We've never seen a situation before where markets are RISK OFF, yet investors are complacent. Meaning that all Central Banks have accomplished is to generate EXTREME investor complacency in the face of EXTREME RISK...
RISK OFF
USD / JPY
Complacency
VXO/VIX ratio with VIX:
Central Banks are flooring the accelerator but the car isn't moving. The fact that U.S. recession stocks are in blow-off mode informs that ALL global asset classes are now in RISK OFF mode, with a couple of notable exceptions. As they say, the exception proves the rule...
The one RISK ON trade remaining, is the "flight from China" trade aka. Vancouver real estate, and New Zealand stocks. In vain response, the Commie Capitalists are fighting capital flight by strengthening the Yuan. In other words, they are choosing short-term financial strength over long-term economic obliteration. A Faustian choice.
The Yen/Yuan (red) versus Yuan/dollar (black)
One of these currency pairs is RISK OFF, while the other is RISK ON. This won't last...every decline in the Yen/Yuan pair since last August has coincided with renewed selling of the Yuan/dollar...
New Zealand stocks: This will end extraordinarily badly...
Special K: Those who think that this is "bullish" are in for a big fucking surprise...
