Is The World Headed For Another Financial Crisis?
KingWorldNews.com
May 09, 2017
With the gold market getting hit as the dollar rallies after the VIX saw its lowest print in almost a quarter century, is the world headed for another financial crisis?
May 9 (King World News) – Here is what Peter Boockvar wrote today as the world awaits the next round of monetary madness: With the lowest VIX closing print since December 28th, 1993 yesterday and it being discussed everywhere I’ll chime in as a watcher of it for the past 25 years when over the course of that time it averaged 20. The VIX we know tells us nothing about where markets go in the short term as it’s just another short term indicator on the scoreboard but at the same time it’s easy to say that from this level the next 5-10+ points are up, not down with just the question being when and how much the stock market falls in that move (assuming it does). About 3 ½ months after that 1993 print it spiked to 24 and the SPX fell about 7% as the Greenspan Fed began what was to be an aggressive rate hike cycle…
The Height Of Complacency
It revisited the low 10 level in late 1995 and the SPX fell 3% right after but then took off as we know the spectacular part of the 1982-2000 bull market was just beginning. We again saw the 10 level in 2005 but the market still had time to go on the upside even though Greenspan was hiking rates at every single meeting that year. The true delusion started to set into stocks when in late 2006 into early 2007 the VIX broke even below the 2005 low just as the credit markets were beginning to blow up. That was the height of complacency that was quickly shattered by late February ’07. Bear Stearns closed at a record high of $171.51 on January 12, 2007. By June of that year, the two internal mortgage based hedge funds imploded and Bear fell to around $150. I won’t rehash anymore.
The Rest…HERE
