Tuesday , April 20 2021
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Tag Archives: Premium

A Tiger Can’t Change Its Stripes

Oh, wait. That’s not a tiger. That’s a raccoon. In Epsilon Theory-speak, a raccoon is a financial scammer, a fraud. Raccoons are everywhere in the investment world. I hate raccoons. Over the past few days you’ve probably seen an article or two about Bill Hwang and the collapse of Archegos Capital, Hwang’s hedge fund with an estimated $10-15 billion in assets that was levered up more than 5x across multiple prime brokers, and came tumbling down in a “margin call”...

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A Conversation with Howard Marks

Brent Donnelly is a senior risk-taker and FX market maker at HSBC New York and has been trading foreign exchange since 1995. He is the author of The Art of Currency Trading (Wiley, 2019) and his latest book, Alpha Trader, hits the shelves in Q2 2021. You can contact Brent at [email protected] and on Twitter at @donnelly_brent. As with all of our guest contributors, Brent’s post may not represent the views of Epsilon Theory or Second Foundation Partners, and should not be...

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The Best Way to Rob a Bank

The best way to rob a bank is to own a bank. I think that the collapse over the past week of Greensill Capital has a lot of systemic risk embedded within it, particularly as the fraudulent deals between Greensill and its major sponsors – Softbank and Credit Suisse – come to light. And that’s not even considering Greensill’s second tier of sponsors – entities like General Atlantic and the UK government – all of whom are up to their eyeballs in really dicey arrangements....

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A Freaky Circle

Source: Thor Ragnarok A quick but important note: We don’t have a dog in this fight. But we are conflicted. We have subscribers at almost all of the firms being mentioned. Our principals have done business with many of them. We’ve been clients of some, too. We like most of them. On both sides. We also don’t really care what any of them think. Make of it what you will, but clear eyes, even with us. THOR: How did you…KORG: Yeah, no. This whole thing is a circle. But...

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The Fed’s Kryptonite

This piece is written by a third party because we think highly of the author and their perspective. It may not represent the views of Epsilon Theory or Second Foundation Partners, and should not be construed as advice to purchase or sell any security. Overview Last November in Blue Wave I wrote: “The coming stimulus isn’t a panacea! It means massive deficits will persist. They will require higher taxes and incredible amounts of US Treasury issuance. Higher TAXES and...

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The Third Rail Switch

For most of the last 40 years – at least since Tip O’Neill or one of his aides coined the term – the third rail of US politics has been Social Security. It is strange to think about. We are all MMTers now, after all, and what’re a few trillion dollars among friends? In 2021, entitlement reform is a third rail in the same way that a high-voltage power line is a third rail. Sure, it will electrocute you, but who is going to go through the trouble of getting to it? We...

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Hunger Games

Epsilon Theory PDF Download (paid subscribers only): Hunger Games And may the odds be ever in your favor! You have been told that investing in the stock market is like betting on a sports game. You have been told that you are a SPECTATOR in the game of markets, that you are WATCHING a game being played out in front of you by lots of different companies. You have been told that you should make ‘bets’ on those companies based on how well you think those companies can...

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When Does the Game Stop?

This piece is written by a third party because we think highly of the author and their perspective. It may not represent the views of Epsilon Theory or Second Foundation Partners, and should not be construed as advice to purchase or sell any security. Pete published this yesterday (Feb. 1) on his website. Takeaways The current state of equity markets is part of a broader progression over many years, as was the South Sea bubble, which has many lessons applicable to current...

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The Invulnerable Hero*

Siegfried bathes in dragon’s blood, from Fritz Lang’s Die Nibelungen (1924) The Invulnerable Hero* is among our most treasured and recurring tropes. It is the core feature of the great German epic, the Nibelungenlied. You probably know it better as the story of Siegfried from Wagner’s treatment of the story in his famed Ring Cycle. Siegfried slays a dragon and bathes in its blood, that is, everywhere except for the spot on his back covered by a drifting linden leaf. He...

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The Zimbabwe Event

Covid funeral in HarareOver the past two weeks, three senior Cabinet officials in Zimbabwe (including the Foreign Minister and the Infrastructure Minister) have died from Covid. Not gotten sick. Died. More broadly, reported Covid cases and deaths have exploded in this country of 15 million just in the month of January. The unreported numbers are certainly much higher, as about 90% of Zimbabwe’s population works outside of the formal economy, and the majority of Zimbabweans have little...

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