Moronic Monday - October 05, 2026 - Your Weekly Questions Thread

[u/AutoModerator]

This is your safe place for questions on financial careers, homework problems and finance in general. No question in the finance domain is unwelcome.

Replies are expected to be constructive and civil.

Any questions about your personal finances belong in r/PersonalFinance, and career-seekers are encouraged to also visit r/FinancialCareers.

[u/TheWastefulDeparture]

Still trying to wrap my head around how gamma risk flips for deep OTM options near expiry, the math feels like a different language some days

[u/MadCharter]

I’ve been putting together an Economic Risk & Financial Stability Watch because I wanted something that looks at the economy without trying to sell me stocks, mortgages, gold, crypto, or somebody’s latest financial miracle.

The idea is fairly simple: watch a group of indicators that normally don’t get discussed together and see whether they begin pointing in the same direction.

It tracks things such as Canadian recession risk, U.S. and Canadian bond yields, mortgage and GIC rates, private credit, government debt, oil and inflation, Canada-U.S. trade, financial-market liquidity and Canadian real estate.

I’m particularly interested in correlation. One warning sign may mean very little. If employment, GDP, credit conditions, bond yields, mortgages, trade and housing all begin deteriorating together, that is considerably more interesting.

I use a simple Normal / Elevated / Warning / Severe system and include a 12-month Canadian recession probability. The intention isn’t to predict the apocalypse every Tuesday afternoon. It’s to distinguish ordinary economic noise from developments that might actually matter.

I update it as conditions change and try to include contrary evidence when the numbers don’t support the gloomy interpretation.

For anyone interested, the latest report and the methodology behind it are on the Analysis page of my website:

stephengkirk.com → Analysis

It’s an experiment in looking at economic risk without having anything to sell you.

[u/LPNTed]

Is there a simple explanation as to why the stock market (and thus the economy as well) isn't absolutely cratering "the way it should" right about a year ago through now?

[u/MadCharter → u/LPNTed]

The economy and stock market seem to be defying normal boom-and-bust cycles, but the cycle probably hasn’t disappeared. It’s being stretched out.

Since 2008, governments and central banks have become much more aggressive about preventing financial collapses. Add huge government deficits, lingering liquidity, inflation-driven nominal growth, strong corporate profits, and an increasingly concentrated stock market dominated by a handful of giant companies.

Instead of one major correction, we’ve also been getting rolling corrections: regional banks, commercial real estate, small caps, manufacturing, consumer credit and other sectors take turns getting hit while the major indexes keep climbing.

So the real danger probably isn’t simply “stocks are too high.”

The danger comes when earnings, employment, credit, private lending, government financing, consumer spending and normally stable investments begin deteriorating at the same time.

That synchronization is what turns scattered problems into a genuine recession or financial crisis.

The market hasn’t defeated gravity. We’ve just become remarkably good at postponing the moment when gravity gets its vote.

[u/LPNTed → u/MadCharter]

Thank you very much!