"Everyone in the Room is Selling Volatility"

Volatility was once just a measure. Now it's an income-generating product. Everyone is selling it says Pennant Capital.

"We are pretty late in the game," says Alan Fournier, founder of Pennant Capital in an interview with James Grant.

Fournier tells Grant about a recent experience in which he made a presentation to a group of pension investors at the request of an investment bank.

Following his presentation, Fournier mentioned selling volatility to the host. The host replied, "I want you to know that everyone in this room is selling vol."

Fournier's presentation was to a group of large European pension funds.

Fournier described their strategy. "When they get a selloff, they sell more."

This is the Nifty-Fifty and LTCM on steroids. Some major pension plan is going to get carted out with a total loss at some point.

Mike "Mish" Shedlock

"Some major pension plan is going to get carted out with a total loss at some point. " -- Will the Fed allow it? Who will don the role of Paulson this time? Printing press and screwing tax-payers and savers is always at hand...

Yup, the Fed Put killed volatility. Long live the Fed Put.

Dr.Marvin Goodfriend has been nominated to the Fed by Trump. That should help. He likes Negative interest rates and wants to abolish cash. Next time if the market crashes, I very much hope that people lynch the Fed officials. If the people in power will not do the right thing then this is what they deserve to get...

"a quantum shift from 'value' investing to a 'growth at any price' mentality"... a quote selected from "Remember the Nifty Fifty?" as I had not. https://www.usatoday.com/story/money/business/2014/04/01/ozy-nifty-50-stocks/7156447/ "I want you to know that everyone in this room is selling vol." ---(from post). Everyone putting their eggs into the same basket can't be a good thing... A cluster of clowns poised to fall off the tulip truck... Mania: it's crazy man.

Remember the Nifty Fifty?

Short covering will do magic with vxx.

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