ajtj's Post-Lobotomy Market Charts and Thoughts Message Board

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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts

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ajtj99

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To: ajtj99 who wrote (58594)	5/2/2022 9:25:37 AM
From: Real Man	2 Recommendations of 97127

Yes, basically when derivative markets were born. 1987 was caused by portfolio insurance, which caused an avalanche of shorting when prices blew through certain levels. The black scholes model was used with constant volatility. It was replaced with implied volatility since, and many more tiny improvements that make money when times are good. Goldman did not have a single losing day in a while. The random walk financial mathematics took over Wall Street, but all it does is creates more and more leverage to pick up the same profits. They know the Fed got their back if it all blows up. It is not the Fed’s job to make markets Gaussian so Wall Street reaps enormous profits. Since the activity suppresses the vix, markets go to da moon until they no longer can. I don’t know what happens then, but most likely it is not pretty at all.

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