You’re not alone if you’re completely confused by your financial aid award letter. Colleges don’t make it easy to figure out how much you’ll owe for tuition, but here’s a 5-step guide to make it easier. …read more
Source: You got into college! What will it cost?
By Tyler Durden
The CBOE SKEW Index just closed at its lowest level since October 2014 – but is tail risk in the stock market really that low?
We often stress the importance of taking indicators and data at face value as much as possible, avoiding the temptation to qualify or *asterisk* readings that don’t seem to fit the narrative. That said, it is also important to be familiar enough with an indicator’s behavior to recognize when truly atypical or outlier readings are issued. And speaking of outliers, a good example of such readings occurred last October in the CBOE SKEW Index, and possibly the other day.
As a refresher, SKEW is calculated from S&P 500 out-of-the-money options measuring perceived tail risk, i.e., an outlier event two or more standard deviations below the mean. Essentially, it measures options traders’ perceived risk of a major decline (more at CBOE.com). Typically, the SKEW ranges from 100 to 150. Readings close to 100 indicate that the perceived probability of an outlier return is negligible whereas readings approaching 150 suggest the probability is significant.
On October 12, 2015, the SKEW hit an all-time high reading of 148.92, indicating the highest perceived tail risk in the indicator’s history. The odd thing about the reading was that stocks were a mere 2 weeks into a rally off of the considerable depths of the September lows. Typically, extreme high levels on the SKEW have occurred with the market tight-roping at 52-week highs. This was hardly the case in October and those unusual circumstances caused us to question the normally noteworthy signal.
Today, we find ourselves questioning the reading in the SKEW once again – but from the other side of the spectrum. That is because, despite the ~12% stock market rally over the past 2 months, the CBOE SKEW Index closed at its lowest level (113.8) in a year and a half. This was also just the 18th reading below 114 since 2009.
If we take the reading at face value, it suggests good things to come for stocks over the short to intermediate-term. Consider the returns following the prior 17 SKEW readings below 114 since 2009.
Now these returns were accumulated during an overall extremely bullish environment. Nevertheless, median returns from 1 month to 6 months were far above the norm of the period, with a perfect 17-0 record 6 months out.
So why wouldn’t we take the recent signal at face value? Well, if you are wondering if perceived tail risk can really be at an 18-month low following a monster 2-month rally, you are wondering the right thing. A glance at the chart reveals that most, but not all, of the previous 17 SKEW readings since 2009 occurred near short to intermediate-term lows in the market. The recent reading on April 8 came with the S&P 500 some 12% above its 2-month low.
This does not match …read more
Source: Is Tail Risk Really At An 18-Month Low?
Peabody Energy, the world’s largest private-sector coal producer, filed for bankruptcy on Wednesday in U.S. court.
…read more
Source: Largest U.S. coal company goes bankrupt
By Tyler Durden
Authored by George Soros, originally posted at NYBooks.com,
The asylum policy that emerged from last month’s EU-Turkey negotiations – and that has already resulted in the deportation of hundreds of asylum seekers from Greece to Turkey – has four fundamental flaws.
First, the policy is not truly European; it was negotiated with Turkey and imposed on the EU by German Chancellor Angela Merkel.
Second, it is severely underfunded.
Third, it is not voluntary. It imposes quotas that many member states oppose and requires refugees to take up residence in countries where they don’t want to live, while forcing others who have reached Europe to be sent back.
Finally, it transforms Greece into a de facto holding pen without sufficient facilities for the number of asylum seekers already there.
All these deficiencies can be corrected. The European Commission implicitly acknowledged some of them this week when it announced a new plan to reform Europe’s asylum system. But the Commission’s proposals still rely on compulsory quotas that serve neither refugees nor member states. That will never work.
European Commission Vice President Frans Timmermans is inviting an open debate. Here is my contribution.
A humanitarian catastrophe is in the making in Greece. The asylum seekers are desperate. Legitimate refugees must be offered a reasonable chance to reach their destinations in Europe. It is clear that the EU must undergo a paradigm shift. EU leaders need to embrace the idea that effectively addressing the crisis will require “surge” funding, rather than scraping together insufficient funds year after year. Spending a large amount at the outset would allow the EU to respond more effectively to some of the most dangerous consequences of the refugee crisis—including anti-immigrant sentiment in its member states that has fueled support for authoritarian political parties, and despondency among those seeking refuge in Europe who now find themselves marginalized in Middle East host countries or stuck in transit in Greece.
Most of the building blocks for an effective asylum system are available; they only need to be assembled into a comprehensive and coherent policy. Critically, refugees and the countries that contain them in the Middle East must receive enough financial support to make their lives there viable, allowing them to work and to send their children to school. That would help to keep the inflow of refugees to a level that Europe can absorb. This can be accomplished by establishing a firm and reliable target for the number of refugee arrivals: between 300,000 and 500,000 per year. This number is large enough to give refugees the assurance that many of them can eventually seek refuge in Europe, yet small enough to be accommodated by European governments even in the current unfavorable political climate.
There are established techniques for the voluntary balancing of supply and demand in other fields, such as with matching students to schools and junior doctors to hospitals. In this case, people determined to go to a particular destination would have …read more
Source: George Soros Warns Europe: Absorb 500k Refugees Costing $34Bn, Or Risk "Existential Threat"
Peabody Energy, the world’s largest private-sector coal producer, filed for bankruptcy on Wednesday in U.S. court.
…read more
Source: Peabody Energy files for bankruptcy
Peabody Energy, the world’s largest private-sector coal producer, filed for bankruptcy on Wednesday in U.S. court.
…read more
Source: The largest U.S. coal company just filed for bankruptcy
Ford is taking applications to buy one of 500 Ford GT supercars, but you have to be a good customer.
Recent podcasts: Sanders Demands Clinton Apologize | Guns in America | Radical Islam in America
…read more
Source: You can now apply for a $450,000 Ford GT
“Doctor Strange,” Marvel’s upcoming film starring Benedict Cumberbatch, debuted its first trailer on Jimmy Kimmel Live on Tuesday night. …read more
Source: Marvel’s ‘Doctor Strange’ trailer debuts
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