26 июня, 10:43

Low Volatility Increasing Market Tension for the S&P 500 in Week 3 of June 2017

For a market where the S&P 500 isn't changing very much, there's a remarkable about of tension building up in it. Or more accurately, there is tension building in the halls of the big investment banks where big bets are being made, such as JPMorgan, whose top quantitative analyst is seeing great cause for concern that hasn't translated into market volatility (via ZeroHedge): After getting virtually every market inflection point in 2015, and early 2016, so far 2017 has not been Marko Kolanovic's year, whose increasingly more bearish forecasts have so far been foiled repeatedly by the market, and the same systematic traders that he periodically warns about. As a reminder, his most recent warning came last week, when he cautioned that even a modest rebound in VIX could lead to dramatic losses for vol sellers. As a reminder, here is the punchline from his latest note:Days like May 17th and similar events "bring substantial risk for short volatility strategies. Given the low starting point of the VIX, these strategies are at risk of catastrophic losses. For some strategies, this would happen if the VIX increases from ~10 to only ~20 (not far from the historical average level for VIX). While historically such an increase never happened, we think that this time may be different and sudden increases of that magnitude are possible. One scenario would be of e.g. VIX increasing from ~10 to ~15, followed by a collapse in liquidity given the market’s knowledge that certain structures need to cover short positions. So in light of a market that refuses to post even the smallest of drawdowns (we are not sure if the words "selling", "correction" or "crash" have been made illegal yet), has Kolanovic thrown in the towel and declared smooth seas ahead? To the contrary: in a note released late last night, he echoes warnings made recently by both Citi and BofA, and predicts that receding monetary accommodation from ECB and BOJ will likely lead to "market turmoil, and a rise in volatility and tail risks" and just in case there is some confusion, he reiterates what he said last week, namely that the "key risk of option selling programs is market crash risk." What Kolanovic is describing is a realistic mechanism by which stock prices might suddenly change dramatically for the worse. But is there anything to it? That's where we have an angle on the story. Going by our dividend futures-based model, we would see that kind of potential plunge in stock prices as a sudden shift in investor focus from 2017-Q4, where our model suggests that investors are largely holding their attention at this time, to instead focus on 2017-Q3, where if such an event happened, it would likely coincide with a 300-350 point decline in the value of the S&P 500. Now, here's the catch. For that to happen, something would have to fundamentally change in the expectations that investors have about the future to compel them to focus on 2017-Q3 instead of 2017-Q4. One entity with the power to do just that is the Federal Reserve, which can in effect "command" investors to focus on 2017-Q3 through the statements its officials make about their plans for the timing of the Fed's next change in the Federal Funds Rate, which would affect all short term interest rates in the U.S. At present, our model suggests that investors only see a 16% probability of them taking that kind of action in or by its September 2017 Federal Open Market Committee meeting, but some Fed officials have been pushing in that direction, which explains why investors are not 100% focused on 2017-Q4 as the most likely timing for the Fed's next interest rate adjustment. Another factor that can shift the attention of investors is the changing expectations for future earnings in the companies that make up the S&P 500. For example, should oil prices fall even further than they have in the last several weeks, that could reignite the concern that the oil and gas sector of the U.S. economy is in for a new round of economic distress, which could lead investors to focus on these companies in the near term, pulling the index down along the way. Or, oil prices could rise sharply, which would both boost the oil and gas sector of the U.S. economy while straining other sectors, which would also have the same effect. Or, they could rise just enough, contributing to the kind of inflation that would potentially prompt the Fed to pull the trigger on its next rate hike sooner than investors are expecting today. In all this, the random onset of new information is the potential trigger for unleashing a significant change in the S&P 500, where the interactive dynamics are both very complex and periodically chaotic. And that's just considering how changes in how far forward in time investors are focusing their attention might affect stock prices. If the expectations for future dividends themselves change, that would very directly affect stock prices, which adds a whole other level of complexity in how stock prices behave. Speaking of which, if you want to know which scenario might apply before Kolanovic's mechanism becomes engaged, you might want to keep up on the information coming into the market.... Monday, 19 June 2017 Fed's Dudley confident U.S. inflation should rebound with wages Stocks buoyed by tech rebound; Dudley remarks lift Treasury yields Oil falls to seven-month low on more signs of growing crude glut Wall St. hits record highs on strong technology, health stocks As inflation misses goal, Fed's Evans calls for gradual rate hikes Fed's Evans says worth waiting until year-end to assess next rate hike Tuesday, 20 June 2017 Fed policymakers in tug-of-war on inflation, instability New York Fed’s Dudley Doesn’t Moderate FOMC’s Hawkish Stance Fed's Rosengren: Low interest rates pose financial stability risks Fed's Evans says he's nervous about inflation weakness Fed's Kaplan says low bond yields warrant care on rate hikes Fed's Kaplan says has 'open mind' on more rate hikes this year Wall St. falls on oil tumble, consumer sector and Fed worries Wednesday, 21 June 2017 Fed's Harker says could begin trimming balance sheet in September Oil drops to 10-month low; biggest first-half slide in 20 years S&P, Dow hurt by energy, banks; biotech boosts Nasdaq Thursday, 22 June 2017 Oil bounces off 10-month lows; crude glut still weighs Healthcare stocks jump after Republicans unveil plan; banks, staples slip Friday, 23 June 2017 U.S. new home sales jump, median price surges to record high Fed's Mester unmoved by weak U.S. inflation Rate hikes needed given U.S. economy 'pretty good': Mester Hold off on further rate hikes until inflation moves: Fed's Bullard Oil creeps up from 10-month low, down nearly 4 percent on week Wall Street ends higher on technology, energy boost Elsewhere, Barry Ritholtz summarized the positives and negatives for the economy for Week 3 of June 2017.

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26 июня, 09:00

Coast To Coast AM - June 23, 2017 Nazca, Peru Gaia Mummy & Secret ET's with David Wilcock

 Coast To Coast AM - June 23, 2017 Nazca, Peru Mummy & Secret ET's with David WilcockJay Weidner of Gaia.com appeared in the first half-hour of the program to report on the discovery of a strange mummy in Nazca, PeruAuthor, lecturer and researcher of ancient civilizations, David Wilcock, is... [[ This is a content summary only. Visit http://FinanceArmageddon.blogspot.com or http://lindseywilliams101.blogspot.com for full links, other content, and more! ]]

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26 июня, 08:55

BIS Warns on Household Debt

Credit booms tend to go hand in hand with a misallocation of resources – most notably towards the construction sector – and a slowdown in productivity growth, with long-lasting adverse effects on the real economy.

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26 июня, 08:30

MIKE MALONEY The Next Economic Crash Is Going To Be Horrific on August 21, 2017

MIKE MALONEY | The Next Economic Crisis Will Be Devastating on August 21, 2017 perfectly presentation of both of you. Gold, silver etc are insanely been criminally manipulated down, heartlessly shortening deep down and at the same time with the proceeds pumping up specific stocks! The evil... [[ This is a content summary only. Visit http://FinanceArmageddon.blogspot.com or http://lindseywilliams101.blogspot.com for full links, other content, and more! ]]

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26 июня, 08:24

Nick Turse: The Special Ops Fallacy – Throwing Elite Resources at “Winless Wars”

The US is enamored with special ops as a magic bullet in America's many "interventions". There's a big gap between enthusiasm and results.

26 июня, 08:00

RED ALERT: The Dollar Will Collapse 100% on AUGUST 2017! Ron Paul Last Warning To America

 Dr. Ron Paul is a rare, real-thinking true Human Being, a total shame for the most slipery, selfish, money-lobbied, politicians who were supposedly well paid for defending and protecting most citizens rights and necessities . Dr Paul is brilliant, just, fair, real and its is said that he did... [[ This is a content summary only. Visit http://FinanceArmageddon.blogspot.com or http://lindseywilliams101.blogspot.com for full links, other content, and more! ]]

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26 июня, 07:36

Do Americans spend more money on the health care of the poor than the rich?

From Twitter I see this statistic: Ratio of mean health care spending in richest quintile to mean health care spending in poorest quintile For the United States, as reported, that ratio is 0.884 for ages 25-64, and for 65 and up the ratio has two varying estimates, from 0.87 to 0.9. If I am understanding […] The post Do Americans spend more money on the health care of the poor than the rich? appeared first on Marginal REVOLUTION.

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26 июня, 07:30

2 Italian Banks Just COLLAPSED! Government to Begin Asset FIRE SALE!

 Don’t be afraid of the COLLAPSE. You’re surrounded by it now, and you don’t even realize it. One by one the dominoes fall. Power is held in fewer and fewer hands. Every crisis is an opportunity for the technocrats to force their way and get closer and closer to their goal of global... [[ This is a content summary only. Visit http://FinanceArmageddon.blogspot.com or http://lindseywilliams101.blogspot.com for full links, other content, and more! ]]

26 июня, 07:00

YOU ARE ALL BEING REPLACED

 Question: “I work for the largest employer in a western state with an employee base of over 40,000 people. Recently, the entire web development department was told that they will be losing their jobs within the next two weeks and being replaced by a consultant company. The employees who are... [[ This is a content summary only. Visit http://FinanceArmageddon.blogspot.com or http://lindseywilliams101.blogspot.com for full links, other content, and more! ]]

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26 июня, 06:30

New patent shows Facebook wants to "secretly" watch you through your webcam

 Facebook is considering secretly watching and recording users through their webcams and smartphone cameras, a newly discovered patent suggests.The document explains how the company would use technology to see how your facial expressions change when you come across different types of content on... [[ This is a content summary only. Visit http://FinanceArmageddon.blogspot.com or http://lindseywilliams101.blogspot.com for full links, other content, and more! ]]

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26 июня, 06:23

MORE REASONS TO DOUBT THE “INTERNET OF THINGS:” Roadside Cameras Infected with WannaCry Virus Inval…

MORE REASONS TO DOUBT THE “INTERNET OF THINGS:” Roadside Cameras Infected with WannaCry Virus Invalidate 8,000 Traffic Tickets.

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26 июня, 06:00

End Times Signs: Latest Events (June 25, 2017)

 The latest news and end times prophecy from around the world watch this and you will know we are living in the end times, end times signs, end times news, end times events, bible prophecy, prophecy in the news, tornado, earthquake, strange weather, strange events, apocalyptic signs, ... [[ This is a content summary only. Visit http://FinanceArmageddon.blogspot.com or http://lindseywilliams101.blogspot.com for full links, other content, and more! ]]