Funny (?) health care story. Stomach had been hurting for a few weeks. Got on a plane from LA to SF and all the sudden got way worse, like 9/10. Went straight to the ER after landing, threw up all over the place. Got blood tests and CT scan, morphine got pain to 7/10.
Doctor came by, said the scan showed nothing and he was discharging me, I should work on my diet. I said whoa hold on, like can you talk me through what could be going on here, this is the worst pain I've ever had, what can you rule out?
He wouldn't spend more than sixty seconds talking to me, just left and discharged me immediately. The nurse advised that I could just check right back in, so I did. Second doctor kindly went over the test results, explained that they couldn't see anything dangerous yet -
But that didn't mean something dangerous wasn't starting to happen. Gave me pain meds, said if I still needed them tomorrow to come right back in. I did, so I did. Right side of abdomen became tender to touch, white blood cell count spiked.
New CT scan confirmed appendicitis. They operated, it was necrotic and heavily impacted with fecal matter, really severe. Everyone involved was great, recovery super quick, back in the saddle the next day.
But what in god's name was that first ER doctor doing literally throwing me out of the hospital without spending more than sixty seconds with me, "work on your diet" ??? Is this the medical equivalent of the guys telling you to sell options for yield or what
Anyway I'm a nice guy but I'm absolutely putting in every formal complaint to every regulatory agency known to man, the dude should be a gardener
Also, like, I want to say this carefully. But this is a fancy private hospital and I'm obviously a very resourceful, capable, persuasive and pushy individual. Imagine what dealing with this is like if you're a vulnerable person
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Worth noting that the vix basis (spread of vix futures over S&P at the money forward vol) is at the high of its ranges of the last few years (barring the brief weird day last August)
In the pandemic it went as high as 15 but that was because there were insane massive short VIX call positions (Allianz Structured Alpha, etc) that got liquidated in the middle of a massive selloff
The VIX complex is typically used by volatility tourists, because it's simple to trade volatility with the click of a button without knowing what an option is
So elevated basis typically means outsized hedging flows by non-specialists
A few people have asked for this so I'm creating a thread-of-threads about hedge fund blowups to make those stories easier to find. Please if there are any I forgot go ahead and link them for me. First one is a general thread about 2020 pandemic blowups:
1. Lehman. Wells Fargo prop lost hundreds of millions of dollars on converts, bond basis and levered loans. Head of the desk went to the board and asked for $4 billion in balance sheet to buy everything in sight, got it, because Wells was in good shape. Better lucky than good.
2. August 2011. Had nice EURUSD and USDJPY volatility positions that helped the fund put up a good month. We added to bond basis, converts and levered loans. I sold CDS IG versus buying S&P volatility, that was choppy and the CIO covered it before it converged. But...
I shorted VXX calls in my PA after the initial volatility spike. The position got mangled by persistent backwardation and subsequent volatility spikes. I met the first and second round of margin calls and got 90% liquidated on the third. RIP, lessons learned
Okay this is a good thread topic and really is all about understanding positioning in tails and being in the flow of information as crises start to unfold. I'll tell some stories to illustrate.
Remember that all volatility selling is not the same. Some kinds of volatility selling are inherently stabilizing to markets. For example, the large institutional flows in call overwriting and cash-secured put selling for equity replacement are very stabilizing...
... as they supply dealers and volatility managers with long gamma positions, we buy when markets go down and sell when markets go up and reduce realized volatility. These are unleveraged positions which do not blow up or induce short covering.
This is a nice prompt actually. I'm going to use the word thread here because it was just so annoying trying to find all my old threads to link together :)