Short term speculative profits, made by exploiting small price differences within and between markets, are one of the ways in which hedge funds make profit.
Err, no, exploiting pricing differences is arbitrage, which is not speculation. They’re opposites of each other.
In arbitrage the buying and selling is done at the same time. No leg hanging in the air. Prices are this, right now, buy and sell right now. That’s certainty.
Speculation is the opposite. Prices are this now and they might be that in the future. So, buy/sell now to sell/buy in the future.
Arbitrage does not involve price risk – although it does counterparty, obviously. Speculation involves price risk. That’s why they’re opposites.
The underlying point being made is no less awful:
And in an instant I understood exactly why we are having so many reports on inflation expectations at the moment when the real prospects for it arising (most especially now the Indian variant of Covid appears rampant) looks to be very low indeed. The fact is that markets – and most especially hedge funds – survive on market turmoil.
That’s the Jooos again.
And then there’s this:
So, is there inflation risk at present? I still do not think so, a short term possible burst when the real markets of the world actually reopen (if they ever do in the way that they once existed) apart. Thereafter I see no reason for inflation expectation. Money creation will certainly not be a cause.
He’s not even understanding his own MMT, is he? Stimulus will create inflation at some point. You know, as a result of money creation?