No Fear...Anywhere

Two recent posts, "No Fear," and "Reversal Time?" noted the fact that investor sentiment looks dangerously complacent. But that seeming lack of fear is actually a global phenomenon. Not only is the widely watched CBOE Volatility Index (VIX) trading near its multi-year lows, indicating that options traders are less-than-concerned about the prospect of a major market disruption, so, too, are implied volatility indexes in Europe, China, and Japan.

The obvious question, of course, is whether such complacency is justified. History would say otherwise.

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Comments

[Tom]

So if Japan and China actually come to blows over this rockpile off the coast, would that be considered a "black swan?" Japan has already closed many factories and retail stores in China as a result of this bullshit and it's like "our" little movie provocation of the Muslims - it ain't goin' away! Things are coming unglued out there in the real world and before long the proverbial defecation will impact the rotary impeller of air. Humanity is showing its true colors - stupidity to the max on all sides.

[roger]

No Fear...Anywhere.
Volatility index is the wrong choice of words.
Frenzy index would be a better choice.
Chumming is always a good technique to create extreme excitement for hungry fish.
QE = chumming with dollar bait, and will produce the same effect with greedy speculators.

[Doc]

Well.

...hmm, the charts today are at a point equal to and lowest since 2008...maybe the information is more an indicator of how many sharks (aka: option trader's and "hedge" Mgr's) inhabiting the waters, hunting and killing the hard working retail investor (previously known as longs (oh, and their clients by the way) ...whether individual equities or the retail MF owner's - the biggest Ponzi and fee scheme of them all) ... and those multi-market "VIX" ratings are more an indicator of how many schools of retail investors had been slaughtered and eaten, or maybe a better analogy: an indicator of the fishing fleets financial "take" by market. Volatility increases are the sinister sounds of the factory ships belching and churning out the guts of the proletariat investor.

Wow, aren't we a bit cynical!? Ah, yeah.

Just like big, dumb, predictable schools of fish...except the schools are all but gone. (oh, but thank god for the union and municipal 403B investor...guaranteed pensions, who cares about returns...just tax everyone else as it shortfalls). What is left of the main street retail fish seemed to have evolved for the moment and have grown some legs. They better learn to run, fast.

Problem is the "dumb" investor is staying out of the water for now and as they should (regardless of government pumping gains these past three-four years) and maybe it is for good reason...meanwhile, the sharks are all dressed up like flying pigs saying "come on in" all is fine. Ah...no thanks, will pass.

So the sharks might just be eyeing themselves for their next meal and that is going to be scary if and when that happens. Let's see how well the loyalty holds up these next six months. Plan on lot's of advertising to come for a swim. Hold on to your programmed trades, it is going to get very rough! Mark my words.

...and then, the pigs begin to turn into wolfs.

Doc

[Marion Shaw]

Tom, the black swan and many
of her descendants have been
flying around Asia for centuries;no doubt first cousins
to the ones that also dominated
Europe,etc. However this Japanese swan is sitting on a
pile of Chinese golden eggs
and my guess is once enough
money starts blowing down the
black hole of lost production,
the swan will return to her
dark habitations, and the
beautiful red crown cranes of
Hokkaido will once again dance
to the delight of the Asian
public everywhere. Fortunately,
this is not 1930; not yet
anyway.

[Bill K.]

Why not just interpret volatility indices like VIX as trailing indices, averageing what just happened over the previous, not the future 6 months?

[Willy2]

I compare the ETF called VXZ with the $vix. And that also reveals complacency to the extreme.

[No fear....Angst]

"Who Stole the American Dream
Then finally Pulitzer prize-winning author Hedrick Smith joins us to discuss his latest book “Who Stole the American Dream”. We examine the shift in the last few decades in which a greater and greater percentage of the nation’s wealth has been concentrated in the hand of fewer and fewer of the ultra-wealthy, while the American dream has become more difficult for the middle class and impossible for working Americans to attain.

http://ianmasters.com/sites/default/files/images/bbriefing_2012_09_18c_hedrick%20smith.mp3

Romney Accuses 47% of Americans of Not Paying Taxes But Won't release his taxes

We begin with the release of comments made at a fundraiser that expose Mitt Romney’s real attitudes towards voters. Tax expert, economist and investigative journalist James Henry joins us to discuss Romney’s contention that 47% of Americans don’t pay income taxes and won’t take personal responsibility and care for their lives. James Henry was the lead researcher on the Tax Justice Network’s recent report “The Price of Offshore Revisited” which reveals how the likes of Mitt Romney hide their money abroad to avoid paying taxes.

http://ianmasters.com/sites/default/files/images/bbriefing_2012_09_18a_james%20henry.mp3

[Alex Gold Goldman]

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http://www.sh1ny.com Founder.