HEDGED.BIZ

A look at economics, markets, finance and the irrational human being

Long short, hedging and market neutrality under unruly markets

In times of unruly markets, even long short, hedged or market neutral portfolios can behave in unexpected ways. This may be because of factor biases or technical reasons. Factor biases are the most obvious reason for unexpected behaviour. If you’re net long or short a sector, size, valuation, country, or cyclical v defensive factor, your
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Ten Seconds Never Felt So Long. 2025 Trade War.

The US economy a year ago was experiencing strong growth from the momentum of a fiscal impulse as well as expectations of rate cuts, of which we got 3 beginning in July. Did the US economy need rate cuts? Probably not on the strength of coincident data at the time. But from the perspective of
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Tariff Wars. The Best Response to Tariffs is to Cut One’s Own.

It is now time for the world to generally cut tariffs in response to America raising tariffs. Tariffs are analogous to punishing one’s kids for preferring the neighbour’s cooking. The tariff nation’s population pays. Tariffs are the cost of accessing the US consumer. The world has been too reliant on the US consumer. Time to
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2025 Geo Macro Scenario A

America seeks a new world order based on areas of influence. It has no time, interest or resources to deal with the Asian and European timezones. It seeks a pragmatic solution to the political and economic problems in those timezones. America’s area of influence is geographically defined and is latitudinally expansionist. The Asian timezone will
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Fiction. Foundation CG. 2025 02

I have a dream… We achieve breakthroughs in material science that lets us manipulate molecules to obtain all kinds of new properties from old materials, like plant fibre. I dream that though material science and nanotechnology we invent carbonium, a class of cellulose which is basically wood, treated and reconstituted so that its structure gives
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