While stock volatility remains at record zombified lows, few can keep their eyes off the unprecedented daily moves in the cryptocurrency space in general, and bitcoin in particular, where 30d realized volatility is in the mid-90%’s, implying a daily move of nearly 6%. In fact, as we showed last week, the only asset/commodity that is more volatile than bitcoin is electricity. Which explains why the dominant slogan of the crypto community is not just “Hodl”, but “Hodl” on for dear life. But what happens if and when volatility returns to equities, though perhaps not with the same intensity as the daily moves in Cry...
Financial and political power are two sides of one coin. We all know the rich are getting richer, and the super-rich are getting super-richer. This reality is illustrated in the chart of income gains, the vast majority of which have flowed to the top .01%–not the top 1%, or the top .1% — to the very tippy top of the wealth-power pyramid: Though all sorts of reasons have been offered to explain this trend–I’ve described the mechanisms of financialization here for years–two that don’t attract much mainstream media attention are money laundering and control fraud, i.e. changing the rules of what’s le...
While the cap-weighted S&P 500 gained 19.42% on the year, the average stock in the index was up less than that at just over 18%. There were exactly 50 stocks in the S&P that gained more than 50% on the year, and there were only 3 that gained more than 100%. We were a bit surprised that only three stocks posted triple-digit returns given the year that markets had. We were even more surprised to see a Utilities stock at the top of the best performers list! That’s right — NRG Energy (NRG) was the top performing stock in the S&P 500 in 2017 with a gain of 132.3%.The other two triple-digit gainers were Align Tech (ALGN), and Ve...
Let me tell you something you should maybe watch for in 2018. You should maybe watch for days when everything falls apart simultaneously. That’s pretty intuitive right? When everything goes to hell in a handbasket – as opposed to just one or two things going to hell in a handbasket – well then you’ve got a problem. Think about it this way. If you get T-boned by a speeding pickup truck going through an intersection on your way to work but your boss gives you a 50% raise when you finally limp into the office on your one remaining good leg, you can look back at the end of the day and say it wasn’t all bad. But if you get T-boned by ...
An ugly end to the year but on the year, the dollar tanked (worst since 2003), stocks and bonds (the long-end) soared higher, commodities rebounded dramatically, cryptocurrencies exploded, and gold had its best year since 2010 as VIX saw its lowest average in history. And all that was driven by the biggest increase in central bank balance sheets since 2011… anyone else feel like this… (our estimate is we are at around the 30 second mark currently). 2017…Now that was a year for stocks… The Dow is up 25% over 2017, putting it on track for its second straight annual increase, as well as its best year since 2013. The S&...