Off Topic

The Life of a Gold Bug

It’s our hope to provide you with some laughs now and then. Our latest effort is publishing weekly cartoons of the “watercooler talk” in the alternatives space. This week’s cartoon is titled, “The Life of a Gold Bug.”

Let us know what you think!

P.S. — If you like these cartoons and want more from us, sign up for our weekly (sometimes bi-weekly) blog digest emails.

(Click Here for a closer look)


Weekend Reads: A Crammed Market


Gold vs. Interest Rates – (Reformed Broker)

The Life of a Gold Bug – (Attain Alternatives Blog)

Morgan Stanley: Gold Could Plunge to $800, and It’s Not Because of China’s Reserves – (Bloomberg)

Finance Related:

An honest Update on the Trend Following Landscape – (Red Rock Capital)

Infographic: Squeezing New ETFs Into a Crammed Market – (Ignites)

Nikkei buying Financial Times from Pearson for $1.3 billion – (Market Watch)

U.S. Corn, Soybeans Slide on Demand Worries – (Wall Street Journal)

Google’s Co-Founders Each Just Made $4 Billion In One Day – (Bloomberg)

CFTC plans more scrutiny over algorithmic trading – (CFTC)

U.S. SEC launches civil probe into FIFA bribery case – (Reuters)

World’s largest hedge fund Bridgewater has turned bearish on China – (Market Watch)

KIWI’S FALL FROM GRACE – (Short Side of the Long)

Just for Fun:

Blackhawks Corn Maze – (Illinois State)

5 Things to Know About Monsanto and Syngenta – (Wall Street Journal)

Alternative Links: Travels and Travails

Managed Futures and Global Macro:

The travels and travails of the macro tourist – (Barry Ritholtz)

Traders Beat Computer-Driven Hedge Funds – (Wall Street Journal)

PIMCO Launches UCITS Version of Quant Managed Futures Fund – (FIN Alternatives)


Gold plunges to five-year lows after early Asia rout – (Reuters)

GOLD MINERS SLAUGHTERED (PART II) – (The Short Side of the Long)

My Views on Gold: Setting the Record Straight – (Josh Brown)

It looks like there could be nothing  worse for your Gold exposure than doing it via Gold Miners — (Attain Alternatives Blog)


HOW will the oil price affect profitability and production? Who pumps how much at what price? – (The Economist)


Beijing may be fighting wrong battle in curbing index futures – (Reuters)


KRX clears last hurdle for EU recognition – (Korea Times)

US Dollar:

Average Tick Size in 30 Year USD Swap – (Clarusft)


Are We Nearing Peak Commodity Hatred? – (Pragmatic Capitalist)

Commodities: The Great Bear Market – (The Economist)


What 12 Months Of Record-Setting Temperatures Looks Like Across The U.S. – (Five Thirty Eight)

Weekend Reads: Rules and Warnings

Liquid Alternatives and Regulation:

Massachusetts’ Galvin to investigate alternative fund sales by advisers – (Investment News)


FINRA requests comments on proposed amendments to Rule 2210 and issues additional FAQs – (Morrison & Foerster)


China stock suspensions opens can of derivatives worms – (Reuters)

Why Can’t I Trade Chinese Stock Futures? – (Attain Alternatives Blog)


Stop the Presses: BlackRock has a Passive Index Outflow – (Reformed Broker)

Big US fund managers fight off ‘systemic’ label – (FT)

Managed Futures:

Preqin Quarterly Hedge Fund Update – (Preqin)

How Alternatives Perform vs traditional investments when volatility hits – (Investment News)


China and Commodities: Corning the Market – (The Economist)

Soldier Turned Math Wonk Shaking Up World of Commodity Trading – (Bloomberg)


Volatility-products + prayer – (Statistical Ideas)

Stock Market ≠ Economy – Exhibit A – (Dana Lyons)


U.S. watchdogs urge review of Treasury market rules after Oct. 15 price swings – (Reuters)

Democratic lawmakers ask regulators for data on U.S. bank swaps – (Reuters)

Just for Fun:

In Texas, a French Killer Is Hired to Do Job Americans Couldn’t – (Bloomberg)

Four Ways To Fund A Presidential Campaign – (FiveThirtyEight)

Interactive: Census Demographic Projections – (Time Labs)

Eric Garner’s family to receive $5.9m settlement from New York City – (The Guardian)

Infographic: Senate Votes to repeal No Child Left Behind – (National Journal)

The Incredible Story of the Baddest Female Pirate to Ever Sail the Seas – (RYOT)

Stats wiz Nate Silver: For black Americans, US is about as dangerous as Rwanda – (Raw Story)

Why Greece is a Big Fat Slow White Swan

If you’ve read Nassim Taleb (or this blog, since we mention him fairly often), then you’re probably familiar with the concept of the “black swan.” It’s a way of thinking about the “unlikely” events that no one thinks will happen – but they do, and far more often than we’d like. It’s the Black Monday crash of 1987 or the May 2010 Flash Crash – and if you aren’t prepared for the Black Swan, you’re probably going to get into trouble eventually (think Long-Term Capital Management…).

Which leads us to today’s headlines about Greek banks closing and missed debt payments and the rest – leaving global markets plunging (the new ‘plunging is down -1% to -2%).  But it isn’t just today; this uncertainty is toying with other markets as well. Which all begs the question…. Is this Greek drama a black swan event? Or more like the Austin Powers Steamroller?

The financial press sure acts like a Greek exit from the Euro is a black swan-type event. But can anyone really say these events are unexpected anymore? This doesn’t really resemble Taleb’s black swan… this is more of a slow, fat white swan that everyone has seen coming for years. It’s been a slow motion car wreck, analyzed and discussed ad nauseum for years. We’ve been unsure about how close it is (even though debt payment schedules are there for all to see), how big it will be, and so forth – but there has been no doubting it is there and it is a problem.

Just how long have we been wringing our hands over this mess?  This timeline of the Greek debt mess starts back in December of 2009 and the first Geek bailout was announced over 5 years ago … Can anyone really be surprised by what comes out of Greece anymore (or Europe for that matter)?

We can’t think of any analogy more fitting than that steamroller scene from Austin Powers. Sometimes losses are caused by unexpected events (or at least, not-widely-expected-events), but this time around the causes are right there for all to see. We can’t say for certain what the future holds, but we do know that we’d much rather face it armed with a plan, solid risk management practices, and a portion of our portfolio that can prosper even when the steamroller hits.