#risk arbitrage

[isomorphismes]

Morgan Stanley’s risk arbitrage [programmatic trading] desk in the 1980’s were set up to develop relationships and gather information, not to make money.

Rick Bookstaber, _demon of our own design_

[ennovance]

🚀𝑻𝒘𝒐‑𝑴𝒐𝒏𝒕𝒉 𝑬𝒒𝒖𝒊𝒕𝒚 𝑴𝒐𝒎𝒆𝒏𝒕𝒖𝒎 𝑹𝒆𝒂𝒄𝒉𝒆𝒔 𝑹𝒂𝒓𝒆 𝑯𝒊𝒔𝒕𝒐𝒓𝒊𝒄𝒂𝒍 𝑬𝒙𝒕𝒓𝒆𝒎𝒆𝒔

S&P +16% in Apr–May = 99th‑pct 2‑mo momentum since ’45.

Only 4 analogs this fast: ’74, ’09, ’20 (post‑recession resets) and ’87 (non‑recession melt‑up).

The only non‑recession precedent is 1987, when a +17% Jan–Feb surge ran until summer… then the S&P dropped ‑33% in <2 months, including ‑20.5% on Black Monday.

Today’s backdrop rhymes: stretched valuations, hawkish repricing, deficit optics, momentum‑heavy tape, but with AI‑driven earnings strength on the other side.

Binary vibes. Fat‑tail season. Velocity is the signal.

#Riskarb #Hedgefund #Investor ht:db @ennovance

www.ennovance.com

[ennovance]

Fixed-income yields have surged past S&P 500 forward earnings yields—𝐫𝐢𝐬𝐤 𝐢𝐬 𝐟𝐥𝐚𝐭-𝐨𝐮𝐭 𝐦𝐢𝐬𝐩𝐫𝐢𝐜𝐞𝐝. At today’s rates, Treasuries > Equities.

𝐀𝐫𝐞 𝐲𝐨𝐮 𝐛𝐞𝐢𝐧𝐠 𝐩𝐚𝐢𝐝 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐫𝐢𝐬𝐤 𝐲𝐨𝐮’𝐫𝐞 𝐭𝐚𝐤𝐢𝐧𝐠?

#Investing #Yields #FixedIncome #RiskArb #Ennovance

https://x.com/mohossain/status/1961085226945282051?s=46

[ennovance]

Are Crowded Quant Managers’ Mass Exits in Semis & Software Igniting a Staples-Fueled Consumer Rally or Just Pressing Pause on the Party?

#Riskarb #investor ht:mos-pb #ennovance #hedgefund

https://x.com/mohossain/status/1948875981533405320?s=46

[ennovance]

Economic policy uncertainty is spiking higher, but credit spreads are not widening.

The question is if persistently elevated policy uncertainty will begin to have a negative impact on capex spending and hiring decisions.

https://x.com/mohossain/status/1890792811269648620?s=46

[ennovance]

Big Banks Cook Up New Way to Unload Risk

“Banks are selling risk to #hedgefunds, #privateequity firms through so-called synthetic #risk transfers…. synthetic risk transfers are expensive for #banks but less costly than taking the full capital charges on the underlying assets. They are lucrative for the investors, who can typically get returns of around 15% or more”

https://www.wsj.com/finance/banking/bank-synthetic-risk-transfers-basel-endgame-62410f6c @wsj #riskarb #RiskManagement @ilpaorg #lbo #buyouts #privatedebt #Investment #credit #ennovance

[ennovance]

…how investors are underpricing climate risks

https://www.ft.com/content/899472a8-e5e2-4fde-bc91-7e548ba35294 @ft #investor #riskmanagement #esg

[ennovance]

Debt ceiling …

“Could default happen? The answer is “yes”. One reason is that the parties are vastly apart. The Republicans’ proposals would impose a 47 per cent cut in total real non-military, discretionary spending between 2024 and 2033. This is a huge gap to bridge, even if the mood music may be improving.”

https://www.ft.com/content/05c42080-e3d9-4d3c-8651-e40c548efaa3 #CDS #credit #Risksrbitrage #investor