Category Archives: Risk

Whack SPACs

Contrarian shares a cautionary tale: https://seekingalpha.com/article/4401822-current-speculative-bubble-dwarfs-1999-2000 From highly shorted equities to SPACs to the largest capitalization market stocks, an almost all encompassing pervasive bubble has made future real returns lower than any other time in modern market history for the U.S. stock market. The abysmal level of future expected real returns is dismal even compared to 2000Continue reading “Whack SPACs”

Gamma Games

Single stock open-interest at all-time-high levels, which is why today’s expiry is important for stocks, especially for names with large open interest in at-the-money (ATM) 15-Jan options, At the close, the market is down 0.7% while gamma exposure spiking up all time high as the following chart from Sundial Research shows. “Dealers are short callsContinue reading “Gamma Games”

Red Ponzi Debt Market

Investor confidence in China Fortune Land Development Co. Ltd. is tumbling as concerns grow about its debt repayment abilities just as Beijing steps up efforts to cut risk in the real estate sector. The mid-sized developer’s dollar bonds fell to record lows earlier Tuesday, with some rebounding but a note due 2024 still down at 49.8 centsContinue reading “Red Ponzi Debt Market”

The Big Short 2.0

Per MarketWatch, Michael Burry of “The Big Short” fame is back and all-in on a TSLA short. As of January 11, 2021, Tesla is now trading at about 29x sales. Burry observed that showed the company’s sale of regulatory credits was necessary for profitability. He also pointed out the company’s flat revenues and Tesla’s “inferiorContinue reading “The Big Short 2.0”

Office Apocalypse

As reported in Bloomberg, new leases in the fourth quarter dropped 64% YoY to 4.6 million square feet. Average asking rents for the highest-quality offices fell 8.6% to $90.42 a square foot, a decline that doesn’t capture concessions such as free months or tenant-improvement allowances. And, as the graph above indicates, this may just beContinue reading “Office Apocalypse”