In 1992, the CBOE hired Robert Whaley to develop a tradeable volatility product on equity index option prices. A year later, in 1993, the VIX was born when the CBOE started publishing real-time quotes on the implied volatility of the calculated S&P 500 index options. In those early days, I very much doubt Robert ever imagined his volatility index would someday be the cornerstone of some of the world’s most actively traded ETFs. In fact, for the next decade, no VIX instruments traded at all, and it wasn’t until 2004 that the VIX future was listed. And then, it took another five years before the first ETF based on those futures hit the exchanges. But what a ride it’s been.
But there are other metrics like the Buffett Indicator (market cap on GDP), the median debt on total assets, the corporate debt to GDP, the price on sales, the price to book, enterprise value on sales, enterprise value on EBITDA – there are a number of different metrics. They all convene that this is a market bubble that has not been seen before in history.
Sometimes newspapers publish credulous fluff pieces about their subjects, but Tom Friedman leaves them all in the dust with his encomium to Mohammed bin Salman (MbS)......The Saudis have been spreading one of the most virulent, destructive forms of Islam around the world for decades, and they have been doing quite a lot to stoke sectarian hatred against Shia Muslims even more in the last decade. Even if Islam in Saudi Arabia before 1979 was “more open and modern” than it is now, I don’t buy for a second that that the same person who has been busy destabilizing the rest of the region in the name of hostility to Iran has a genuine interest in creating a “more open and modern” Islam. This is the sort of thing one says to get credulous Westerners to overlook the enormous crimes being perpetrated right now by the Saudis and their allies in Yemen.
We present some somber reading on this holiday Sunday from Macquarie Capital’s Viktor Shvets, who in this exclusive to ZH readers excerpt from his year-ahead preview, explains why central banks can no longer exit the “doomsday highway” as a result of a “dilemma from hell” which no longer has a practical, real-world resolution, entirely as a result of previous actions by the same central bankers who are now left with no way out from a trap they themselves have created.
Elon Musk said last week that Tesla Inc. is designing a new sports car that could go from zero to 60 mph in 1.9 seconds. Not bad, but here’s a speed number that investors might want to focus on instead: Over the past 12 months, the electric-car maker has been burning money at a clip of about $8,000 a minute (or $480,000 an hour), Bloomberg data show. At this pace, the company is on track to exhaust its current cash pile on Monday, Aug. 6. (At 2:17 a.m. New York time, if you really want to be precise.)
In days of yore (i.e., 2008 BQE) businesses actually had to survive by selling products and services at a price that was more than they cost to produce, as to cover all other ancillary expenses. (I know, heresy, but stay with me.) If they didn’t? They weren’t called a business, they were called a charity..... Today? It’s just called speculative “investing” or, “Angel” or, “Series A,B,C,” – LMNOP fundraising. Bernie Madoff must be sitting in his cell wondering, “And just what am I in here for, precisely?”
I’m not a terribly religious man. But, I’d like to believe there is a special corner in Hell reserved for those that fomented the Syrian Civil War. From its beginnings in Libya with gun-funneling through the U.S. embassy in Benghazi to yesterday’s meeting between Russian President Vladimir Putin and Syrian President Bashar al-Assad, this entire affair will be remembered as one of the most cynical and abusive periods of history. The Syrian ‘Civil War’ was meant to be the crowning achievement of U.S./Israeli/Saudi policy in the Middle East, the apotheosis of neoconservatism. Had it succeeded it would have transformed the world into a living hell governed by the likes of Hillary Clinton, George Soros, Angela Merkel and the U.S./U.K. banking cartel.
Maybe this will help: the ECB, the Fed, and the BoJ have a combined balance sheet that is the equivalent of 100 Bridgewaters. So take Ray Dalio and multiply him by 100. For fun: Yellen, Draghi, and Kuroda are a combined 1,612 David Einhorns, AUM wise. Or maybe this: their combined balance sheet is the size of China's entire shadow banking system. If the Fed, the ECB and the BoJ were allowed to quote Denzel Washington in press conferences, they could easy use the famous quote from Training Day: "I'm the police, I run things here. You just live here. King Kong ain't got nothin' on me."
According to the latest retail data, car sales slowed to a 0.7 percent growth rate in October, far below September’s blistering 4.6-percent pace. Nonetheless, the next development could be a further deterioration in auto delinquencies attributed to storm victims. The most recent third-quarter data from the New York Fed suggest struggling households continue to buckle under the strains of their monthly payments. The delinquency rate for subprime loans originated by auto-finance companies, as opposed to banks, hit 9.7 percent in the three months ended in September. With one in four auto loans outstanding going to subprime borrowers...... all but ensuring 2009’s peak of 10.9 percent will be breached in the next downturn.
Yemen today is arguably the worst humanitarian crisis on earth, and America’s role in it is undeniable and indispensable. If the United States were to tell Crown Prince Mohammed bin Salman that we were no longer going to support his war in Yemen, the Saudis would have to accept the reality that they have lost this war. Indeed, given Riyadh’s failure in the Syria civil war, its failure to discipline rebellious Qatar, its stalemated war and human rights disaster in Yemen, Trump might take a hard second look at the Sunni monarchy that is the pillar of U.S. policy in the Persian Gulf.