Loading ...FilledBuy to Open280VXX Jan 17 2020 16.0 CallLimit0.09—-15:10:14 01/10/20
FilledBuy to Open120VXX Jan 17 2020 16.0 CallLimit0.09—-15:10:14 01/10/20
“I do think the growth in the balance sheet is having some impact on the financial markets and on the valuation of risk assets…I want to be cognizant of not adding more fuel that could help create further excesses and imbalances.”
“Some”. Cute. How about all as the correlation has been well established and the Fed is recognized as the only game in town. But at least it’s an admission and a recognition that excesses and imbalances are being created and are already in place.
Last night’s discussion on CNBC Fast Money by all participants shows how pervasive this recognition is, that the Fed is driving everything, it’s not just yours truly that keeps highlighting this point:
In party like it’s 1999 I made the point that the action by the Fed is similar to what it did in the run up to Y2K. Once that was over Greenspan withdrew liquidity and markets crashed.
Already the Fed is backpedaling on reducing liquidity knowing full well it would cause trouble in equity markets:
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All the historic bullish extremes-in sentiment and valuation–are setting up a once in a lifetime long vol trade–like the 2018 short vol one day implosion…hence-I judiciously keep dipping my beak–today was a day to take a shot–not every day is…I simply can’t imagine what could cause any serious downside for this mkt…so far my attempts have cost me only lunch money…