Increasingly Numb

• Posted by Robert Sinn
• on June 5th, 2012

“We are in a situation of total emergency, the worst crisis we have ever lived through” former Spanish Prime Minister Felipe Gonzalez

“I don’t know if we are on the edge of a cliff, but we are in a very, very difficult position. The future of the euro is going to play out in the next few weeks in Spain and Italy.” Spanish Finance Minister Luis de Guindos

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Where is the $VIX?

It seems that the current China/eurozone/US recession induced market correction has been one of the most well telegraphed and least unexpected corrections I have ever witnessed. Perhaps the widely anticipated nature of the current correction helps to explain the relatively muted reaction in the VIX – or maybe the options market is pricing in a global central bank floor underneath equity markets. Whatever the reason, it is worth noting that the VIX appears to be increasingly numb to a fairly substantial macro wall of worry

 

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