Plutarch's Lives:
"and so our wisdom, too, is a cheerful and a homely, not a noble and kingly wisdom; and this, observing the numerous misfortunes that attend all conditions, forbids us to grow insolent upon our present enjoyments, or to admire any man's happiness that may yet, in course of time, suffer change. For the uncertain future has yet to come, with every possible variety of fortune;"
ZH: Feb. 13, 2016
The Volatility Paradigm Has Changed
You don't say...
The doors just closed at the Hotel Californication
It's too expensive to hedge oil risk now, so the new paradigm is called "sell"...
Oil volatility:
USO oil ETF (black) with volatility (Hourly)
The short-covering rally that began on Thursday courtesy of another fake production cut rumour, traded a day's average volume in one hour. For the first time, volatility didn't go down during the two day rally - it rose...
"The biggest (%) rally since 2009" Holy fuck...
Where was I..."Hedging is futile..."
The article above, written by a statistician, explains that being long or short stock market volatility via ETFs (or options which decay even faster), is a fool's game. Because the cumulative losses exceed the cumulative gains. Per the text books, it's naturally assumed that all outcomes are randomly distributed and will continue that way into the indefinite future. Every day is uncorrelated to the next.
Binary Risk visualized:
This is a pattern recognition IQ test for statisticians to see if their eyes are open. Unfortunately, they've all failed.
Market crashes, as predicted by light refraction, are neither "random" nor "unpredictable"...
