Friday, October 24, 2014

Some Friday reading

Bloomberg - sharpest $VIX drop in like evarrr. Quote:
Investors flocking back to equities are asking what changed to ignite a plunge that erased $2 trillion from American stock values. While falling oil prices spurred a 20 percent drop in energy producers, cheaper fuel is now underpinning a rally in airlines and railroads that is approaching 10 percent. Data showed gains in home sales and consumer confidence and earnings from Apple Inc. (AAPL) to Morgan Stanley exceeded analyst estimates.

“It’s not like we suddenly had a different macro-economic picture,” Justin Golden, a partner at Lake Hill Capital Management LLC in New York, said by phone. “The markets started to roll over and there was forced panic.”
There's a difference between rational expectations and irrational panic.

FT Alphaville - now that everyone's a volatility seller.... Izzy Kamizzy has decided that all of a sudden it's interesting to question the buying of short $VIX ETPs. It would be nice to see some real data and some in-depth discussion of the topic of XIV's market cap and its effect on volatility; a lot of the VIX blogs (like vixandmore) did go into the details a few years ago, but the trade is a lot larger now. I personally think it's really just an arb between short-term irrational fear and long-term rational expectations. After all, why should $VIX spike to 30 just because Presby's management are assholes?

Reuters - stagnating Eurozone seeks to persuade Germany to haha you're kidding me. Germans are two things: cement-headed, and happy to suffer as long as it makes other people suffer more.

Men's Journal - how to get rich on pot stocks. Yeah, they've figured out that junior mining execs are shady characters.

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