From the WSJ MarketBeaters blog, on the strangeness of just what 75% VIXy means/implies(!):
...some people have been taking positions in the likes of put options on the S&P at 750. These are expiring at the end of the week and they’re trading at about $3, says William Lefkowitz, chief options strategist at vFinance Investments. A goofy bet like this would normally cost the buyer a nickel, because it’s so preposterous. Not anymore.
Among the culprits in today's selloff:
- -Paulson's walk-away
- -A couple of defaults (waiting for confirmation) inside CMBS, spreading a new round of panic over of asset quality among the banks
- -A political uncertainty-tsunami coming from Washington, who are heckling over ... the kinds of details that will be rounding errors if the big picture is ... "lost".
- -A weak CPI
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