Leading with Leverage

"These here are the historical volatility index limits which, of course, our entire trading model relies on pretty fucking heavily. Well, now we're so levered up that once it gets outside of these limits, it gets ugly in a hurry."
--Will Emerson (Margin Call)

What Liz Sonders doesn't note is that the last time the Fins peaked at this level was just prior to the credit crisis.

Financial Crisis is “over” ... yesterday, the S&P 500 Financial sector finally surpassed its 2007 peak, closing at a new all-time high @SPGlobal pic.twitter.com/jRyhXbtjdL

— Liz Ann Sonders (@LizAnnSonders) December 13, 2019

Yes, banks leading the way to higher prices seems naturally bullish. But when the system is being levered up on artificial stimulus, it is also intuitive that the financial sector is likely to lead all the way up until the trap door opens.

As in 2007...