The data points keep flowing in.Â
- A big increase in NYSE short-interest to a new high.Â
- The daily news of another auction hammer falling in the sale of large companies to private equity groups.Â
- The strange advent of China now putting money to work in US private equity funds.Â
- Global economic strength pointing to a potential situation where the US slowing will be taken up by others.Â
- The runaway Chinese markets trample any measures or cautions put in their path.
- Commodity prices rocket up again, the index up over 160% since the start of 2005.
One further point of speculation is that the wave of M&A has been so pronounced that it can reach a scale where the number of employees getting an unexpected stock market-driven bonus can make an economic difference, possibly offsetting the misfortunes of others having to pay for gasoline with dwindling home equity funds…
We wrote about the situation at some length in our last monthly.Â Taking our medicine we padded our portfolio of long-dated options on both the put and call sides of related but not identical underlying assets.
— Kris Tuttle