Options tied to gains in the benchmark gauge for American stock volatility reached the highest prices in six years last week, reflecting bets that the calm prevailing in equities for the last year won’t last.
Municipal bankruptcies in California, where three cities have filed for protection from creditors since June, are a spreading “disease” in the state, said David Kotok, chief investment officer at Cumberland Advisors.
Puerto Rico, whose debt was cut to junk by two ratings companies last week, pays a penalty when it borrows because of the uncertainty created by U.S. scrutiny over whether an excise tax on non-residents qualifies for a federal credit, according to Cumberland Advisors Inc.
Los Gatos, California, where Apple Inc. co-founder Steve Wozniak can be seen riding the sidewalks on his Segway, isn’t often mentioned in the same breath as Fresno, an agricultural hub seeking to stave off insolvency.
David Kotok, chief investment officer at Cumberland Advisors Inc., says he is "fully invested in U.S. markets." Kotok talks with Bloomberg's Ken Prewitt and Tom Keene on Bloomberg Radio's "Bloomberg Surveillance."