The VXX and VXZ keep moving
the volatility of volatility is increasing. Right now the SPY is only .7% but VXX is up 5.8% and VXZ is up 2%. This means the delta (hedge ratio) or the movement in the ETNs relative to the move in the underlying is increasing as well. Of course this parallels the moves in the VIX
VIX Posts Biggest Two-Day Increase Since May as S&P 500 Tumbles
Illinois Non Taxable Munis
Is the state of Illinois close to junky ? The Wsj reports the taxable bond issue to go to market today will yiled around 2.4% above treasuries for the 2019 maturity , Based on etfs (hyg,ief,lqd) inv grade corps are +1.16% junk + 3.20%. Investor demand seems strong particularly from abroad...maybe they know something. And as I have noted it is possible to lock in the spread without locking in to current long term rtes. Purchasing a bear etn for the appropriate maturity/duration hedges out the interest rate risk and locks in the spreads.
Dumb Money chasing Performance ?
Recent data on mutual fund flows for the beginning of the year has shown (surprise) money flowing from bonds into stocks chasing past performance. And in the bond areas the money has flowed into higher risk areas of the credit market including emerging market bonds and high yield bonds. So much for the argument from some observers than investors in 2010 went from stocks to bonds in order to reduce their risk, It seems more likely they were simply chasing performance.
And as for recent flows retail money has clearly been flowing most out of emerging markets. Barron's noted on feb 17:
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