I am sending two emails from my friend Doug Kass and one from friend Peter Boockvar, both of whom seem to crank out about 5 to 6 emails a day (so these are short). They highlight the extraordinary situation  we find ourselves in today regarding valuation/risk in the market and the increasing complacency we see among investors. Piling into passive investments is just one sign of it. The amazing amount of short VIX plus the incredible exposure to the options markets are, in a word, scary. Even a small move down would force short covering of a number of option periods, which would force the markets down farther, in a pretty ugly spiral. One that could happen all too quickly.
 
Can you say Minsky moment? Minsky warned us that stability breeds instability. Stability breeds complacency, and we human beings have an amazing ability to extrapolate our recent past into the far future. There is no way this ends well.