Black Swan

Trader Exclaims "Markets Are In An Alternate Universe"

"This has been a momentum-driven market rather than one driven by well-reasoned fundamental analysis... It’s amazing what pseudo-intellectual havoc can be caused by a couple hundred points bounce in the markets..."

Wall Street Analysts Are Slowly Losing It

"I can’t justify any of this. The lesson investors are getting is that everything is a buying opportunity and you need to not miss the boat. Brexit? Bullish. Trump winning the election? Bullish. Italy saying no to the referendum and the Prime Minister handing in his resignation? Bullish. Heck, all we need is the entire Belgian banking system to go kablooey and the S&P 500 will be at 3,000 by Christmas Eve."

Turkeys Were Optimistic On Wednesday – Unicorns May Have Less Than A Week

All the time prior the turkey believes life is grand and will continue forever, and the farmer has nothing but his best interest at heart, caring for him with plenty of food, water, and shelter. To convince him otherwise is a fools-errand. Then – Thursday happens. A similar event may also be on the horizon, but this time – it doesn’t involve turkeys. No, this time it involves a creature once considered so far above and beyond reproach, to even question its business model, metrics, or valuation was seen as blasphemy.

drhousingbubble's picture

With a new administration coming into office in 2017, it might be useful to examine what potential policies will be enacted that may have an impact on housing.  The market responded to the election results as if it were a Black Swan event.  Most of the comments preceding the election almost assumed it was a foregone conclusion that Hillary Clinton was going to be the next President.  Clearly that was not the case.  The bond markets had an immediate sizable reaction.  We still don’t have the full details on how things will change but there are some changes planned that may have an impact on housing.  It is hard to see how rental Armageddon changes because of this.  

The Serfs Have Rebelled - Europe Next?

Hayek’s The Road to Serfdom described how personal freedoms are progressively eroded by the state in the name of the common good. In the main, the serfs are patient and tolerant of their masters, but in a democracy, the establishment behind the state risks being challenged. And that has happened twice this year, first with Brexit and now with Trump in America... but remember the serfs never win, as Hayek recognised.

French PM: "Europe Is In Danger Of Falling Apart"

"Europe is in danger of falling apart," French prime minister Manuel Valls said at an event organized by the Sueddeutsche Zeitung newspaper. "So Germany and France have a huge responsibility."

European Politicians Terrified By "Horror Scenario" After Brexit, Trump

In the aftermath of Brexit and Trump, a European populist tsunami that seemed outlandish a few months ago is becoming reality, and the consequences for Europe's own political landscape are potentially huge. It is, as one European politican called it, a "horror scenario" and it is slowly coming true.

Citi: "A Clinton Presidency Will Be Marked By Near-Continuous Investigations, Impeachment Risk"

"Mr Trump ‎may be heading for defeat but the prevalence of low trust, identity politics and demographic divides across the developed world suggests that he will not be the last non-mainstream candidate to come close to power.  Moreover, a Clinton presidency is highly likely to be marked by near-continuous investigations as well as the risk of impeachment." - Citi

"The Frightening Thing Is People Don't Know They're Selling Insurance" - An Interview With An Ex-Canyon CDS Trader

“the world has now shifted completely in the opposite direction, that people are selling that insurance over and over and over again, not recognizing what they're actually selling, and not necessarily conducting an evaluation of, are there cheaper ways to sell that-- or more expensive ways to sell that same insurance, effectively capturing more premium for doing the same thing.

Citi: The FBI's Blockbuster Announcement "Could Have A Meaningful Impact On The Presidential Race"

"We have warned throughout the campaign that Black Swan risks are extraordinarily high, and hence have been less bullish for a Clinton victory than consensus. These developments do constitute an "October Surprise" that could have a meaningful impact on the race. We emphasize the potential for more Black Swan events emerging making things more complicated for forecasters and pollsters" - Citi