYS U.S. ECONOMY IS IN QUITE GOOD SHAPE
• DUDLEY: DON'T SEE NEGATIVE RATES HAVING 'BIG CONSEQUENCE'

Try telling The BoJ's Kuroda that!!

Nope - no consequence at all...

Yet again his comments confirm The Fed's utter confusion...

Today: