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* FIEND'S SUPERBEAR MARKET
REPORT *
* May 13,
2025 *
* *
* e-mail:
fiendbear@fiendbear.com
*
* web
address: http://www.fiendbear.com *
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Fiend Commentary
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Complacency
Returns: The VIX Whispers While Markets Roar
You
wouldn’t know it from the headlines, but the trade war isn’t over. Not even
close. And yet, here we are — markets celebrating like it is. The VIX has
fallen to 18.53, the lowest level in over a month, even as U.S. Treasury yields
rise, the economy sputters, and oil creeps back above $62 a barrel. Risk is
rising, but the market doesn’t seem to care.
The short-lived 90-day tariff pause between the U.S. and China has triggered a
euphoric response from equities. Wall Street has latched onto the idea that this
is a turning point — that lower tariffs signal not only peace but permanence.
But this is exactly the kind of short-sighted optimism that has preceded almost
every major market misstep in recent memory.
If tariffs were good policy, then stocks should’ve
fallen on their suspension. Instead, the rally implies traders never truly
believed in tariffs as an economic strategy to begin with. Worse, it suggests
they now believe this temporary pause could morph into permanent de-escalation
— effectively stripping the U.S. of leverage in any future negotiations.
Meanwhile, the bond market isn’t buying it. Yields are rising in spite of falling inflation and reduced import costs.
That’s not a bullish signal — it’s a warning. It reflects fears of
uncontrollable debt issuance, geopolitical uncertainty, and a shrinking buyer
pool for long-term U.S. debt.
Yet the VIX continues to drop. The so-called 'fear gauge' has gone from panic
in early April to complacency in mid-May. It’s behaving like everything is
fixed — but the foundation is still cracked.
We’ve seen this movie before. Perfection gets priced in, fear evaporates, and
just when everyone’s moved to one side of the boat, the wave hits.