TVIX behaves exactly like one would expect a proxy for a futures contract to behave.
There is lots of volatility it is just less than the volatility of last Friday. How many 600 point drops in a row did you expect?
Because the previous volatility was based on a 600 point drop in a day. If we had had another 600 point drop you would have seen a different scenario play out. The VIX is down as well. The VIX cannot be manipulated.
TVIX is supposed to go down steadily but not because of manipulation. Its because its underlying is a futures contract and all futures contracts lose value with time. That is expected. It would be manipulated if it didn't lose value with time.
Don't banks carry their own auto loans? What caused all the bad debt in 2006 was that banks could make bad home loans and then off load it to wall street making it very low risk for them. I am unaware of repackaged car loans that get sold to investors. And if a bank carries the loan then they will want to make sure they get paid back.
Also cars are easy to resell. Just repossess and sell to a used care dealer in a matter of days if the owner won't make good on the loan to get the car returned to them. It is at a loss but the interest rates are higher so I'm assuming that this is factored in as a cost of doing business. These loans are also short term. Paid off in 5 years. I seriously cant see this causing a financial crisis.
You cannot compare the two debt scenarios. They don't have a lot in common. In 2006 money was being lent to homeowners that didn't have the ability to pay it back. Now it is being lent to governments that can control their interest rates to guarantee they can afford to pay it back and this insures that businesses will benefit from this need for low interest rates. So I don't see how he draws parallels.
The people getting screwed are retired people, pension funds, and insurance companies because they are getting nearly zero returns on their fixed interest investments. Borrowers are relying on the fact that governments cannot afford to pay higher interest so their interest cost will be governed by that.
I am not sure that Jim Rogers have thought about it from this perspective. Maybe he has in which case I would like to know what he has to say. But if he is just saying we are in greater debt without thinking about the kind of debt and the likely scenario for interest rate hikes in the future then I don't think his opinion is not well thought out. I think Jim Rogers understands companies well. I am not convinced that he has spent a similar about of time trying to understand global economics.
All the available shares are already shorted. All one can do is hold what you have and wait. To longs you may want to wonder why so many people are willing to short to the point that every available share in the market has been shorted. That is a confident commitment to the short side.
The fact that the DOW dropped an additional 230 points but the VIX its self has declined 9% is an indication that a decline of 230 relative to last weeks single day decline of 600 is considered lower volatility than what we had last week. Eventually TVIX will have to catch up to the VIX. Normally it is lower than the VIX so this means that TVIX is out of whack with the VIX. This is a gift for longs however I am hoping that most longs continue to hold, which they probably will, so my broker won't be forced to cover my shares to prevent naked shorting. But I am confident that longs will hold until they lose money because this is what longs usually do.
Also Germany and France are having major unrest over immigration as well. So there is a way that Europe can halt this EU break up and that is to concede that their immigration policies are leading to a break up of the EU and to react to this information in a way that assuages people into no longer wanting to get out of the EU. I don't think that the open border liberals can win this battle if the it leads to the break up of the EU.
Too many people are proud of their heritage and won't want to lose their national identity due to lax immigration rules. Europe has 1000s of years of history that is irrelevant to these new immigrants and that is a concern to them. Pride in who they are and how they got there is going to decide what path the EU takes to ensure their survival. And I think the brexit vote brought this issue to the stop of the stack. It is now what they are thinking about the most and it has also emboldened the people in other large European countries to push for similar votes to exit the EU. So this will get resolved soon or the EU will cease to exist.
From what I have been reading the reason for the brexit has nothing to do with economics. Older Britain's wanted to put a halt to unchecked immigration that the EU has been forcing upon them. They are trying to ensure the preservation of their culture by slowing down immigration to a rate that doesn't threaten the preservation of their culture. And they are willing to take an economic hit to this end. So this runs deeper than an opinion of what is best for them economically. They perceive this as a fight for the survival of who they are.
Britain is just upset over the way the EU central banks mishandled the 2008 financial crisis and the bail outs that came later. If the EU did not exist then there would be separate central banks and low productivity socialist countries could devalue their currencies allowing themselves to compete against higher productivity countries like Germany. But if you use the Euro as your currency then you are locked in and when your unions inflate wages you can't correct the uncompetitiveness this creates and your economy contracts. The EU is not good for everyone in the EU. It is only good for the more productive economies that can eat the lunch of the less productive economies because these lesser economies have no means to correct their uncompetitiveness since they are locked into a currency they have no control over. What you are seeing now is actually a good thing. A EU without a common currency would solve this problem. That is where I think this is headed. Basically an EU without tariffs but with separate currencies. Still a union but able to correct valuation imbalances so each country can compete.
First off brexit doesn't go into effect for two years which is irrelevant as far as TVIX is concerned. Second European investors will flee to the US market seeking stability. Any impact that this could have in US exports is so far out into the future that it is also irrelevant as far as TVIX is concerned. All you are seeing now are people concerned about what might happen in the future but that will eventually get over shadowed by current events that are actually happening or not happening, which is even more important. High volatility is always temporary. Anyone who doesn't short more than 10% of their account will be fine. Don't get greedy and you will keep making steady profits as always. Get greedy and you may regret it.
I shorted UVXY instead. It tracks TVIX precisely so it's the same thing. I think all the people who know about shorting there volatility ETFs are jumping on board. You need to be fast. I should haven known that premarket was bull. It always is. Should have shorted then.
You do the opposite of what the people who make money do. You bought after the event. That's not how you make money. Unless you are shorting. Then you can short after the event.
The shock of the even is over. But please buy more shares so they will be available for me to short because the other shorts already borrowed all available shares
Markets are just shocked. Nothing more. And now they are realizing that this doesn't impact the profits of companies so it doesn't mean anything.