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Market Expectations Of A Stock Market Crash Have Never Been Higher
With VIX collapsing 10 days straight (for the first time since October 2010), one might be forgiven for thinking "everything is awesome." However, as always, the real news is in the nuance that the mainstream often misses. As VIX has plunged (complacency about 'normal' risk), Skew (which measures extreme tail risk) has exploded to its highest ever...
Skew measures the perceived tail risk of the market via the pricing of out-of-the-money options
Generally, a rise in skew indicates that 'crash protection' is in demand among institutional investors (institutional/professional investors are the biggest traders in SPX options).
An unusual move in the skew index (which historically oscillates approximately between a value of 100 and 150) is especially interesting when it diverges strongly from the VIX, which measures at the money and close to the money front month SPX option premiums.
Basically what a 'low VIX/high skew' combination is saying is: 'the market overall is complacent, but big investors perceive far more tail risk than usually' (it is exactly the other way around when the VIX is high and SKEW is low).
In other words, a surprising increase in realized volatility may not be too far away.
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ALL HAIL NOPAT
The "biggest investors" are those holding the sheeples money (savings/retirement)...they HAVE TO BE fully invested at all times...even if they KNEW the market was going to crash, they wouldn't call up thier customers and recommend selling...."There's never been a better time to own stocks; for the long haul!" is their motto.
WTMFBTF - Way To Mother Fucken Big To Fail - that appears to be Wells Fargo's "Downside Risk" hedge.
I know several people working as contractors for Fargo...place is awash with money...projects, projects projects...6 figure salaries galore...yet my sister has been waiting 3 MONTHS for the stupid fuckers to get her refinance completed! Never ending "need to fill this out" and "we can't find this, did you fill it out?"...what a circus.
GE has been playing their hand well by selling dogshit finance businesses to idiots. They're selling like Zell does. Patience, Monty. Climb the ladder.
the market is reacting to the proposed Biden/Deval Patrick ticket.
(and since states are implementing motor/voter for ILLEGALS, offering "free college" and helicopter money, they will win)
I don't know who "will win", but I know who I WON'T VOTE FOR...THE CLINTONS!
..and I'm in that Demographic that tips the scales...the non-D, non-R camp...and I am not alone in thinking The Clintons are scum; one word proof of that...BERNIE!
Who is Bernie, most have no fucken clue...But HE'S NOT THE CLINTONS...which is why he's doing so well AMONG DEMOCRATS!
As it stands now, 60% of DEMOCRATS don't want The Clintons in the White House...DEMOCRATS!
20% want Bernie and 20% want a guy that ISN'T EVEN RUNNING!
ANother 20% are abstaining! That's 60% "not really wanting" The Clintons back in the WH...this election is for the Republicans to Fuckup Badly and lose...
Bernie Sanders is about the only candidate that people who feel this way about Obama will vote for:
"No, the thing is he posed as a progressive and turned out to be counterfeit. We ended up with a Wall Street presidency, a drone presidency, a national security presidency. The torturers go free. The Wall Street executives go free. The war crimes in the Middle East, especially now in Gaza, the war criminals go free. And yet, you know, he acted as if he was both a progressive and as if he was concerned about the issues of serious injustice and inequality and it turned out that he’s just another neoliberal centrist with a smile and with a nice rhetorical flair. And that’s a very sad moment in the history of the nation because we are—we’re an empire in decline. Our culture is in increasing decay. Our school systems are in deep trouble. Our political system is dysfunctional. Our leaders are more and more bought off with legalized bribery and normalized corruption in Congress and too much of our civil life. You would think that we needed somebody—a Lincoln-like figure who could revive some democratic spirit and democratic possibility." - Cornel West
So no, it isn't because people don't know who he is.
Now the PPT is shaking their heads saying, "Great! another damn indicator/market we've got to manage!". "If Tyler and the rest of
the alternative media would keep their traps shut our jobs would be much easier!" "Our mushroom method of public relations is
being destroyed!"
1way:
Joe Bite-Me will team up with Fauxcahauntis, the Devaluator is outta' the picture.
-Ned
put this article on a loop for the next five years...........wait....a....minute....
GE are masters of cronyism and they knew when to bail, so I expect wonderful things to happen soon.....
Largest holder of WFC? Buffett? He knows he will be bailed out. ALL IN
The way i observe that chart, thier will be a huge rally. The skew chart was at lows at top of the tech bubble and housing bubble. Am I interpreting it incorrectly
We're skrewed.
Hey Zerohedge ! Why nothing on MH17 ?
haha you noticed that too... they went fuckin' radio silent because a) confirmed it was taken down by a Buk, which b) confirmed what any sane person already knew, mainly that the Russian analysis of a fighter taking them out was COMPLETE AND UTTER BULLSHIT, which leads to c) the Russians being a bunch of goddamned liars with no fucking credibility to lead an impartial investigation... but then, we knew that...
What? Who confirmed it? Where does it say this beside in a headline?
Not all of the representatives endorsed the conclusion that a 9N314M warhead was involved. In its comments on our reports, the Russian Federation states that it is not possible to determine the type of warhead or the type of missile that carried this with certainty."
In an appendix to its main report, the DSB said Russia indicated that MH17 was downed by a missile that could have been fired from either the ground or an aeroplane.
The Russian manufacturer of Buk missile systems, Almaz-Antey, said its own testing and calculations also threw doubt on the DSB's report, Russia's state-run TASS news agency reported.
Everybody living east of the Oder already knew that the Russians were guilty, those lying hubristic muzhiks making life suck for half of the European continent for the last 250 years ---- https://www.facebook.com/bbcnews/videos/10153150248897217/
http://kingworldnews.com/highest-ever-likelihood-of-a-black-swan-event-t...
What does Gartman think?
"We're gonna climb the wall of worry", I have to be bullish at this juncture
Gartman
Gartman is currently sticking his finger in a plumb, he needs a minute.....
It's ok, the gremlins in the market will have this green in no time. The problem is will the gremlins be there when we finally correct?
impliedcorr * skew * vix = what you should watch
I think stock prices have reached what looks like a permanently high plateau.
Is that you Irving?...you type well for being 200 years old
So risk is contained ?
Indeed it has. The FED is taking the cue from TEPCO and creating a wall of ice around the NYSE to forever excise the possibility that the stock market will melt down...
I'm so overcome with relief I cannot stop my feet from moving!
people's realization of manipulation of what was formerly know as a market has never been higher
There is no market just a bunch of central banks doing the bidding of a couple mega banks
I prefer to think of it as the skRew index!
Hard to believe given the constant program buying every time stocks approach the lows.
Sounds like a reason for new all time highs.
AND WE ARE GREEN BECAUSE THE FUNDERMENTALS ARE GREAT IN MURICA!!!!
FUNDERMENTALS!!!!!!!!!!!!!!
Contrarian sign..?
^^^
sounds like 1 more excuse not to raise rates (since if they do, they'll actually give pensioners, savers, bond investors something other than dividend paying stocks / REITs to extract yield out of) & they'll break the frankenstiein market they've created.
ALL VIX's are being absolutely crushed right now, w/ one of the bigger RUT market open ambush in months. Is it the last cries of tired party-goers ? ...
if Hilary is elected....market will rocket....if republican is elected....market will go to zero. Cronies need scape goats. Obama has been very accomodating...and will be rewarded like Comrade Clinton.
Expect the Fed's next move to be helicopter money.
Just outright Zimbabwe economic tactics.
Yogi - My opinion as well. Timed for election year when people a bit more optimistic. As the fuel gives some temporary strength to the economy I see 2016 as the last year to hedge and attempt to ensure you come out the other side with a couple pennies in your pocket.
The geopolitical risks are something so far out.of my control I just cant spend time worrying about it anymore and am hedged for three months of the three B's to help me and neighbors if the worst happens. Beyond that just Vida la Viva.
I expect to see things here that are true horrors, so prepping mentally and physically best I can. The good news is that I am surprised as I have gotten out there how many have some back up means now, at least those with half a mind anyways. It will be enough to rebuild but cant say I look forward to what looks to be inevtable. I hope I am wrong but as most you well know here, hope is not a strategy.
More ZH fear mongering.
Nothing is going to crash.
More sage advice from the kindergarten.
ZH isnt the only "fear mongering"
MSN from just today:
Global Weath Shrinks for First time since lehman
not saying there is a crash, however *since lehman* is a common meme on ZH
You must admit there have been an increasing amount of new records, new deviations as well as "since lehman, since 2000, since 2008" events.
Id like to think most ZHers dont look at one chart and say "there is the proof." Its the sum of aggregate data that helps steer a prediction.
Who the fuck is buying this shit market?
If I could create billions right now with a couple of keystrokes, I'd be buying everything hand over fist, too. In the end, even after a crash, I'd have gotten something for nothing.
The central banks through their member banks.
Federal Reserve can't buy stocks directly. Fed can print and lend money at 0%. Shell game.
Just like the Fed's off-balance sheet bonds.
More extreme Fed action ahead like helicopter drops of money. Seizing of accounts by the banksters.
i still contribute to my 401k and im holding my few, picked stocks. However I also keep cash in checking and started buying physical gold.
despite what makes sense to me: my peers, friends, colleagues, advisers and family - who are all intelligent people, mind you - are not worried. So I consider "half-in, half-out" to be my strategy for now. They all think im a dumbass for buying gold.
You ARE a dumbass for buying gold. Until everything goes to shit. Then you're a genius. There's just no way to know when everything goes to shit. At least for us peons...no doubt the market riggers will have more lead time than us to get out.
Muppets?
Its time to play the music, its time to light the lights...
I've been buying this shit market for 30 years. It's always been a shit market.
Blah, blah, blah, SSDD. I don't buy any of this garbage anymore. I got my arse handed to me on my QQQ puts these last 10 days. I'm done trying to play in this rigged game. It could crash tomorrow, and I wouldn't be surprised, or it could go on another tear for the next two years, and I wouldn't be surprised. The CB's could buy everything for sale on the planet with enough keystrokes. It's a waste of my time and life worrying about it. I'm already prepared for the worst case scenario. GL
unless i can get another year or two to prepare, im fucked. too much rent, not enough assets.
See you on the other side.
I'm with you brother
Yellen may cough up a lung during her speeches but her POMO desk still has firm control over the VIX.
She goes, "Print dollars, give to JPM for UST debt, rehypothicate gold to China, use proceeds to buy XIV." She loves her little job as world's evilest banker.
Hopefully one day she gets strung and quartered.
Get ready for the mother of all short-covering rallies.
When you are rich and diversified you don't give a shit. When you are dirt poor you have nothing to loose and don't give a shit. It's the idiots like me in the middle that worked hard for many years that have been killed by zero interest rates, manipulation of commodities, stock and bonds. I am now ready to bring out the pitch forks. The movement to throw out all the establishment politicians must continue and win the day.
Anyone that watches the crap debate tonight and listens to how they propose to give away all our remaining money to the free shit army needs their head examined.
LETS GET READY TO RUMBLEEEEEEEE!!!!!
https://www.youtube.com/watch?v=VOvDTCbcHe0
All the negativity does make one wonder if in fact it is time to buy and hold for a bit. I sure as shit won't. I don't have the stomach for it.
Physical war may have to come to us here in the US to make it stop.
Supply chains have to outright fail to make it stop.
Until someone knocks this system upside the head with a 2 x 4, it will go on. Narcissists and addicts run everything now.
I say this with some minor bitterness today. I just discovered someone I care about has run up a whole bunch of debt. If I help them out, they learn nothing. If don't, I am an uncaring shit. Self centered addicts do this crap. That is who is running this shit show. The ones who are not power hungry narcissists, don't want it. Those who do will run it right to the edge and tell themselves they will handle it later.
We are in the "handle it later" economy. Later can be too late.
Hey Ms, good to see you.
My Pappy would always say: "Ned, remember, no good deed goes unpunished."
- Ned
Pappy is wise. If a relative's problems get too big, it can spill into your own life too. I wil probably partially help...and expect nothing to change about the person.
I've also had to do this... three times now. In all three cases, its like: My relatives work for a living dammit, but they just can't keep up. It was some disaster befalling them for some contingency which they didn't account for. Everybody makes mistakes.
Just be thankful you have the ability to help and try to consider it to be an investment in their future.
What a surprise...
http://tripstrading.com/2015/10/10/sp500-suffering-from-low-energy/
http://tripstrading.com/2015/10/09/sp500-how-cycles-take-their-time/
Our summer flash crashes followed by drunkenly ridiculous explosions higher certainly bring the summer of 1929 into focus...
Everyone knows the system should be crashing*
Everyone knows the last thing the Fed will do is let the market crash*
The Fed has tantamount admitted it wont hike rates ever* and Qe4 is coming soon™*
So ?
What do you expect.
The Market has no fundamentals, it doesn't even matter if any of these corporations have employees or sales, the stocks have taken on a life of their own, they are trading cards now.
There is no reason why you cant trade a share of XYZ company even if its been out of business for years, it can become "collectible" like pogs or pokemon cards.
One day companies like Goldman Sachs will be long gone, but their stock certificates, bonds etc will hold "collectors value" as memorabilia for the great crash of 2020... it will probably become known as the End of the Corporate Era or something along those lines, the corporate fall or something.
I have stocks, I dont even know why I have them lol just spin the wheel of fortune look away and point.... 100 shares of XIN ALL IN, Spin again.
Where the Fed Para Drop Lands no one knows.
Market Expects a Stock Market CRASH!
I'll take the other side of that bet...
The US$ will be jawboned, cajoled, hit with a 2X4,
whatever it takes to push it down.
Voila!... no market crash possible.
Arrowrod's analysis:
Was shooting at the gun range today. If people leave their empty brass casings on the range, economy good. If they pick up their empties, economy bad.
Today, lots of "brass" laying around... Of course, being the cheap bastard that I am, er, actually, there was so much on the ground, I left it.
So, start buying assets, hand over fist (as Cramer would say).
Interesting vantage point. Here's Armed Resistance's analysis:
The real serious gun entusiasts all re-load both for maximum value and also to know they have a better end product (thoroughly controlled loads). When there's brass laying around, the serious afficianados are off leaving the range to the new or uninitiated prepper who senses the end of this economic cycle of fraud is near enough shake the rust off/familiarize himself with a new weapon.
So, start shorting the market because the end is near.
everyone knows the crash is coming?!?!!!?!? if they expect it, they will prevent it, you can bet your ass on that. If anyone thinks the FED won't print their asses off to avoid a crash they are fools.
Damn I was short but now I dont know what to do
Global war seems unavoidable. The "American civilization" has come apart at the seams. No real market, presstitutes keeping the masses in ignorant propaganda, giving arms to terrorists, destabilizing the planet, creating millions of refugees into Europe, bullying nuclear powers to get a war-causing response, Record numbers unemployed and the people are utterly tapped out. ETC.
You know the crazy guy on the street with an "END IS NEAR" sign? Next time you see him slip him a c-note. Better yet, a silver eagle.
Here are some signs of a coming recession.
http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row
http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high
http://michaelekelley.com/2015/09/27/vix-predicts-pits-while-pundits-have-fits/
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
I'll respond to this like did to a discussion on Greg Hunter, featuring John Williams this past Sunday. People are slaming Williams for being off on his hyperinflation predictions. Previous to Williams, Hunter featured Sinclair, Holter, and Weir (in that order) ..
My response:
If we recall Bix Weir, it is neither deflation or inflation. Simply the monetary system comes to a halt. China is only suffering because they are still pegged to the dollar. Another example is North Dakota. They have their own State Bank. When the FED ceases to function, ND will survive. In the same as will the PRC. Texas, once it has assets in its vaults, the same.Holter reminds that there will not be massive layoffs. Simply the fact that people will not go into work. The banks will be closed. There will simply be no money. That is until the reset completes and the derivatives are flushed out.
On the flip side. Take a look at this document:
http://eagleonetowanta.com/wp-content/uploads/2015/04/US_Treasury_FederalTax_Payouts.pdf
This is an actual copy of a memo from an attorney's office. Notice the date. Notice that the U.S. Treasury reports this. Add up the amounts. That amount at that time did reside in the U.S. Treasury. Not even being touched. Not being utilized. Not paid out. Taxes on those amounts not being utilized.
That entire amount (and a bit more) belongs to one person now. He has the money. He is only holding it for the American People. (his words) That was his mandate from President Reagan under Operation Stillpoint.
We first have to suffer collapse of the present monetary system. Only way to reset things and flush the toxic derivatives. All explained in this archive:
https://app.box.com/s/hfgvcqg7gqh7i27at6sv53ywu87lwarp (Read Me First)?
crowded trade -- so stocks up as dollar slides?