"The economic conditions and the market volatility being what they are it could certainly perpetuate a potential stock market crash. It wouldn’t be hard to have a -20% decline from its most recent all-time high. We’re already more than halfway there… The last time the Fed cut interest rates by 50 basis points was in 2008. Not a good reference point. The last time we had a market up day like yesterday (up +4.6%) was back in October of 2008." - Keith McCullough (Hedgeye)
BTW, a 20x p/e on the S&P would bring us to ~2670 -- a 22% drop needed to get us in the neighborhood of historic price/earnings norms....
Well, at least tail hedging is a good idea...I think meanwhile everybody and his grandmother is hedging. From what I hear in London, New York and Tokyo, derivatives desk are very happy about the additional revenue stream....Capital Markets teams are looking for bonus pools to increase 20-30%.....