It is, but the Fed is right behind it, replacing everything
that blows up with freshly minted cash. Too bad debt and
leverage are both rising fast. -g- This game has high stakes.
He who leaves the party first is gonna be the winner -ggg-
Securities lending, the "hidden" Fed M3 inflating mechanism,
is on fire lately. And, when going gets tough, coupon passes
materialize out of nowhere. -g- As long as there is enough
liquidity, computers ensure VIX is getting lower, pushing
SP500 to new highs in derivative markets. That's the game.
It is not J6P anymore. Rallies are initially very narrow,
fast, furious, and futures-driven. -g-
Mostly this happens due to shorting options with Black-Scholes
automatic hedging. As soon as there is not enough liquidity,
ka-boom. The Fed was just 7 days late in February. -g- Now, now,
the decline due to liquidiy issues should start in July. But
that unless the Fed prints, which of course it will.
Resume - watch Yen and the dollar -g- Once that blows up,
the surf's up. |
