Why do you think it's going up? Central Banks fixed derivatives
blowup with Quantitative Easing. Liquidity collapsed volatility.
Derivative trades are way up, and dragging World stoxx higher.
Who's driving 'em up on record volume? The trading robots who
sell volatility, of course, not J6P. The same robots
are selling the dollar. They will keep selling it.
So, we are even. But to say that 600 Trillion derivative
Ponzi scheme that blew up last Fall, was fixed with
enormous liquidity injection, and is currently growing,
does not represent future danger would be dreaming.
No, things are not close to blowing up currently, so your
team wins. But the Fix was the same as in 1987, 1990, 1997,
2001, etc. Back in these days it contributed to much bigger
derivative bubble, and the CDS portion of it detonated, cause
it's kinda instantaneous. The interest rate swaps portion
is slow death. Things have been healed, thou, as the Fed
became the losing printin' counterparty.
Until I see this thing get smaller, not bigger, I'll be
worried. Sovereign issues weigh on the heart of it, the
so-called "risk free" rate. About 500 Trillion notional,
and a fair portion of global stock market in real value.
One could reasonably argue that this Fix continues forever,
and that path leads to much higher stock prices and hyperinflation,
coz the Fed can't stop printin' or the whole mess will collapse
upon itself. But, you need to watch 'em, cause if they
do stop, it will collapse upon itself -g- |
