Weekend readings, 2016/12/30

Paul Krugman: And the Trade War Came

Corporate America is still in denial about the prospects for a global trade war, even though protectionism was a central theme of the Trump campaign. … The … relevant legislation gives the occupant of the White House remarkable leeway should he choose to go protectionist.

Looks like a trade war is here…read how to benefit from this here


How Important Is Information from FOMC Minutes?

FOMC minutes releases can have sizable impacts on Treasury bond yields. The impacts are largest when the tone of the minutes differs greatly from the tone of the statement, presumably leading markets to change their expectations of future monetary policy.

Analytical look at whether FOMC minute releases sway financial markets and how so


Near-Term Call Buying in UVXY

Paper bought over 7700 UVXY Dec30 8 calls paying as much as .20 and as little as .13 throughout the day.

At the highs today, UVXY touched $8.92, meaning the option buyer here potentially made more than 70c/share or $539K in 2 days on an investment of roughly $130K….wow!


Can Trump Pick Up Enough Crossover Democrats to Avoid Senate Filibusters?

Republicans control the executive branch and both houses in Congress. That does not necessarily mean Trump can get the legislation he wants passed.

A great analysis about how easily Trump’s policies can get past Congress


Artificial Intelligence, Automation, and the Economy

This report examines the expected impact of AI-driven automation on the economy, and describes broad strategies that could increase the benefits of AI and mitigate its costs.

Whitehouse article on the opportunities/threats and policy responses as related to AI


Aggressive Call Buying in CLF

Traders are buying CLF Jan06 weekly 10 calls for .04. These options are 20% out of the money with just a week to expire.

With Trump coming into office, this trade may work if there’s more talk about fiscal stimulus


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