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Feb. 6, 2017, 9:55 a.m. EST

Tom Brady aside, there are ‘profound’ risks that signal an explosion of volatility ahead

‘We are facing the massive unilateral complete global financial default that only the tin foil hat crowd has envisioned’

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By Shawn Langlois, MarketWatch


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If the market hits the skids this year, there will be just one man to blame. No, not that guy — plenty on him in bit — rather, it will be thanks to Tom Brady. With an assist from the Falcons coaching staff, the Super Bowl Indicator is flashing a warning sign for stocks in the coming year.

Just waiting for Skip Bayless to consult the crystal ball he used last night to confirm whether we should be worried about our investments:

Perhaps Michael Wilbon will help out:

Or, heck, let’s just run a poll:

Yes, Tom Brady finally catches a break in life.

Anyway, silly sports signals, election tea leaves and no-strawberry-eating superhumans aside, if you’re searching for reasons to wrap yourself in worry, you won’t have to look very far. Go ahead and add our call of the day to that list.

The VIX /zigman2/quotes/210598281/delayed VIX -3.78% , known as the “fear gauge,” has the potential to topple the 1,000-point level, according to the EconMatters blog . For some perspective: The index, which shows the market’s expectation of 30-day volatility, has never even topped 100. At this point, it’s hovering around 11, a lowly reading that suggest traders don’t expect much in the way of wild swings in the next month.

But that won’t last, if this stark warning is any indication.

“Financial markets are broken. Any sense of properly pricing risk has been completely removed from the market, as such, risk has been distorted to such a degree, the future ramifications for financial markets, and financial market participants is profound,” the EconMatters blogger wrote.

The writer added we can expect the VIX to pass the lofty levels of the 2008 financial crisis and break above 100, maybe 200 and perhaps even into four digits.

“The central banks have no clue to what degree they have distorted financial asset prices,” EconMatters said. “We are facing the massive unilateral complete global financial default that only the tin foil hat crowd has envisioned.”

For what it’s worth (not much), the Super Bowl indicator is on track so far.

Key market gauges

The Dow /zigman2/quotes/210598065/realtime DJIA +0.02%  and S&P 500 /zigman2/quotes/210599714/realtime SPX -0.17%  are down a bit at the start. It’s in line with the kind of range-bound trading we saw much of last week when the S&P moved less than 0.1% in either direction for three straight days — something that hadn’t happened since way back in 2014.

Meanwhile, gold  and silver  are moving higher, as is crude oil . Asia markets /zigman2/quotes/211618636/realtime XX:ADOW -0.94%  closed mostly higher, while Europe /zigman2/quotes/210599654/delayed XX:SXXP -0.15%  drifted into the red.

Read Market Snapshot for more

/zigman2/quotes/210598281/delayed
US : Cboe Indices
19.09
-0.75 -3.78%
Volume: 0.00
Dec. 2, 2022 2:14p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
34,401.62
+6.61 +0.02%
Volume: 0.00
Dec. 2, 2022 3:29p
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/zigman2/quotes/210599714/realtime
US : S&P US
4,069.58
-6.99 -0.17%
Volume: 0.00
Dec. 2, 2022 3:29p
loading...
/zigman2/quotes/211618636/realtime
XX : Dow Jones Indices
3,267.26
-31.15 -0.94%
Volume: 0.00
Dec. 2, 2022 12:44p
loading...
/zigman2/quotes/210599654/delayed
XX : STOXX
443.29
-0.67 -0.15%
Volume: 0.00
Dec. 2, 2022 5:50p
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