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Spot The Very Odd One Out: "How Much Longer Can This Divergence Continue?"
A chart we first showed several months ago is once again making the rounds, this time courtesy of Newedge's Brad Wishak who looks at recent trends in asset volatilities, and asks a simple question: "how much longer can this divergence continue?" when observing the unprecedented discrepancy between volatility in the favorite asset class of central banks everywhere, namely equities, and every other asset class.
As a reminder, this is a divergence which even Janet "equity valuations are quite high" Yellen has finally noticed, if hasn't quite told the NY Fed to stop selling VXX at every possible opportunity.
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"It's like a crap sandwhich, no matter where you bite in, it still tastes like shit" - Abraham Lincoln.
Good ol' Honest Abe. You can always count on him for a good sound bite. :-)
"No more CLINTONS, No more BUSHs" - Abe Lincoln
How dare you criticize both the White Rose of York and the Red Rose of Lancaster; choose your side!
"No more CLINTONS, No more BUSHs" - John W Booth
I am thinking this will last another 2-3 years. The FED does a excellent job stretching things out beyond what any sane human thinks.
Like Wiley E. Coyote over the edge and spinning on air.
"Playoffs? Don't talk about playoffs! You kiddin' me? Playoffs!! I just hope we can win a game!" - Abe Lincoln
@order66
Lincoln.....................did not eat sweetcorn????
"the more bread you have, the less you taste the shit" Abe
Forever?
UNTIL NOW!
FOR EVER
DON'T FIGHT THE FED
Until it doesn't?
When the USA National debt was 6T who would have thought it x 3..........next up x 4,5,6,7,8,9,10
On a Michael Reagan show - circa 1995 if memory serves, he was lamenting a near imminent crisis if the nation didn't get it's debt problem under control. The number back then was ~approaching~ $5T...
This can go on as long as Treasuries are bid (in the 'BLICS' even), or when a certain handful of other nations decide their own ¥sandbox is complete and ready to play in.
To the Editor:
It occurred to me, reading Joseph Sawyer's letter on the national debt ceiling (Sept. 14), that I didn't know what $1 trillion is, let alone $2 trillion. Of course, I knew that a trillion is a thousand billion and that a billion is a thousand million. But I didn't really understand what that means. Knowing there are 12 zeros in a trillion didn't help much either.
Why not think of it in terms of seconds, I asked myself? A trillion seconds would have to be years, probably many years ago. I made a wild guess. As it turned out, I wasn't close. I found that 1,000 seconds ago was equal to almost 17 minutes. It would take almost 12 days for a million seconds to elapse and 31.7 years for a billion seconds. Therefore, a trillion seconds would amount to no less than 31,709.8 years.
http://www.nytimes.com/1986/09/28/opinion/l-just-how-long-is-a-trillion-seconds-229186.html
FX, Rates, and Oil are the things constantly jiggered to keep equities floating.
You know, algos rotating in and out of sectors and spoofing humans in the blink of an eye?
It's like the guy with the spinning plates on sticks who can slow down time; he can go have a leisurely lunch before a plate drops or the audience knows he's even left the stage.
Brilliant post, I wish I could give you more then one up vote.
Could be the Fed has hired some gun slinger, super-algo, brainiacs who know exactly which column to address every hour, for every occasion.
Price stability which asset class is most likely to keep the urban lib-tard, cushy job, voting demographic in their cocoon of media induced complacency? ummm, wait, still thinking
"Price stability which asset class is most likely to keep the urban lib-tard, cushy job, voting demographic in their cocoon of media induced complacency? ummm, wait, still thinking"
Try not to cause yourself any further brain damage..............oops, too late.
Until there are no more shorts left. The beatings will continue until morale improves. Suddenly that makes sense, no?
Just another Bankster day in the land of the free, home of the slave.
land of the fleeced
home of the slave
Land of the fees, home of the slaves.
Land that we flee; home of the slave.
Forever, until they turn the price management computers off.
watch out for high-yield: HYG back under key level of 90.00 today (closed there yesterday) ... would love for them to raise rates & crack this market. QE4 could be here by lunch-time if this shit keeps up
What are the units on the vertical axis? I don't understand how each plot is normalized to the others.
Volatility across asset classes - not sure what the units are. Notice that volatility in FX, Rates, and Oil spiked as volatility in equities was greatly subdued right as QE3 ended. To keep stocks up, sectors had to be "Memorex'ed".
But I don't get how we are supposed to compare amplitudes without normalized indecies.
I would guess that the amplitudes are already normalized since it is cross asset volatility, or WYSIWYG.
Lies and dishonesty and warmongering everywhere.
It fucking pays.
I think I am going to join the club with a new free trade movement and start hauling gasoline and cigarettes across borders past the gestapo and sell it to citizens who need a break and all I need to do is make sure I have some sharp connected lawyers working for me as I sit by the ocean drinking a beer and relaxing.
Yes, white collar crime (tax avoidence while providing prohibited goods) is the only way to go!
Find bank repo home. File new assignment of mortgage from foreclosing bank to new LLC, one that sounds like a bank, say...Wells Trust Real Estate NYC, cut off the realtor lock box, change locks, move a tenent in and collect the rents! Anyone can get corporate seals made to use on the assignment of mortgage.
Use a VPN service, get two "burner" phones and link them to NYC zip codes, put recording message on phones, "you have reached Wells Real Estate, Mr. Cohen, please leave your name and number".
Please forward this to any other "bankers" who want to take over vacant homes illegally foreclosed on.
There are ten people and resources to feed only nine. What happens to the tenth and why? O’ Humanity, Why are you running and for what?
For full context, please visit my blog http://just-a-thought-from-thinair.blogspot.com/
Read the post titled “No one saw it coming”
Such Divergence is The Plan B. They can be persistent as they have been in third world economies.
Thanks zerohedge for all the good work you do!
until they take the money printers away
They have free money. They can hold the volatility of the market down until the currency dies.
In fact really what they are doing is converting equity volatility into currency volatility.
The credit will dry up as everyone tries to double down again and again and again till they cant get anymore credit for the lies on the books. How much additional credit can a shrinking asset gain, even with fraud.
It's the old saw.... "the market can stay irrational longer than you can stay solvent..."
LOL so equities are way undervalued. BTFD sheep
Or this hints that PMs are overvalued so sell sell sell you suckers.
this chart show Volatility not price. this does not try to show equity prices are undervalued...just that equity prices are oddly stable/high vs unstable oil/rates/FX
I've already read the quarterly reviews, amongst other links. Don't want to cherry pick my bias story... let you read the article's that suit your personal interests.
https://www.bis.org/
Enjoy.
There is another divergence of equal importance that few have talked about... the divergence between the Dow Jones Industrials and the Transports. A Dow Theory non-confirmation is ticks away from triggering a call of market collapse...
http://www.globaldeflationnews.com/dow-jones-industrial-averageelliott-w...
IBB wound SO tight!! i dont believe any dips unless this bitch follows RUT. ibb then rut then spx then 'flight to safety'--wherever that might be, eye of the beholder and all.
+/-2% on IBB tells the tale?
Don't forget the interest rate/stocks divergence: http://pebblewriter.com/unintended-consequences/
years, probably.
"Fuck this shit" ~Honest Abe