Ten years of unprecedented monetary intervention by the world’s central banks has produced an ‘Everything Bubble’ in which assets of all sorts, in markets all over the world, have inflated—many to a truly alarming extent. Some are already deflating, producing anti- bubbles of panic selling. Our new series ’Accidents Waiting to Happen’ will document these events as we move into the final phase of the ‘Everything Bubble’.
Accidents Waiting to Happen- Short VIX -29 April 2019.
The Short VIX trade is back, with the largest ever recorded net short position in VIX futures1, 15 months after Short VIX ETFs were wiped out as the VIX surged by 115% in a day— its biggest up day ever. Just 6 months ago, the VIX ran up by 44% in a single day and 59% in 3 days. There’s a very high probability that those events will be repeated in spite of the ‘low volatility’ in the S&P 500 Index.
Accidents Waiting to Happen- A new series for the final phase of the ‘Everything Bubble’ -29 April 2019.
We are now in a regime were some bubbles have al- ready corrected violently with asset prices going into anti-bubbles of panic selling. Others deflated more sedately and still others have yet to pop. The extent of the coming corrections and the timing of the bubble deflation vary greatly across regions, countries and asset class sectors. Turning point indicators and very high levels of market risk indicate that the end game of the everything bubble is now presenting investors and policy makers with a panoply of accidents waiting to happen.