Amid the very recent chaos, Morgan Stanley's QDS desk takes this brief pause before the Chinese panic as an opportunity to shift from risk management to thinking about what is next.
The “fast money” has sold – HF nets hit 37% on Friday (up to 39% now, 2nd %ile since 2010), and macro systematic leverage is down to the 14th %ile after having sold $375bn in equities.
But retail has not capitulated, and neither have long onlies on QDS estimates.
