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Modern Market Minsky Moments
How long does a given market theme have to last before it becomes structural?
Put (slightly) different, at what point does a recurring theme become a fixture -- an attribute of (modern) market structure?
I can't answer that question with specificity, but I think it's fair to suggest the combined vol supply overhang from various and sundry manifestations of VRP-harvesting and what the Wall Street Journal amusingly called "boomer candy," is now structural.
This discussion can be as nuanced (rea
Nice article and well balanced. Whether it is the skier’s scream or the shouting of fire in the theatre? The change will be rapid.
To really set up for a market changing chain of events, i suspect we’d need to see another spike in volatility which quickly is supressed by vol sellers yet again. A crack would follow if that tried & true strategy only worked for a day or so and then underlying asset prices had a second, more violent, sell off.
You need every seat in the bus filled with a few standees before a major and lasting wringing out of short volatility positions can occur. Vol selling will not end unless/until it leads to relentless ONGOING losses.
Good thing we elected the very stable genius!
“Total respect.” https://www.youtube.com/watch?v=FQgjpnr5e2s&ab_channel=KCALNews
“China has TOTAL RESPECT, for Donald Trump, and for Donald Trump’s very, very large a-brain.” Classic. It’s even funnier if you try to imagine other U.S. presidents making that same comment: Abraham Lincoln, F.D.R., Dwight D. Eisenhower, or J.F.K perhaps. Maybe Nixon could have pulled it off, but he actually made tangible progress in Sino-U.S. relations.
https://tenor.com/view/pillsbury-doughboy-poke-poking-cute-gif-26966640
Large covered call positions for the highest 1% of the equity holders could go on for quite a while.