Wrong on The Vixx

I got this one wrong; The vixx has continued to stay at depressed levels. While I continue to believe that this lull will likely end soon, and with a strong spike, for now the timing in my call looks pretty poor. If however, I were a money manager, I would be loading up on puts on the S&P. My stock market bearishness, which has now been here for some time, was only made stronger by reading Kyle Bass' December letter to investors (http://www.scribd.com/doc/75784106/Hayman-Capital-Letter-Dec-14). It is worth a read. A focal point of the letter is how investors' counter-party risk concerns are such that they would rather give up the yield they could attain by parking their shares at banks' for prime brokerage use (the banks would lend those shares to other clients looking to borrow stock) and put them at third party custodians. This lack of trust is the natural beginning of the de-leveraging process, one that even central bankers might not be able to contain.

Gold didn't quite plummet  100 dollars on Wednesday, but it came awfully close. As has been the case, the sell offs in gold are pronounced, while the rallies are slow. Today, we are seeing gold continuing to rally nearly every time it comes into the 1590 area. So what happened to the gold story? The problem for gold right now is that we're in a deflationary environment. The market wanted QE3, but didn't get it. Europe hasn't indicated that they will print money, and for now, that will keep a lid on gold. Eventually however, the story will change. When push comes to shove, the European countries will have no choice but to print, and inflationary pressures will re-emerge which is positive for gold. 

I will be away for the next week, but will be getting back to it upon my return. Everyone have a great holiday.

-Ben