atans1

“Sign of a market top? Hedging is passé”

In Uncategorized on 10/01/2018 at 6:12 pm
Taz headline of NYT Dealbook piece. It goes on

Some investors have apparently decided that protecting themselves against a decline in the markets is a waste of money, Gunjan Banerji of the WSJ reports:

“I haven’t seen hedging activity this light since the end of the financial crisis,” said Peter Cecchini, a New York-based chief market strategist at Cantor Fitzgerald. “It started in late 2016 and accelerated in the second half of the year.”

At the same time, analysts have raised their forecasts for corporate profits as fast as they have in a decade. History suggests that might presage a slump.

  1. while the ingredients for a crisis are all there, u need a trigger; in early 2008, bear sterns went insolvent, followed soon by lehman brothers; the former was rescued; misled by the calmness of the market following this, fed and treasury grew optimistic enough to refuse to bail out lehman brothers, and a full blown crisis followed

    will bitcoin trigger the next one? it is not clear whether a large fall in bitcoin price would cause a chain effect; while the large retailers might make up the weakest sector, there is also no single company whose chapter 11 would definitely produce a chain effect; for now at least, there is no obvious candidate for the trigger

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