One ‘Ominous’ Sign For The Vol. Sellers: Fatter Tails
“Vol shorts will get their comeuppance, even if it’s later rather than sooner.”
“Vol shorts will get their comeuppance, even if it’s later rather than sooner.”
“We are likely to be nearing a low point for major market bond and equity vol, and if the catalyst is policy it will likely come from positive volatility QE ‘flow effect’ being more powerful than the vol depressant ‘stock effect’.”
After all, “shouldn’t greater uncertainty about key economic policy issues lead to a larger dispersion of likely potential outcomes for companies?”
“I can already hear the guffaws from all my hard money readers. The last thing the government needs to do is spend more money is what they will say. We need to save more, spend less, and tighten our belts. Well, that has been tried.”
“The question every client asks: ‘Is an equity correction imminent?’ The impetus for the inquiry comes from several sources”…
“If volatility is no longer predictable, the “short-vol†strategies used by hedge funds, pension funds and institutional investors—and available through exchange-traded products, too—are riskier than their advocates suggest.”
It turns out people like bullsh*t research. Well, not really. Let me be more specific.
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