Global Correction

For yesterday’s info-porn, we looked at the YTD and QTD global returns. Today, we have this informative interactive map from the public section of the WSJ:

click for interactive map

Global_correction

 

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What's been said:

Discussions found on the web:
  1. Fred commented on Aug 17

    The 90 day TBill yield dropped ~ 9% yesterday. That has only happen 22 times in the past. The average return 12 months out is ~ 22%.

  2. Steve C commented on Aug 17

    …and when the VIX doubles in a month (this time, 2.5X) the DJIA is up, on average, 12.6%.

  3. Steve C commented on Aug 17

    I forgot to add:
    “up 12.6% in 6 months time.”

  4. Stuart commented on Aug 17

    As Desi Arnaz says….

    “Paaaaulsonnnn,..you got sum ‘xplaininnn’ to dooooo”

    Where’s that containment? I know, what else was he going to say. Perhaps, prudence and caution is warranted as this has a good chance of spreading do the labryinth of derivatives to navigate through. Doug Kass called it well.

  5. tibby commented on Aug 17

    They mistook Burma/Myanmar for Thailand.

  6. nick gogerty commented on Aug 18

    I think the most interesting thing about this would be the covariance matrix. All those VaR models fall apart when something like this happens. Risk models always fail to include the “exogenous” shock. Does anyone know of literature or work done on measuring a covariance matrix net convergence “delta or gamma” equivelant. The basic VaR approach is bogus and it is amazing how many PHd’s fail these common sense tests. Buy the way, these exogenous shock panics and the market over reaction provide great post event spread trade opportunities. After the noise is gone, these economies will keep humming along, assuming the central banks don’t panic.

  7. Winston Munn commented on Aug 18

    nick wrote: “The basic VaR approach is bogus and it is amazing how many PHd’s fail these common sense tests.”

    Not so amazing when you realize that PhD courses are mainly about managing the egos of existing PhDs and regurgitating their postulations in a favourable light.

    Critical thinking? Nawwwwwww.

  8. Paul commented on Aug 20

    Let’s consider: 1 month bills at 1.6% nominal annual return (a real return of negative 1.3% minimum) or gold – which is safer????

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