FANGMAN, Hangman And The Bubble’s Double Trouble

Bridgewater is the world’s largest hedge fund (AUM of $125 billion) and is the famed practitioner of such arcane maneuvers as the “risk parity trade”, which is a fancy term for selling “vol” on leverage—lots of it.

Of course, without the Fed’s massive money-pumping and price-keeping operations since the 2008 financial crisis, “vol” wouldn’t even be an asset class.

That’s because in an honest market there would be no way to profit by selling “vol” day after day, week after week and year after year. All those plump nickels that Ray Dalio’s fund has been picking up in front of the proverbial steamroller for lo these many years exist only because the central bank has systematically falsified financial asset prices.

So doing, it has drastically and artificially crushed volatility, making shorting (selling) it a no-brainer. Seemingly.

SUBSCRIBE TO CONTINUE READING

$39
Monthly
$99
Quarterly
$365
Yearly



Already a subscriber?

Login below!