Business

Just over a decade ago, as the S&P was hitting all time highs and there was a line around the block of 30-some year old hedge fund managers, desperate to put other people's money in various ultra risky investments just so they could pick a few excess bps of yield over Treasurys - a situation painfully familiar to what is going on now - Goldman had an epiphany: create new synthetic products that have huge convexity, i.e., provide little upside (such as a few basis points pick up in yield) versus unlimited downside, link them to the shittiest assets possible and sell them to gullible, yie

The Fed's Williams warns that they "don't want there to be excesses in financial markets... "

Two quick things...

The market has almost never been this expensive...

As Peter Boockvar warns: "Almost there. S&P 500 price to sales ratio is just 4% from March 2000 peak."

And investors have never been more concerned about 'black swans'...

There is a seemingly unlimited number of disconnects in financial markets these days, not the least of which is the shocking divergence in recent years between the ever plunging unemployment rate in the United States and stubbornly rising delinquencies on consumer debt. In fact, according to a note published earlier today by UBS strategist Matthew Mish, that divergence continues to soar to all time highs with each passing month...but why?

Yesterday, we showed that after a September with the lowest implied vol on record, October is starting off with the lowest (annualized) realized vol on record.

Of course, as we have shown previously, when looking across capital markets, it's not just equities: vol has dropped to all time lows across virtually every asset class.

Authored by Mike Shedlock via MishTalk (at their new site - www.themaven.net/mishtalk),

P/E ratios are in the stratosphere. Trump struggles to pass his agenda. In the EU, Italian banks are insolvent. Italy may even leave the Eurozone if Beppe Grillo's Five Star movement wins the next election. Who cares?

Currently, the Fed plays tiptoe with rate hikes and the ECB has virtually guaranteed everything with its QE bond program.