Sunni versus Shia. Sharia versus secular. The search for Islam’s soul. Beirut exploded, stirring dormant dogs. Paris bled, wept, raged. Border crossings closed, the far right rose. As the Thirty Years’ War escaped its borders, spilling into Europe. And the middle-east trudged inexorably toward the Dark Ages. Dusted off an anecdote from 2011 (see below). When I had more questions than answers. Back when we had more hi

Hope all goes well… “Turn to page 67,” said Wall Street’s top US equity volatility strategist, something no kid in his right mind could’ve ever dreamed of becoming. But there we were, examining his volatility-cluster chart going back to 1932. You see, when volatility jumps, it either stays elevated for a while, forming a large cluster of high readings, or it falls swiftly leaving small clusters. Since 2005, for reaso

“Like it or not, the world functions on a supply of dollars; stock and flow,” he said. “Stock is the amount of dollar debt and its equivalents. Flow is the incremental dollars of GDP created; call that global income.” The stock of debt has never been larger, in both real and nominal terms. But 2015 global GDP, converted into dollars, will contract for the first time since 2009. “The world’s gross balance sheet is big

The good news was that bad news was good news. Or so it was in October, when the weak US unemployment number sparked the strongest monthly stock market rally in years. Because if US job growth is weak, there’s no way Yellen raises rates. Without rates hikes, the strong dollar is supposedly doomed. And a weaker dollar would boost exports and overseas profits, while easing the chronic greenback shortage suffered by eme

“When Luka was four, I told his grandfather that soccer wasn’t ever going to be his thing,” said my buddy, an athlete. “He didn’t believe me. He couldn’t accept it. But I had. So I told him to go kick Luka a ball,” he explained, laughing. Grandad quickly concluded Luka should “stick to math.” Which is what he did, does. “As he grew, we spent our weekends exploring NY on the subway. Surfacing to look at monuments, sta

Hope all goes well… “How’d it go out there?” I asked Teddy, my third. He’d been playing lacrosse. And just dropped three passes in a row. But what he lacks in hand eye, he makes up for in attitude. Which is probably why his coaches keep him in. And while I can’t fathom that lacrosse is his thing, that’s really a question for him to answer. Something about himself to discover. “It was amazing Dad,” he exclaimed, eyes

“Central banks abroad are expected to pursue an expansionary monetary policy for a longer time,” announced Sweden’s Riksbank, justifying its 4th QE expansion and pushing out guidance for rate hikes, all in an effort to weaken the Kronor. Overnight Swedish rates are currently -0.35%, but were not always so. In 1992 the Riksbank raised overnight rates to a mind-bending 500% in a doomed effort to strengthen the Kronor.

“Wouldn’t you say the Japan experience resembles what’s happening all over the world?” asked the Scandinavian. Global interest rate and growth forecasts have been too high for seven years. “Are we consistently unlucky, or doing something systematically wrong?” continued the CIO. “And during this time, stimulus continually increased; we cut rates lower than forecast, printed money faster, and expanded global debts.” M

“When there’s a situation of high indebtedness, when inflation is very low, the burden of servicing the debt increases and that’s very detrimental to the economy,” warned Vitor Constancio, ECB vice-president, sitting beside Mario. “Policy accommodations must be re-examined in December,” followed Draghi, removing what little uncertainty remained that the Italian will lower interest rates below -0.20%, increase the pac

Hope all goes well… “August was a trap,” said Roadrunner, looking left and right. “Almost a mirage,” continued the market’s biggest equity volatility trader. “But something tells me it was like Bear Stearns in the summer of 2007.” Having sold vol heavily into the August panic, he’s just now reversing his book. “Buying some vol here, small though, we haven’t seen the capitulation.” VIX calls still trade at large premi