Thanks, Russell. Brings back memories of my starting work in Australian commercial property in the late 1980s; Japanese capital was pouring into the market and no deal was too big (there were even plans for a new futuristic city outside Adelaide). By 1991 the tap was turned off and commercial property values collapsed. Sydney CBD especially was left with numerous holes in the ground where planned developments were abruptly abandoned.
There is an argument that when there is too much capital around, something will turn up to destroy it... Australian property in the 1980s, railways in the early 1900s, and possibly AI today? who knows.
I think you’re right and VIX is very telling. I think the VIX as just a ‘fear indicator’ is missing a crucial step. Fear is the reaction to misallocated risk. The VIX shows how significantly position allocations are being corrected
Thanks, Russell. Brings back memories of my starting work in Australian commercial property in the late 1980s; Japanese capital was pouring into the market and no deal was too big (there were even plans for a new futuristic city outside Adelaide). By 1991 the tap was turned off and commercial property values collapsed. Sydney CBD especially was left with numerous holes in the ground where planned developments were abruptly abandoned.
There is an argument that when there is too much capital around, something will turn up to destroy it... Australian property in the 1980s, railways in the early 1900s, and possibly AI today? who knows.
really enjoying these, thank you
Great listen! Reminds me of my impression of Hong Kong when I was young, ever since I never doubted China's growth path and look at it now!
My other thought listening was the implications of lightning speed capital movements these days...
I sense what can be explained by capital flows may soon be explained by derivatives like SVIX, UVIX and currencies in the future
Currencies used to be a great tell... not anymore sadly...
I think you’re right and VIX is very telling. I think the VIX as just a ‘fear indicator’ is missing a crucial step. Fear is the reaction to misallocated risk. The VIX shows how significantly position allocations are being corrected
VIX is also not the tell it once was either...
I think that's because they created the SVIX and UVIX... The green line is the formula.
Not my work, from someone I've followed for years whom has been quite instructive.
Yes - and the rise of autocallable, who are selling vol constantly, meaning it reprices suddenly...