John Batchelor Show: The Exotic Risk Parity Trade Inside the Market Turbulence

By SIMON CONSTABLE

Forbes: How Trillions In Risk-Parity/Volatility Trades Could Sink The Market

By SIMON CONSTABLE

There's a problem lurking in the stock market known as the "risk-parity" trade.

The strategy, which involves investors switching between different assets based on changes in market volatility, has now grown so big that it threatens to sink the market.

How big? Some estimates peg the amount of money pursuing this type of strategy at as high as half a trillion dollars. Trades designed to profit from changes in volatility, which are inextricably linked to risk-parity, add as much as a further $2 trillion.

The issue is not the strategy itself, it is when investors decide that it is no longer useful and decide to exit their positions. In other words, when all at once they dump their positions the market will likely tank.

Here's what you need to know.

PJ Media: Roller Coaster Reflects Change in How Investors are Viewing Stock Market

By SIMON CONSTABLE

One day the stock market is up, the next day it is down.

It’s as if investors just can’t make up their minds. There's good reason for that. There are almost too many variables for Wall Street to absorb quickly.

The stock market has been like a roller coaster all week, a far cry from the solid gain-after-gain in the market we have seen for much of the past few months. The Dow Jones Industrial Average advanced by almost 18 percent in the year through Thursday, an exceptional rally by most standards. Read more here.

Forbes: Five VIX Fund Questions That Need To Be Answered

By SIMON CONSTABLE

Some people may have some 'splaining to do.

The matter at hand concerns two exchange-traded securities that were designed to profit from falls in the VIX, or volatility index, which roughly tracks the volatility of the S&P 500. Read more here.

PJ Media: The EU's Banking Ruse to Create a United States of Europe

By SIMON CONSTABLE

Is the EU trying to pull a ‘fast one’ on its citizens? Maybe so.

Some recent efforts aimed at saving Europe’s banks from another financial crisis may be a Trojan horse aimed at abolishing the nation states of the European Union.

Of course, the EU isn't portraying its efforts that way. Instead, eurocrats (a.k.a. European bureaucrats) are disguising their work as an effort to save the public from a repeat of the 2008-09 taxpayer-funded banking bailouts. Read more here.

Joe Piscopo Show: Talking Markets

By SIMON CONSTABLE

Forbes: Bitcoin Trips at Its First Major Test

By SIMON CONSTABLE

It looks like Bitcoin didn't do that well in its first major test as a substitute for gold.

While the S&P 500 and the Dow Jones Industrial Average plummeted Monday, so did the price of bitcoin, which is the best known of all the so-called Crypto-currencies. Gold prices remained remarkably steady. Read more here.