May 16. It’s Lost on Me

–As a result of the Washington Post investigation, Trump has finally discovered the source of White House leaks. (From WaPo: “President Trump revealed highly classified information to the Russian foreign minister and ambassador in a White House meeting last week, according to current and former U.S. officials, who said Trump’s disclosures jeopardized a critical source of intelligence on the Islamic State.”).  They’re saying that’s why the euro is making a new high for the year.  OK.  I’m not quite sure I know why anything is moving the way it is at this point.  What I do know is that another tick was removed from most euro$ midcurve straddles yesterday.  If implied volatility is like cartilage in the system, then we’re dangerously close to bone on bone at present.  It feels ok if you’re sitting down, but if you have to get up and move around, it hurts.

–$57 million for a bronze head.  By that metric, not too much looks overvalued.  “La muse Endormie counts among the most important achievements in the dawn of a new sculptural language. It is an intense purification of form and emotional resonance.”  Still.  $57 million?  It looks a bit more impressive in yen as shown on this site  http://www.artlyst.com/news/constantin-brancusi-head-smashes-artists-auction-record-christies/  ¥5,779,870,800.  I once had a lighter that looked a little bit like that.  Press the nose and the flame shot out of the head.  So…smoke ’em if you’ve got ’em cause it’s going down…

–Continued heavy buying in EDM7 calls.  For example, EDM7/EDU7 9875 call calendar 0 paid to buy June 25k.  While everything suggests that the ED curve should maintain a positive slope, further flattening could cause some (unanticipated) problems.  I don’t think it’s likely, but I will note that market measures of future inflation seem to be edging lower.  For example, the spread between the ten year treasury and tip posted a marginal new low of  184.6.  Around the time of Trump’s election it was 170, but neared 210 in late January, and has since edged lower.

 

Posted on May 16, 2017 at 5:18 am by alexmanzara · Permalink
In: Eurodollar Options

Leave a Reply