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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (57011)	3/28/2006 2:35:15 PM
From: re3	Respond to of 110194

Date: Tue Mar 28 2006 13:43 trotsky (Hussman on risk) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved in a recent missive, Mr. Hussman remarked on the popular misperceptions about risk pricing. for instance, some people say, 'well, we know such and such risks are out there - but so does everybody else. therefore, it is already priced into the market'. well, not so fast. true, there are risks everybody knows about ( such as the flat/inverted yield curve for instance, the best recession predictor known ) . but there's a difference between the RECOGNITION of risks and actually doing something about them. Hussman correctly concludes that what is important are 'the risks that investors recognize, but HAVE NOT YET ACTED UPON'. this is precisely the type of limbo the stock market now inhabits - risk is underpriced ( as is evident in options volatility premia being extremely low, historically ) , but that doesn't mean risk is absent. in fact, there is a plethora of risks most traders and investors are aware of. they have only thus far NOT 'priced them in'. that only happens once they act - i.e. as soon as the 'devil gets the hindmost' fear replaces greed for a while.

To: ild who wrote (57011)	3/28/2006 2:48:24 PM
From: John Vosilla	Read Replies (2) \| Respond to of 110194

Patron are LEND and BHS finally going to collapse now?