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Guest Post: Complacency Everywhere You Look

Tyler Durden's picture




 

Submitted by Michael Panzner of Panzner Insights

Complacency Everywhere You Look

When trying to get a handle on investor sentiment, the benchmark of choice for many market-watchers is the CBOE S&P 500 Volatility Index, or VIX. However, this popular “fear gauge” only offers a snapshot of implied volatility, or relative pricing levels, for equity index options, which might not necessarily tell us all we need to know about the mood on The Street.

In theory, stock traders could be overreacting to equity-specific developments that are not relevant to other markets.

That said, there is data that suggests the high levels of complacency in the stock market are also being seen elsewhere. As the chart shows, gauges of implied volatility levels for equity, bond, currency, gold, and oil markets are at or near multi-month lows, indicating that “the crowd” is unanimous in its belief that nothing untoward is going to happen in the immediate future.

Should we be worried?

 

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Sat, 12/08/2012 - 12:34 | 3045479 Pool Shark
Pool Shark's picture

 

 

I almost finished reading this article until I suffered an acute attack of apathy.

I'm not worried...

 s/ Alfred E. Newman

 

Sat, 12/08/2012 - 13:16 | 3045559 Silver Bug
Silver Bug's picture

The lemmings are happily going over the cliff.

 

http://schiffblog.blogspot.ca/

Sat, 12/08/2012 - 16:26 | 3045846 Pool Shark
Pool Shark's picture

 

 

I may be going to hell in a bucket,

but at least I'm enjoyin' the ride.

s/ Jerry Garcia

Sat, 12/08/2012 - 12:32 | 3045483 impermanence
impermanence's picture

Look, if people buy in the notion that you are automatically born a citizen, i.e., a lifetime finanical supporter, of a particular nation-state, then they will buy into anything.

Sat, 12/08/2012 - 13:04 | 3045537 CH1
CH1's picture

Not entirely.

Lots of them were told these things thousands of times in the Youth Indoctrination Camps, and require time to get over them.

Sat, 12/08/2012 - 13:35 | 3045580 knukles
knukles's picture

One of my buds wants to adopt a Chinese baby and name it Ezekiel in remembrance of Jules' missives about the God of Justice.

I told him I thought that would be a cruel trick naming the kid Ezekiel, but he said maybe the kid would buy into it later in life.

 

Sat, 12/08/2012 - 20:08 | 3046153 SilverDOG
SilverDOG's picture

impermanence,

Funny how the Black Law book is never taught.

Sat, 12/08/2012 - 12:44 | 3045497 Raphio
Raphio's picture

The manipulation of the VIX, to help keep stocks levitating into Friday's close, was yet another one for the record books... Pushin that sucker down. As soon as a positive print for the headlines was achieved at 4 pm; VIX sprang back up. This index (of course) seems to be yet another lever in the manipulators' tool box.

Sat, 12/08/2012 - 17:11 | 3045904 LongSoupLine
LongSoupLine's picture

Lol...that's funny.

Next thing you'll tell me is LIBOR is manipula...whoa, what?

Sat, 12/08/2012 - 12:39 | 3045498 Mae Kadoodie
Mae Kadoodie's picture

There were many on the east coast who were complacent even with days of warning for Superstorm Sandy.  The psychology was that the year before they had heard the same calls for Hurricane Irene and it was a non event for the coastal areas.  The point is, even with information suggesting to be risk averse people will behave in a contrary fashion.  People need to be beaten up before they will adapt.

Sat, 12/08/2012 - 16:59 | 3045888 Divine Wind
Divine Wind's picture

 

 

Excellent analogy.

The piece reminded me of anti-gun liberals.

That mindset changes when they get their asses beat to the curb in the KnockOut Game or have their house is burgled.

Then the veil on reality is pulled back, their eyes are opened and the transformation begins.

Sometimes the learning process, even in the world of investment and finance, hurts.

Sat, 12/08/2012 - 12:42 | 3045505 Rainman
Rainman's picture

Institutionals are stuck in a web constructed by the central banks and have no place to run. Chairsatan and colleagues won't allow true price discovery or discounting. So what's to worry about ( for now )...?? An expired free marketplace doesn't move around much.

Sat, 12/08/2012 - 15:26 | 3045762 W74
W74's picture

Let Bernanke's people pray to their Molochs and their Chiuns.  They had better hope they have somewhere to run to once we learn to riot like Europeans.  Something tells me that in the same vein as kids who don't learn how to drink properly that once we learn to riot we're going to go on a binge and make the Greeks look tame.

Sat, 12/08/2012 - 18:01 | 3045960 bunnyswanson
bunnyswanson's picture

This is a transfer of wealth from middle class in developed nations to 3rd world nations.  There is no one who will be spared. 

 

http://www.youtube.com/watch?v=mOwZwkhFemQ

A banker explains.  There is something to worry about alright. 

Sat, 12/08/2012 - 12:50 | 3045517 Monedas
Monedas's picture

Resignation that we're adrift in an unstoppable socialist current .... continue prepping !

Sat, 12/08/2012 - 13:03 | 3045536 AU5K
AU5K's picture

Simply due to the fact that everything is back-stopped now.

Sat, 12/08/2012 - 13:05 | 3045541 A Lunatic
A Lunatic's picture

It's all good..............

Sat, 12/08/2012 - 13:05 | 3045542 Cookie
Cookie's picture

OT

Can kicking wherever you look

Delegates at UN climate talks in Qatar agree to extend the Kyoto Protocol on fighting global warming until 2020, avoiding a major new setback.

http://www.bbc.co.uk/news/science-environment-20653018

Sat, 12/08/2012 - 14:26 | 3045654 Non Passaran
Non Passaran's picture

It's a setback that they extended that lunacy

Sat, 12/08/2012 - 13:16 | 3045560 Peter Pan
Peter Pan's picture

The system has become so compex and opaque that ignorance leads to apathy until disaster hits.

This is the reason that gold and silver will achieve dominance as the ultimate financial insurance. At the moment people are fixated on the price of gold but largely ignore the contrived valuation of bank and FED assets.

People need to ssk themselves, IF ONLY CENTRAL BANKS ARE WILLING AND ABLE TO BUY BONDS ETC, HOW VALUABLE CAN THIS STUFF BE IN THE FIRST PLACE?

Sat, 12/08/2012 - 15:23 | 3045756 W74
W74's picture

My Grandparents used to buy bonds which upon maturity turned out to be really good investents.  They had to actually hold the darn note too, and at maturity could cash them in for face value (having bought them for much less) or give them to their grandkids (like me) to do so.  Nowadays I won't touch bonds, not even in a fund, nor will I touch CDs or anything beyond a couple grand in a savings account.  It's simply not worth the return (assuming anything at all) when inflation gets subtracted.

Sat, 12/08/2012 - 13:43 | 3045570 Yen Cross
Yen Cross's picture

That chart looks like the "

pro·ver·bi·al 

" rug is about to be pulled out from under [ the markets] very soon...

Sat, 12/08/2012 - 13:23 | 3045574 hairball48
hairball48's picture

Bet your ass you should be worried. I've watched the destruction of real wealth for the last 40 years. I see the "future" very clearly every week when I go to the local county dump. We borrowed to consume...and did a hell of a job of it.

Payback is a bitch though isn't it?

Sat, 12/08/2012 - 13:47 | 3045593 Democratic koolaid
Democratic koolaid's picture

lay of the negativity koolaid!

"Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence."

 

"destruction of real wealth for the last 40 years." What might that be? Education, credit, Dollar value, or culture? 

Sat, 12/08/2012 - 17:21 | 3045916 bunnyswanson
bunnyswanson's picture

There are many methods used to conquer a nation.

http://www.youtube.com/watch?v=oCKWDarNdGw  - The truth about Israel by a Jewish man. 

Introduction of excessive credit designed to entrap, distraction via entertainment (debauchery), fear (terrorism), military  attack, propaganda, infiltration of key industries. Or all of the above.

We are all Palestinians now.

 

 

Sat, 12/08/2012 - 13:49 | 3045596 resurger
resurger's picture

+1

The chickens ar..............

Sat, 12/08/2012 - 13:44 | 3045589 EARLPEARL
EARLPEARL's picture

wheres the bubble?  i see no fricking bubble...buy more bonds

Sat, 12/08/2012 - 13:48 | 3045595 DowTheorist
DowTheorist's picture

There are three reasons to be worried:

 

1) On Nov 16 a primary bear market signal was flashed by the Dow Theory. The odds favor declining prices in the weeks and months ahead.

http://www.dowtheoryinvestment.com/2012/11/dow-theory-special-issue-afte...

2) The Gold/Dow ratio turned bullish in favor of gold by early November. Not a good omen for stocks long term.

http://www.dowtheoryinvestment.com/2012/11/dow-theory-update-for-nov-8-s...

3) While the long-term bond /gold ratio is still bullish in favor of bonds, it is in a delicate technical juncture. It the ratio turns bearish (which means gold stronger) this would be a bad omen for both bonds and stocks.

http://www.dowtheoryinvestment.com/2012/10/dow-theory-spells-trouble-for...

Sat, 12/08/2012 - 15:16 | 3045743 W74
W74's picture

I went to your site once before, you present some interesting analysis.  I wish I had some more insight to the bond market.  Something tells me that bubble is going to pop and in seeking "safe" returns few people even realize that it's a bubble.

Sat, 12/08/2012 - 13:53 | 3045597 Democratic koolaid
Democratic koolaid's picture

 

1.whose to say that this isnt a good time to buy

2.this might be a part of a normal cycle?

3.The world is going to end in 13 days?  

Sat, 12/08/2012 - 14:24 | 3045647 Dead Canary
Dead Canary's picture

I was planing on giving a shit but I.........

Uh, was I finished.   (Hey, what's on TV tonight?)

Sat, 12/08/2012 - 14:25 | 3045650 Monedas
Monedas's picture

If some sub-human nurse from the sub-continent of India can't make it in the British public health cesspool .... she should have gone back to the filth of India .... she has no right to infringe on our right to make practical jokes and pranks !  Her family and co-workers should have noticed that this Humpty Dumpty nurse was fragile and brittle !  Put those Aussie DJs back on the air .... Monedas demands it !

Sun, 12/09/2012 - 12:15 | 3046864 Democratic koolaid
Democratic koolaid's picture

The whole spectacle thats been sensationalized is good publicity. 

" catch and run" -unknown. koolaid sub-line 3.007

Sat, 12/08/2012 - 14:48 | 3045697 saycheeeese
saycheeeese's picture

worry = print

worry more = print more

panic = .. panic?

Sat, 12/08/2012 - 14:55 | 3045708 q99x2
q99x2's picture

It's the game no one wants to play; The party that nobody came to; The battle that never happened. Porno graphs of the elite playing with themselves. Graphs of the demise of capitalism, freedom and liberty. It's the F'n foundation of revolution.

Oh say can you see by the dawns early light. What so proudly...

The Santa Monica Christmas 10K Race was fun. If it wasn't for that little F'n  11 year old, half my size that pased me up right at the finish line it would have been a great race. They shouldn't allow kids to run 10Ks.

At the twilight's last gleaming...

Sun, 12/09/2012 - 00:50 | 3046470 CunnyFunt
CunnyFunt's picture

No worries, mate. I used to compete in the 3000M steeplechase and was pipped at the line by some little shit. I concluded that it was my own fault for not following through. The kick is nothing more than a state of mind.

Sat, 12/08/2012 - 15:03 | 3045720 realtick
realtick's picture

Corporate Profits And The Crushed Manufacturing Sector http://chartistfriendfrompittsburgh.blogspot.com/2012/12/corporate-profi...

Sat, 12/08/2012 - 15:21 | 3045752 StoleYourMoney
StoleYourMoney's picture

Panic selling, it's almost time.

Sat, 12/08/2012 - 15:35 | 3045780 AynRandFan
AynRandFan's picture

So long as investments are priced in U.S. dollars, the Fed can inflate everything away.  Finite debt is no match for infinite money.  We are years away from a crisis in confidence in U.S. currency.  Problem is, imports are going to cost more and more and more.

Sat, 12/08/2012 - 17:10 | 3045902 Tombstone
Tombstone's picture

With nearly everyone expecting Benny to save them, including the government, what is there to worry about?

Sat, 12/08/2012 - 18:01 | 3045958 mjorden
mjorden's picture

yes

Sun, 12/09/2012 - 15:34 | 3047192 Arcturus
Arcturus's picture

Looking at that chart and the highlighted bottoms it looks to me like we are going to see a spike to the upside.

Funnymentals may prove this chart to be wrong however.

 

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