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Kolanovic Unveils His 2018 Outlook: The “Frogs Are Almost Boiled” So Start Hedging

Barely two months after JPMorgan’s Marko Kolanovic previewed the next financial crisis, which he dubbed the “Great Liquidity Crisis”, and which would be catalyzed by the following liquidity disrupting elements: Decreased AUM of strategies that buy value assets Tail risk of private assets Increased AUM of strategies that sell on “autopilot” Liquidity-provision trends Miscalculation of […]


Attention Derivatives Traders: Here Are “The Top 17 Themes To Remember From 2017”

Last week, as part of its must read 2018 Outlook piece, Bank of America’s derivatives team pointed out two particularly notable things: the first was BofA’s version of the (central-bank mediated) “feedback loop” diagram that keeps volatility record low and grinding even lower, as selling of vol has become a self-reinforcing dynamic, in which lower […]


BofA’s Derivatives Wizards Reveal “The Top 17 Themes To Remember From 2017”

Last week, as part of its must read 2018 Outlook piece, Bank of America’s derivatives team pointed out two particularly notable things: the first was BofA’s version of the (central-bank mediated) “feedback loop” diagram that keeps volatility record low and grinding even lower, as selling of vol has become a self-reinforcing dynamic, in which lower […]


Bitcoin Collapse, Equity ‘Flash Crash’, & The Fed Loses Control: Saxo’s ‘Outrageous Predictions’ For 2018

Via Saxo Bank: We’ve delved deep again this year in penning our annual list of 10 Outrageous Predictions. As usual, we roam the world and ride roughshod over consensus in sniffing out these supposedly highly unlikely events with underappreciated potential – events that could have tremendous implications if they come to pass. Enjoy! 2017 was […]


Government Watchdog Warns Market Crash Risk Rising: “One-Sixth Of All Hedge Funds Are 15x Leveraged”

One wonders if the Fed ever reads the reports issued by the Office of Financial Stability, which does a surprisingly good job of laying out the risks facing the market at any one time, which incidentally are far greater than various Fed presidents would care to admit. If it did, it would learn from the […]


Jim Grant Interviews Alan Fournier: “Pension Funds Are So Desperate For Yield, They’re Systemically Selling Vol…”

In the latest installment of RealVision's interview series featuring Jim Grant, longtime publisher of Grant's Interest-Rate Observer, the newsletter publisher sits down with Alan Fournier, the billionaire founder of Pennant Capital, to discuss one of the most widely discussed topics across modern asset markets: Volatility – or rather, the systemic risks posed by not only […]


“It’s All One Single, Giant $22 Trillion Position”: How Market Risk Became Systemic Risk

As excerpted from Fasanara Capital’s “Positive Feedback Loops and Financial Instability: the blind spot of policymakers.” The next time a Fed chair or macroprudential regulator argues that “there is no leverage in the market”, send them this. QE and NIRP have two predominant effects on markets: (i) relentless up-trend in stocks and bonds (the ‘Trend […]


Kolanovic Asks “How Close Are We To The Market Top” And Answers

“How close are we to the market top?” While that is and always has been the question on every trader and investor’s lips, it is also what an increasingly greater number of more and more nervous JPMorgan clients wants to know, especially those who, according to JPM head quant Marko Kolanovic – want to protect […]


Positive Feedback Loops, Financial Instability, & The Blind Spot Of Policymakers

Authored by Francesco Filia of Fasanara Capital, “Learn how to see. Realize that everything connects to everything else.” – Leonardo da Vinci A Dangerous Market Structure is More Worrying than Expensive Asset Valuations and Record Debt Levels Macro-prudential regulations follow financial crises, rarely do they precede one. Even when evidence is abundant of systemic risks […]


“People Ask, Where’s The Leverage This Time?” – Eric Peters Answers

One of the Fed’s recurring arguments meant to explain why the financial system is more stable now than it was 10 years ago, and is therefore less prone to a Lehman or “Black monday”-type event, (which in turn is meant to justify the Fed’s blowing of a 31x Shiller PE bubble) is that there is […]


Deutsche: The Swings In The Market Are About To Get Bigger And Bigger

One week ago, on November 9 something snapped in the Nikkei, which in the span of just over an one hour (from 13:20 to 14:30) crashed more than 800 points (before closing almost unchanged) at the same time as it was revealed that foreigners had just bought a record amount of Japanese stocks the previous […]


Bank Of America: “This Is A Clear Sign Of Irrational Exuberance”

The latest monthly Fund Manager Survey by Bank of America confirmed what recent market actions have already demonstrated, namely that, as BofA Chief Investment Strategist Michael Hartnett explained, there is a “big market conviction in Goldilocks leading to capitulation into risk assets” while at the same time sending Fund managers’ cash levels to a 4-year […]


Hindenburg Omen Sighted As Stocks Suffer First Weekly Loss In 2 Months

Credit markets to stocks this week…   Before we start – let's celebrate. As @BespokeInvest notes, we're making history today: first 12 month period in the history of the S&P 500 without a 3% drawdown. The VIX is also the lowest on record using a rolling 12 month average.   All major indices ended the […]


The ‘Hyper-Crash’ Is Coming – It’s Not The Everything Bubble, It’s The Global Short Volatility Bubble

Two weeks ago, we discussed the recent report from Artemis Capital Management, “Volatility and the Alchemy of Risk – Reflexivity in the Shadows of Black Monday 1987”, authored by Christopher Cole. See “In the Shadows Of Black Monday – “Volatility Isn’t Broken…The Market Is”. The full report can be accessed here. Perhaps because we posted […]


The “Fat Pitch” & Miss

Authored by Lance Roberts via RealInvestmentAdvice.com, While I remain long and invested in the markets on behalf of my clients, I focus and write about the significant risks that are currently present. I am fully aware a laissez-faire attitude towards these risks is ultimately likely to destroy large portions of my clients hard-earned, and irreplaceable, […]