While we were 'trained' in the 70s and 80s on what 'our brain looks like on drugs', it appears we never learned what it looks like when hope is crushed... until today. With Netflix and Radioshack smashed down over 20%, the darlings of momentum, tech, and LBO rumor ping-pong appear to be facing up to a new reality - "this is your portfolio on hope". We can only assume that everyone's favorite newly-standalone investment manager is licking his lips at the 'opportunity'. As a gentle reminder, Radioshack's CDS implies a cumulative 85% probability of default in the next five years (and 27% within a year, and 14% by the holidays).
Radioshack -25%...
[6]
and Netflix -21%
[7]