The evidence continues to mount that the current market environment is encouraging risk taking on a record level (cov-lite debt issuance, equity margin debt, overall portfolio leverage levels, etc.) which has led to frothy valuations in multiple asset classes:

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Cov-Lite

Record cov-lite issuance makes the 'salad days' of 2007 look tame

NYSE_margin_August

 Record levels of equity margin debt as investors chase the rally

Over_underweights

Aggressive sector overweighting with the highest-beta sectors overweighted while the lowest-beta sectors are underweighted

Even veteran bond managers such as Bill Gross of PIMCO are moving up the risk spectrum and utilizing leverage in order to juice returns in the current low-yield environment: "Bill Gross Used $45 Billion Derivatives to Lift Fund Gain"And private equity firms are unloading assets into the current sellers' market:

PE

PE_IPOs

And 2014 is virtually certain to be another record year for initial public offerings.....

IPOsWith the world's largest IPO, Alibaba, hitting the market on the same day as Apple's new iPhone 6 launch Friday is set to be an important day for markets (Friday also happens to be 'quadruple witching' day). The stage is set for one of those "bell ringing" moments for the market.....