Peak Complacency And Peak Leverage

Tyler Durden's picture

Despite all the chatter about negative sentiment, and its all priced in, we couldn't help but notice three little signals of concern with regard the real state of people's perceptions of risk. The implied volatility of the S&P 500 is at or near its lowest in the last two years; the difference between the implied volatility of the S&P 500 (forward-looking) and the realized volatility (backward-looking) is its lowest in almost nine months - and at or near the peak complacency levels of last summer; and lastly the size of debt balances in margin accounts at broker-dealers indicates that leverage is at or near its 2008 and 2011 peak levels. Seems like this will not end well, but then again - Ben's got your back and it's all priced in.




and Leverage:

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fireangelmaverick's picture
Peak Complacency And Peak Leverage versus Peak Printing. This is going to be Epic!
dereksatkinson's picture

COT report shows where the speculators are. 

fireangelmaverick's picture

I feel a Peter Jackson Trilogy coming.

Lord of the Printing : The Fellowship of the Bankers

Lord of the Printing: The Two Flations

Lord of the Printing: The Return of the Gold backed Currency.


Herd Redirection Committee's picture

Peak US Dollar World Reserve Currency

Regarding LOTR, what about a standalone sequel: "The Knobhead" (not sure who plays Geithner)

hedgehog9999's picture

No Peak Printing as of yet..... economy and markets need to hit the dumpster in this climate of increasing oil and food prices without QEIII , that will hold the manipulators hands for a while..............

otto skorzeny's picture

Dear God-I don't ask you for much-BUT WHEN SHOULD I BUY TVIX?

hedgehog9999's picture

Fucking Yesterday, TVIX hit a low...

Here is my parable from another thread on the blatant manipulation of the last few days:

They is a combination of Central banks and their banking agents. It is not really that hard, all you have to do is target an instrument or two where everything flows from, eg the VIX futures, the $USD futures and the SPX futures. Since you don't care about making or losing money, just putting a constant bid or sell of small size (to minimize cost) on the market you are supporting, you just do it overwhelming every sale or buy that comes your way.....of course , this only works when the selling or buying pressure no matter how strong is relatively contained.

Picture a strong dike on a dam where there is a few holes and superman is working overtime plugging any leaks that come along, now imagine these leaks keep increasing in frequency and strength, superman now needs a helper which he does not have, now picture if you will black kryptonite which is oil increasing in price like crazy and food prices going through the roof threatening chaos in a few countries, the kriptonyte will weaken Superman and eventually the dike will collapase giving way to a major flood forcing everyone to bail out thus increasing the flow of water.

The flow is so strong that at some point (with a weakened  Superman's help) the flow goes backwards , much like a Tsunami clearing the beach prior to the next bigger wave which comes roaring right after, at this point Superman's efforts are pointless as he's too weak to do anything at that point.

There you have it in layman's terms.......

By the time it is all said and done the SPX should be limping around 1100 if we are lucky..... 


The Big Ching-aso's picture



I feel like Barney has my back.

Dr. Engali's picture

Yeah you better watch that.Word has it he has heavy investments in Pfizer.

mirac's picture

does Phizer own KY JELLY?

Dr. Engali's picture

Viagra. It wouldn't urprise me if he was heavily invested in J&J too.

Tijuana Donkey Show's picture

Frank? You better not, he's a married man.

magpie's picture

Doesn't the saying go if you ask for the can't afford it ?

indianajohns04's picture

The decay on TVIX is too great and the market is too irrational for it to be a good play ever. (Anyway UVXY actually tracks what it's supposed to as opposed to TVIX and it's ginormous premium over NAV.)

Al Huxley's picture

I think maybe you're looking at it the wrong way - probably looking at the price range and saying 'well it was over 100 last August's crash and it's 3.46 now, so if the market tanks again it will go back to 100'.  The appropriate way to look at is it to say 'I can't fucking believe that they've cooked up an instrument so blatantly fraudulent that it could go from over 100 to less than 4 and to have declined almost 50% since March, even though the underlying index it purports to track has actually risen in that period.  What an outstanding example of blatant fraud on the part of the FIs that cook this shit up, midway carnies, street thieves and crack dealers have a stronger moral and ethical code than these fuckers'.

I should be working's picture

Betting on volitility is a fool's game. I have seen so many people recommend it since March or was it February?

Colonial Intent's picture

To use a name that was a nazi war criminal wanted for murdering  american prisoners in ww2 is really sick dude.

Piranha's picture

Now let us have peak volatility

mrktwtch2's picture

never touch tvix..its only good for a one day pop or 2 at most the daily decay kills it..its is good to short though..

timbo_em's picture

I just bought me some of that volatility this morning. Let's see what this summer has to offer.

rsnoble's picture

In the money from a few moments ago on calls taking advantage of the Fed's big green fuck stick. Not sure if we'll get the float up all afternoon or not we'll see. It wouldn't be surprising. Low volume=easy manipulation.

geewhiz190's picture

corporate preferreds and munis are being called at record amounts.  new issue borderline junk debt is being engorged by the public at a rate i've never seen in over 30 years at the trade to replace what was called.  the mad dash into paper of dubious quality with maturites in the next century with yields at all time all time record lows...when this thing breaks it's going to be a real mess.  it's nuts

Xibalba's picture

why the hell is Tracebook green?? 

Alex Kintner's picture

Trees will always grow higher.  America will always win their wars. Microsoft will always make a profit. Always...

pleseus's picture

Time to buy volatility. Summer rally in equities is over. Reality now sets in. Coming Food price spike will limit the amount of QE the world does. Markets will not like no QE in the near term.

Village Smithy's picture

While leverage may be at peak levels, how much more is available and how much Euro money will flow in. If this market doesn't do anything to scare people soon then we may have a ways to go up yet. Compared to Europe today isn't scaring anyone, so far anyways.

Temporalist's picture

Re Batman movie shootings:




...too soon?

Squid Vicious's picture

sad news, but the bright side is that it most likely didn't cull the best and brightest - midnight showing of garbage du jour....

otto skorzeny's picture

ironic-people that pay to watch mindless violence are themselves the victims of mindless violence

Yen Cross's picture

 How can you have complacency without participation? Thats rather Oxymoronic!  Can someone please redirect that ( CNBS),Mandy  to the " RED LIGHT" district!

Meesohaawnee's picture

Peak Manipulaton

Peak Algos.

Peak Fraud.

yogibear's picture

Nothing like a lot of fear to cange that. Time for Goldman to do their dirty work and rake in the money before the year's end.

no life's picture

Zero-sum game, pal..

ebworthen's picture

Calm before the storm.

ThunderingTurd's picture

Peak fixed income prob desk employment

Hype Alert's picture

What's to worry about?  If things are bad, Ben will print.  If things are good, Ben will print.  Inflation or he'll be replaced.  Now, why is that?

Peak Printing.

Grand Supercycle's picture

As mentioned numerous times, market intervention has only postponed the inevitable.

Despite short and medium term market vacillation - the following remains a constant :

>> USDX monthly indicators [ie big picture] continue to warn of significant long term USD upside. (thus EURUSD & AUDUSD etc bearish)

>> SPX monthly indicators [ie big picture] continue to warn of significant long term downside for equities which will be worse than 2008.