Friday, October 24, 2014

WHAT IS THE MARKET PIDDLING ITSELF ABOUT? An interesting poll at vixandmore

Vixandmore - here's what people are worried about. I've decided to start following Bill Luby again, now that I have a clue what $VIX actually means.

And he posted something last week that was very interesting. This chart:

shows you how mind-numbingly stupid this market was last week.

Let's go through the stupidism one at a time:

21.6% of people were scared of the end of QE and the "Fed safety net".

That's because they don't understand that the end of QE means monetary normalization, which is a good thing. And it means Janet Yellen has decided the US economy is strong enough to start taking the training wheels off, which is a good thing (as long as you're not one of those clowns who thinks he's so much smarter than Janet Yellen). So 21.6% of the market are morons.

But wait!

Another 15.5% of people were scared of the Ebola virus.

That's because they don't understand that Ebola only spread in Dallas because Presby Hospital's management were criminally incompetent assholes (really, in my country they would be under investigation right now) who forced nurses to use insufficient equipment. Trust me, the CDC is now coming down on the entire health care industry like a ton of bricks.

So 37.1% of the market are morons.

But wait!

Another 15.2% of people are scared because TA.

They're also morons. No explanation required. If they're scared based on the 200SMA, they're simply morons.

So 52.3% of the market are morons.

But wait!

Another 9.4% of people are scared because of a weak US economy.

They're also morons. Read New Deal Demoncrat and Calculated Risk, and get yourself some real economic data instead of the bullshit that that fucking clown Joe Kernen spouts out of his ignorant Republican mouth on CNBC.

So 61.7% of the market are morons.

OK, the next 7 things in the list are things you might want to be worried about. But only 38.3% of the market are worried about them.

Thus, by math, the market had 161% more fear in it than it should have had.


  1. Been following your blog, massive fan of the no-bullshit approach.

    Can you provide a good argument as to why QE finishing will not effect the markets?

    Clear correlation between Fed Assets and S&P as I am sure you have seen, whilst not causation... It does make you wonder? All for continued rise in S&P, just struggle to see it materialise with Euro/China slowdown and QE ceasing.

    1. Correlation means utterly nothing unless you can suggest a mechanism by which one is a function of the other, in which case you can then look for empirical evidence and judge for yourself.

      Will the eventual unwinding of the Fed's book, allowing their assets to mature, send the S&P back down to 666? Why not?

      S&P price is earnings times multiple. Basic fact. The market might get stupid and assign a lower multiple, which would send the market down, but earnings are going up, and we know this because the coincident and leading indicators are pointing up. And things looking up means you get a high multiple.

      Avoid any "economics" discussion on goldbug blogs.