I’ll confess I’m not 100% sure why so many people seem to be zeroing in on that last-minute panic bid on Friday afternoon as a sign that the equity rout is over.

I mean better a dramatic stick save than no dramatic stick save, but Friday wasn’t the only green day last week and it wasn’t the only day that saw wild swings and panic buying.

I guess it’s not entirely clear to me why anyone should read anything more into Friday than they did into Tuesday.

i’m having to restrain myself from responding to morons. reader asks: “if last week was so bad, why was there a green close on Friday?”

it’s like: “motherfucker I don’t know, that’s like asking why the last bullet fired in a crazy ass, 5-day-long, gun battle didn’t hit someone”

— Walter White (@heisenbergrpt) February 11, 2018

One excuse for celebrating the late-day Friday action seems to revolve around the notion that the systematic deleveraging is over.

But even that notion is thrown into question by folks who seem to be hellbent on insisting that the deleveraging never occurred in the first place or if it did, it didn’t have a material impact.

This debate always devolves into the absurd after acute risk-off events and this time is no exception.

On one hand are the quants who claim they had nothing to do with it, and on the other hand are the numbers which seem to tell a different story. And the irony of ironies here is that quants are by definition all about the numbers so when the rest of read these rebuttals of the “blame the quants” thesis we’re all kind of listening, nodding our heads and thinking “ok, but… numbers.”

And by “numbers” we mean the apparent fact that CTAs had one of their worst 5-day stretches on record through Wednesday…

And estimates from the likes of BofAML whose admittedly imperfect models suggest that CTAs and risk parity were effectively forced to offload $200 billion in equity exposure.

And I mean everyone knows what happens (or at least what common sense dictates should happen) to risk parity in an environment where the stock-bond return correlation flips positive. It’s the same thing that happens to balanced equity portfolios that depend on the diversification inherent in a negative return correlation. Recall this from Goldman, as it relates to the week before last – i.e. to the week during with the above-consensus AHE print seemed to validate the inflation narrative and thus underpin the bearish bonds thesis: