"In index arb, you’re short S&P futures and long the basket of stocks in giant size, which means that you have an enormous amount of interest rate and dividend risk." If you are long the stocks why do you have dividend risk?
To seed, build, and nurture timeless, intangible human capitals — such as resilience, trust, truth, evolution, fulfilment, quality, peace, patience, discipline, relationships and conviction — in order to elevate human judgment, deepen relationships, and restore sacred trusteeship and stewardship of long-term firm value across generations.
A refreshing take on our business world and capitalism.
A reflection on why today’s capital architectures—PE, VC, Hedge funds, SPAC, Alt funds, Rollups—mostly fail to build and nuture what time can trust.
“Built to Be Left.”
A quiet anatomy of extraction, abandonment, and the collapse of stewardship.
"Principal-Agent Risk is not a flaw in the system.
The bond basis is just taking bets that yields on govies will regress back to those expected from futures. Hence the long cash/short futures or vice versa. I'm sure he's doing full curve trades - ie. he's making basis bets at every point on the curve. The fact that we aren't hearing about more such losses tells me his leverage was excessively high. The treasury swings in the last few sessions have been large, but I've certainly seen bigger ones (anyone remember the Debt Ceiling Crisis? 80bp move in the 10 year in a couple weeks).
I just watched the first episode of The House of David on Amazon. Very timely, although both David and Saul started out well and went nuts when they had power for too long. Quite the morality tale.
Great production values and acting so far. They stray from the Biblical narrative so if that offends you, it will not be fun. I saw it as an opportunity to read Samuel and compare. The David actor is a beautiful man in an unconventional way. Jonathan is pretty hot. I live in the desert and love desert landscapes.
"You have to remain humble in the markets, because karma has everyone’s address."
This is the greatest quote I've read in a while. Love it.
I read that dogs have a master and cats have servants.
Either way I still pick up the dog poop & clean the litter box.
“Cats don’t care if you’re worth $9.3 billion, they’re going to do what the hell they want to do.” … and some of your friends too!
Financial markets reveal character adroitly and painfully. Best to know pain tolerance before entering, lest exit be brutalized.
"In index arb, you’re short S&P futures and long the basket of stocks in giant size, which means that you have an enormous amount of interest rate and dividend risk." If you are long the stocks why do you have dividend risk?
Hello there,
Huge Respect for your work!
New here. No huge reader base Yet.
But the work has waited long to be spoken.
Its truths have roots older than this platform.
My Sub-stack Purpose
To seed, build, and nurture timeless, intangible human capitals — such as resilience, trust, truth, evolution, fulfilment, quality, peace, patience, discipline, relationships and conviction — in order to elevate human judgment, deepen relationships, and restore sacred trusteeship and stewardship of long-term firm value across generations.
A refreshing take on our business world and capitalism.
A reflection on why today’s capital architectures—PE, VC, Hedge funds, SPAC, Alt funds, Rollups—mostly fail to build and nuture what time can trust.
“Built to Be Left.”
A quiet anatomy of extraction, abandonment, and the collapse of stewardship.
"Principal-Agent Risk is not a flaw in the system.
It is the system’s operating principle”
Experience first. Return if it speaks to you.
- The Silent Treasury
https://tinyurl.com/48m97w5e
The bond basis is just taking bets that yields on govies will regress back to those expected from futures. Hence the long cash/short futures or vice versa. I'm sure he's doing full curve trades - ie. he's making basis bets at every point on the curve. The fact that we aren't hearing about more such losses tells me his leverage was excessively high. The treasury swings in the last few sessions have been large, but I've certainly seen bigger ones (anyone remember the Debt Ceiling Crisis? 80bp move in the 10 year in a couple weeks).
Once again, well done. Big fan. 59 years old and struggling to reach your level of "don't give a shit", but working hard at it.
I just watched the first episode of The House of David on Amazon. Very timely, although both David and Saul started out well and went nuts when they had power for too long. Quite the morality tale.
Good show?
Great production values and acting so far. They stray from the Biblical narrative so if that offends you, it will not be fun. I saw it as an opportunity to read Samuel and compare. The David actor is a beautiful man in an unconventional way. Jonathan is pretty hot. I live in the desert and love desert landscapes.