Making sense of the Archegos Affair

Mid-week market update: You can tell a lot about the character of a market by how it reacts to news. In response to the Archegos Affair, the contagion effect has mostly been contained. Other than the share prices of Nomura, Credit Suisse, and the liquidated stocks, the market averages have been steady and this is not...

How my Sorcerer’s Apprentice trade got out of hand

Remember the story of the Sorcerer's Apprentice from Fantasia (click link for YouTube video)? Mickey Mouse played the role of a sorcerer's apprentice tasked to carry buckets of water. Instead of doing it himself, he stole the sorcerer's hat and animated a broomstick to carry the buckets for him. To speed up the work, he...

Nine years ago today…

It was nine years ago today, Humble Student of the Markets was born. My first post at the time was entitled What exactly are hedge funds hedging? I went on to show that hedge fund returns were correlated with equity returns. That makes conceptual sense, because hedge funds are in the business of taking risk and...