Convexity

Deutsche: "We Are Almost At The Point Beyond Which There Will Be No More Bubbles"

"It is clear that the spiraling trajectory cannot continue indefinitely; it has to stop at some point beyond which there will be no more bubbles. In many ways, it looks like the post-2008 represents the last lapse. A new game has to be reinvented for the old future to materialize, or a different paradigm altogether has to take over."

Deutsche Bank Explains The Five Biggest "Market Conundrums"

Deutsche Bank has highlighted the five most upsetting conundrums about the equity market, and proposes its explanations for them. The reason: "rationally explaining recent market moves will be essential to forecasting next year's market."

Why Australia's Economy Is A House Of Cards

"For over a quarter of a century our economy mostly grew because of dumb luck... As a whole, the Australian economy has grown through a property bubble inflating on top of a mining bubble, built on top of a commodities bubble, driven by a China bubble....Unfortunately for Australia, that “lucky” free ride is just about to end..."

"This Has Never Happened Before": Goldman Warns Low-Vol Regime Is In Jeopardy

This morning Goldman points out something that has never been observed before: the ratio of VVIX to VIX, or the vol of vol relative to implied volatility as per the VIX, just hit the highest level on record, while the VVIX itself spiked to the highest level since the August 2015 ETFlash crash.

What's Next For The VIX? RBC Explains

"From a ‘vol control’ fund deleveraging perspective, we still aren’t likely to have seen heavy de-risking flows from the masses yet (many targets at 8 or 10), as SPX realized vol—even of the short-term 20d varietal—remains painfully low at 6.5.  So, in order to ‘trigger’ it would either require another violent jump in vol, or a few more days further in this 15-16-17 vols level to ‘drag up’ the trailing number."