As we learned this week, Wall Street conveniently assumes away Crash Risk, which allows them to maximize leverage without any concern for the end result. Free bailouts, remember? In a zero volatility environment, survivor bias means that the remaining hedge funds are the least hedged and most highly leveraged:
We see that each risk "event" has garnered less and less volatility, making hedging increasingly less profitable. Unfortunately, risk is cumulative. Risks don't go away they just multiply quietly while low volatility gets conflated with low risk...
Case in point, the two top performing stock markets this week were France and South Korea. As concerns for war with the North have intensified, stocks have accelerated:
Likewise, deregulation of risk is always "bullish" as well. Whereas last year, the SEC was looking to reign in 3x leveraged ETFs, under Trump they just approved the first FULL RETARD 4x leveraged ETF
"More risk please"
Banks:
Paying ever-more, to get ever-less...
100% Pure Ponzi. Accept no substitutes
