Irrational idiotic exuberance -- markets can only go up, right?
(Reuters) -Volatility Shares, an issuer of exchange-traded funds, filed on Wednesday to launch a total of 27 highly leveraged ETFs, including the first-ever proposed 5x ETF for the U.S. market, at a time of rising caution over inflated asset prices as markets continue their upward swing....
https://finance.yahoo.com/news/volatility-shares-files-first-ever-182608186.html
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"Volatility Shares builds leveraged, crypto-linked, and VIX related exchange-traded funds (ETFs) for experienced traders."
AKA Highway to Hell
SEC has restricted ETFs to +/- 2x, but didn't restrict ETNs that can still be +/- 3x.
Existing +/- 3x ETFs weren't affected - may be that is giving the filers hope.
Some have already filed for +/- 3x ETFs to test, but +/- 5x may prompt SEC to act quickly on this.
https://www.nytimes.com/2025/10/17/business/bull-market-trump-biden.html
I don’t doubt that 24% figure for the lowest rated borrowers. Of course, 24% if compounded quarterly or monthly would lead to a much higher annual rate. When I do monthly compounding (just out of curiosity) I get close to 27% annual.
Usury laws vary by state. In Colorado, potentially as high as 45% interest is allowed on some types of loans.
https://mediabiasfactcheck.com/zero-hedge/
The uptrend chart says the opposite. (https://schrts.co/XxpceUfz)
Bad news has always sold better, and clickbait has become the norm.
Article - ”Stocks Could Climb Through 2026, According to Our Latest Survey of Money Managers”
I’ve been listening to 1929 late at night before falling asleep. So have only digested 2 or 3 chapters - with glimpses into later portions. However, it messes with your brain to hear about an epic period when attitudes towards markets were similar to today …, then to read some of the market hype in today’s press. In early ‘29 a large percentage of the population were buying stocks. Loans “secured” by stock were being taken out to buy more. A lot of leverage was used to magnify ROI. Public outcry erupted when regulators contemplated restricting some of the most egregious practices. And the Fed seemed stuck ”between a rock and a hard place” like today.
FD said ”Bad news has always sold better, and clickbait has become the norm “
Clickbait yes. And we are worse for it. In terms of financial “news” I think that extreme positions on both sides sell equally well. Bearish and bullish articles alike. Watch Bloomberg and you might conclude, depending on the particular day. it’s either raining cats & dogs or the sun is out and will continue to shine forever. Little real analysis.
I am not a fan of predatory lending. Still, how is this different from letting people run up credit card debt at the maximum (24%)? Something that every single financial entity in America has their hooks into. What is the solution here? Government enforced lending standards? IDK
I remember quite clearly that in the 1-2 years before both the Dotcom events and the GFC, many people were raising red flags. The common refrain was, "they have been saying this for months". I watched people buy more and more, at the top. Certain it would go up forever. It took well over a year for both these things to blow up in everyone's face. And it impacted even those who were not heavily in stocks. Jobs lost, homes lost, bad times all around.