Realized vs. Implied Volatility Divergence

In this conversation, Pascal Huegli and Ben Kizemchuk discuss the current state of equity markets, focusing on volatility, the implications of the VIX, and the behavior of 'garbage stocks.' They explore the financial plumbing of the U.S. system, including liquidity issues and the impact of treasury issuance. The discussion also touches on inflation trends, defensive investment strategies, and the evolution of market valuation towards a flow-based model. Huegli emphasizes the importance of understanding these dynamics in the context of potential market declines and the future of economic policy.

Chapters:

00:00 Introduction and Context
01:50 Why bearish in the short-term
06:08 Understanding Volatility and the VIX
13:32 Garbage Stocks and Shorts
19:19 IWM Breakout or Deleveraging
25:07 Financial System Plumbing and Tax Drain
26:07 Treasury Bill Issuance and TGA Dynamics
28:47 Reserves and Banking System Stress
31:08 NFDI Lending and Market Implications
33:52 Standing Repo Facility and Bank Liquidity
36:44 Why is Bitcoin up
41:31 How to manage risk right now
44:28 Inflation is a real risk
47:43 Liquidity Drawdowns under 4Fs Framework
53:44 The Evolution of Price and Valuation
57:34 From Narratives to Flows in Valuation
01:01:44 The Fragility of Flow-Based Systems
01:04:01 Investment Strategies in a Flow-Dominated Market
01:07:28 GDP Targeting with Reserves
01:13:34 Stablecoins as tokenized Reserves

Check out our sponsors👇
https://mining.blockwaresolutions.com/lnms
Blockware is a Mining-as-a-Service platform that makes it easy for anyone to start mining Bitcoin straight from home! Get $100 off your first miner with discount code LNMS🔥

https://bitbox.swiss/lnms
BitBox is the best in class hardware wallet, I personally trust and use! Get 5% off your first order with discount code LNMS🔥

Follow Ben Kizemchuk:
https://x.com/BenKizemchuk

Follow me👇
Twitter - https://x.com/pahueg
Nostr - npub1qhx7lnggpv64f0wt5xyjj7h90qh5ewu35pspr66sj8alc4gvcfjqqn04l8

Get the latest in finance, crypto, and Bitcoin. Our newsletter provides clear, concise and actionable insights. Don't miss out—check out our Newsletter and subscribe today! 🔥⬇️
https://substack.com/@lessnoisemoresignal

Bitcoin Book 👇
Order from Europe: https://www.amazon.de/dp/1967693013
Global: https://www.amazon.com/-/de/dp/B0F9W8Y283

Thank you for subscribing to our channel! We’re excited to have you with us!

#equitymarkets, #volatility, #VIX, #deleveraging, #liquidity, #inflation, #stablecoins, #marketdynamics, #investmentstrategies, #financialplumbing