5.56NATO
11-27-2017, 02:49 PM
There’s $1.2 billion of the XIV, which is the short ETF. There’s $1.3 billion of the SVXY, which is another short one. These are staggering numbers.
In my days, when I was on the institutional desk, we had this big – I did index arbitrage, and we used to go out and buy the baskets and sell the futures. One day the risk manager came to me and said, if you had to take this position off (because we had accumulated this big position) how long would it take you? And who would do it?
And I said, the reality is that there’s nobody. You know, we were the biggest player in the market and there was nobody that was going to take this off of us. The only way was to go all the way to expiry.
Well, the reality is that these numbers are way bigger than any market player can absorb. And, if we get a situation where – as Francesco says, all it’s going to take is a return of the VIX from its current level of 10 to its average level of 18 or 19 to wipe out these products.
I guess that’s the point that I want to make: If you’re actually owning these things, you should be aware that all it will take is a move of 80% and then they’re going to wind down these products. So the XIV, when it moves up, if all of a sudden VIX goes from 10 to 18 in a day, they’re going to wind down that product.
And what’s going to be really scary is the amount of VIX futures that is going to have to be bought, because they’re short all those VIX futures and they’re going to have to buy them back.
http://www.zerohedge.com/news/2017-11-27/did-short-vix-bubble-just-burst
When the crisis, that temporarily paused in 2009, resumes in earnest, there will be money printing on a scale that the world has never experienced before. That will be the time when the world will learn that the word ‘quadrillion’ actually exists, although no one can imagine the magnitude of that word. To put it in perspective, one quadrillion dollars is 15 years’ global GDP. So if global debt goes to one quadrillion dollars, including most derivatives, we would have to spend the next 15 years using the total gross production of the world just to repay the debt. That would mean 100% tax for 15 years. But is doesn’t stop there. When debt defaults start on a larger scale, central banks will lose control of interest rates. The manipulation of rates defies all laws of nature and supply and demand. It is not possible to have maximum credit and minimum interest rates. In a free market, if demand for credit is high, the cost of credit will also be very high.
https://kingworldnews.com/greyerz-will-this-be-the-trade-of-the-century/
Never considered a short vix collapse as a possible cause of the greatest depression, but the figures say otherwise. Might as well be speculatas at blame, someone has to take the fall for the preplanned collapse of the debt money system other than those who control it.
In my days, when I was on the institutional desk, we had this big – I did index arbitrage, and we used to go out and buy the baskets and sell the futures. One day the risk manager came to me and said, if you had to take this position off (because we had accumulated this big position) how long would it take you? And who would do it?
And I said, the reality is that there’s nobody. You know, we were the biggest player in the market and there was nobody that was going to take this off of us. The only way was to go all the way to expiry.
Well, the reality is that these numbers are way bigger than any market player can absorb. And, if we get a situation where – as Francesco says, all it’s going to take is a return of the VIX from its current level of 10 to its average level of 18 or 19 to wipe out these products.
I guess that’s the point that I want to make: If you’re actually owning these things, you should be aware that all it will take is a move of 80% and then they’re going to wind down these products. So the XIV, when it moves up, if all of a sudden VIX goes from 10 to 18 in a day, they’re going to wind down that product.
And what’s going to be really scary is the amount of VIX futures that is going to have to be bought, because they’re short all those VIX futures and they’re going to have to buy them back.
http://www.zerohedge.com/news/2017-11-27/did-short-vix-bubble-just-burst
When the crisis, that temporarily paused in 2009, resumes in earnest, there will be money printing on a scale that the world has never experienced before. That will be the time when the world will learn that the word ‘quadrillion’ actually exists, although no one can imagine the magnitude of that word. To put it in perspective, one quadrillion dollars is 15 years’ global GDP. So if global debt goes to one quadrillion dollars, including most derivatives, we would have to spend the next 15 years using the total gross production of the world just to repay the debt. That would mean 100% tax for 15 years. But is doesn’t stop there. When debt defaults start on a larger scale, central banks will lose control of interest rates. The manipulation of rates defies all laws of nature and supply and demand. It is not possible to have maximum credit and minimum interest rates. In a free market, if demand for credit is high, the cost of credit will also be very high.
https://kingworldnews.com/greyerz-will-this-be-the-trade-of-the-century/
Never considered a short vix collapse as a possible cause of the greatest depression, but the figures say otherwise. Might as well be speculatas at blame, someone has to take the fall for the preplanned collapse of the debt money system other than those who control it.