"Rising markets, an unwillingness to acknowledge fat tails (unlikely knowns), and the inability to model Black Swans (unknown unknowns) have concentrated popular wealth into a narrowly distributed range of highly vulnerable assets and investment strategies."
"... prices often remain over or underpriced for far longer than seems likely, logical. Which is why so many intelligent people get destroyed in such trends. You see, sometimes higher prices in and of themselves drive prices to utterly illogical highs. And vice versa."
"Trump is a boost to volatility traders because of his inherent unpredictability... stop underestimating this man... All bets are off, and that is very good for volatility… but potentially very turbulent for the world."
Open societies are in crisis, and various forms of closed societies – from fascist dictatorships to mafia states – are on the rise. Because elected leaders failed to meet voters’ legitimate expectations and aspirations, electorates have become disenchanted with the prevailing versions of democracy and capitalism. Open society needs defending...
"Asset prices moved within a fairly narrow range for much of the intermeeting period, although volatility increased somewhat in the last few days of the period as market participants focused on central bank communications in the United States and abroad."
With three dissenters and no good reason (based on their own data) to stay on hold in September, The Fed chickened out, but jawboned the hawkish tilt afterwards. With Nov odds at 19% and Dec at 66%, the USD and Treasury yields were falling dovishly into the Minutes, this is what the Fed said “Several participants expressed concern that continuing to delay an increase in the target range implied a further divergence from policy benchmarks based on the committee’s past behavior or risked eroding its credibility” especially because recent data supported the committee’s outlook, the minutes stated.
1. In a world of manic factor crowding via the exponential growth of cheap passive index and smart beta products, get ready for the class-action lawsuits in a future-state. And: 2. this is BEYOND GOLD as an example of “tail wagging dog” / “echo chamber” / “feedback loop amplification” from the market structure shift experienced within the industry over the past 10+ years.
According to Jeffrey Miller, "all the conditions for a market crash are in place" but when it happens is anyone's guess and ultimately depends on "how dumb things will get before" central banks finally stop.
"When nervous investors buy VIX ETFs they actually push down the VIX, and confident investors who are short VIX ETFs encourage it to spike. Given that VIX measures often are used to guide the risk that algorithms can take, this seems very contradictory to me. I would use extreme caution when using the VIX as part of any investment process."
When one looks at the actual dynamics within the bookies, an odd divergence emerges: "Although Ladbrokes has received a higher volume of bets to leave the EU, those making a punt on remain were placing higher financially larger" - the average stake on a bet to remain was £450, compared to £75 on a bet to leave."
England’s upcoming vote on June 23rd may be the first of several votes that reveal the deep flaws embedded in the European Union. In particular, Europe’s undercapitalized and overleveraged banks are dangerously exposed to rising political unrest.