The waters look calm to the bulls, only the bears are running
scared with wide eyes open (that includes me), expecting yet another save. I agree
with you, lots of nasty stuff out there. I've been crying
wolf for years regarding LTCM-like mega blow-up. It can't be
allowed, a lot of systemic blow-up protection agencies are out there.
The real question now is can it be stopped? Getting
under a steamroller is not fun. 1987 may seem like a walk
in the park today if we really get to that point, which,
of course, might not happen now, but seems rather inevitable
some day. These trades will simply keep piling up until they
no longer can, just as they did in recent years. Leverage
upon leverage. Why was Paulsen, Bernanke, and others screaming
everything is fine?
Tails in probability distributions are singular
events. It is impossible to forecast those on the basis of
standard models, although their probability goes as
a power law, and diverges. Hehehe. That's exactly the reason
everyone IGNORES them. -ggg-
Meanwhile, we keep dancing on a pile of nukes. Liquidity
issues? No problem. Until it becomes everyone's problem -g-
All I know is when it comes, it will be a big one this time. |
