Business

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.

Authored by Simon Black via SovereignMan.com,

The Great Financial Crisis happened because Wall Street was financing homes for people who couldn’t afford them.

Leading up to the GFC, there was a voracious appetite from investors for “AAA”-rated mortgage debt. So lenders would make lots of loans to subprime borrowers and sell them to Wall Street. Wall Street would pool them together and one of the major ratings agencies (like Moody’s or Standard & Poor’s) would stamp the steaming pile of garbage with AAA.