Wednesday, June 17, 2015

Those Who Don't Learn From 2008, Are Condemned to Repeat It

This time will be slightly "different". Don't own anything that needs to be bailed out, because it's not going to exist. 

Extreme risks and extreme complacency abound...The frogs are fully boiled and ready to be served. Fully stewed in their own juices.

A blow-off in risk-seeking appetite

Growth / value ratio

As long as Netflix and its 187 P/E keep going up, this will continue indefinitely...

A Totally Clueless Fed / Non-existent economy...
Transports / Ratio of S&P


U.S. Stocks: Massively weakened internals

Massively Weakened Trend
ADX Measures the strength of the trend

Junk Bonds Ignored

Europe / Greece Ignored
German stocks, bund yields

Emerging Markets Ignored
EM currencies with EM debt

Global carry trade unwind. Ignored.

Oil/Commodity collapse and Global growth at 10 year low (ex. 2009)

No hedging:
CBOE Put/call ratio

The complacency gap is chasmic:
Stocks versus options volatility: Per the (Ir)Rational Markets Hypothesis, Risk is always fully mis-priced at critical turning points
VIX original calculation

When living in a house packed full of dynamite, it's totally irrelevant where the first spark ignites