Discover and read the best of Twitter Threads about #volatilitylaundering
Most recents (3)
A recent FT piece defends private equity’s approach to valuations. As an LP in over 100+ funds, my experience completely agrees with @CliffordAsness when he calls it volatility laundering. Here's what I've been seeing in relation to the author's claims:
ft.com/content/22a81f…
ft.com/content/22a81f…
One note: the quality and behavior of GP's vary considerably and some are very transparent and consistent in their approach. But this issue of #volatilitylaundering is pervasive enough that investors need to go in with skepticism.
The author states private companies are more resilient than public companies: 
1/7 Must read article by @kayewiggins @FinancialTimes on how the #volatilitylaundering complex has built & sold a pile of CDOs (they changed the "D" to an "F")
on.ft.com/3GP1wkN
on.ft.com/3GP1wkN
2/7 Since there is no disclosure or reporting it’s tough to tell where the bodies are.
The article explains how "CFOs introduce another layer of leverage" in a PE pyramid built on debt.
Which might be suboptimal....
The article explains how "CFOs introduce another layer of leverage" in a PE pyramid built on debt.
Which might be suboptimal....
3/7 As @hkuppy's killer thread explains how the debt itself in these structures may be comically mismarked
FOMC week is behind us. First a scorecard update. The realized moves of the $SPX on days around the meeting. Over the last 6 meetings, realized vol on meeting day is 36%. There have often been large moves the following day. Realized vol day of and day+1 is also 36%.
As @FerroTV pointed out, the most informative part of the presser might have been the “Bloomberg on delay” moment when a reporter told Powell the market was up in response to the statement and then asked how he thinks about that.
Adjusted for what we'd expect from a Fed Chair, the reaction was almost visceral. Fed views a market rally as inconsistent, even problematic, relative to necessary path. Much of the discussion over the preceding months has been about the need for tighter financial conditions.
