wheee!What Was Your Favorite Moment Of This Week’s 20,000 Point Journey
February 12, 2018 8:04 AM   Subscribe

What Was Your Favorite Moment Of This Week’s 20,000 Point Journey Of The Dow?

Market Volatility Returns With A Bang - What Happened - "As the painful couple of trading days unfolded, market volatility as measured by the (VIX) (VXX) (VIXY) returned with a vengeance. The most visible market victim of this changed market environment was Credit Suisse's (CS) sponsored Short Volatility Exchange Traded Note (XIV). The short volatility trade was a way for investors to pick up a "little extra yield" by holding a very small position in their portfolio on the premise that volatility would remain permanently low into the future. The XIV is now being liquidated, based on a single day trading event. "

Some specifics:
Florida Man Who Raised $100 Million To Short The VIX Likely Returning To Old Job At Target
Low-Vol ETN Dies Of Irony - "As it happens, however, the death of XIV wasn’t just the predictably result of a collapse in the equities market, but a kind of suicide."
Everybody's Doing it: Short Volatility Strategies and Shadow Financial Insurers - "The extraordinary growth of short volatility strategies creates risks that may trigger the next serious market crash. A low yield, low volatility environment has drawn various market participants into essentially similar short volatility-contingent strategies with a common non-linear risk factor. We discuss these strategies, their commonalities, and the generally unrecognized risks that they would pose if everyone unwinds simultaneously."
Seth Golden Doubles Down After XIV Blowup, Bets $600,000 VIX Will Fall
Credit Suisse defends controversial financial product at the center of the market turmoil
Who is to blame for the recent market volatility?

Where Volatility Goes To Die - "There’s a lot to sift through, but the main lesson is this: Be wary of volatility ETPs. Yet investors have already poured another $500 million into the ProShares ETF in the days after the largest ETN keeled over, according to data provider XTF. Why is another mystery."

But enough about VIXens.

Trump’s Past Bad Market Tweets Will Live On Long After The Future Trump Recession Ends
But now, Trump faces a far more daunting task. Before, he only had to convince his base that something which wasn’t “real” before is suddenly “real” because he he’s President. That’s a kind of mindfuck wherein the people that myth is being foisted on are inclined to believe it because they participated in getting him elected. So in a way, by believing he’s the cause of the ongoing rally, they can feel like they too played a part in creating prosperity. That creates a psychological incentive to believe something that isn’t, on the surface, believable.

Now, assuming the stock rout continues, Trump is going to have to take this one step further. Now, he’s going to have to claim that a rally which wasn’t real when Obama was President subsequently became real when Trump was elected, but now that the rally is over, the losses have nothing to do with Trump.

Not even the stupidest Trump voters are going to buy that. Unless of course he can find a scapegoat. And that’s where this gets either funny or dangerous, depending on who the scapegoat ends up being.
Trump’s first stock market tweet in 25 days is actually pretty correct
Behind all this market volatility, there’s another storm brewing

Stock market notches daily gain, but posts largest weekly drop since early 2016

The bottom line on Trump and the economy: We’re not in good hands
A Closer Look at the Wage Growth That Shook Markets
The Real Reason Workers Can’t Get A Raise - "A preemptive war on inflation will tamp down any real wage growth."
The Last Time U.S. Wage Growth Spurred Inflation Was in 1980s
What will result from America’s strangely timed fiscal stimulus? - "The threat of inflation is less worrying than some investors think"

The Stock Market Doesn’t Matter
The dangerousness of Trump’s comments doesn’t lie in getting the size of his tax cuts wrong, nor even in highlighting an up market. It lies in assuming that the market serves as a measure of anything more than corporate America’s bottom line. Nearly every time he boasted about the market’s gains, he conflated it with other news about the economy’s actual performance: jobs, wages, GDP growth. He’s not the only one who makes this mistake. Some economic commentators watch the Dow as if it were a window into an ill-tempered economic god’s mood, taking the highs to show his favor and the lows to show we’ve sinned.

But the stock market doesn’t measure anything of substance. While it can be significant for those who have fortunes tied up in its immediate highs and lows, the rest of us — the vast majority of Americans — could do well to ignore them entirely.
posted by the man of twists and turns (49 comments total) 27 users marked this as a favorite
 
oh, and two more
Paul Campos: THE TROUBLE WITH THE STOCK MARKET
And you don’t have to go discovering Japan to experience the dubious thrill of genuine long-term negative returns on equities. For instance US stock indexes declined, on average, by about 10% in real terms between the mid-1960s and the early 1980s.

Indeed if finance theory agrees on anything, it’s that there’s absolutely no reason why over the next three decades US equity markets couldn’t track what their Japanese counterparts have done over the previous thirty years.
Weekly Sift: Does the Exploding Federal Deficit Matter?- "Republicans claimed that Obama’s deficits were apocalyptic, but trillion-dollar deficits are fine now that Trump is president. What’s the right level of concern?"
posted by the man of twists and turns at 8:39 AM on February 12


I know it smacks of privilege, and is pretty much motivated by hate, but I have been smiling a shark's smile every time I hear that the DOW is down at the end of the day. Mostly because I know that it wounds Trump, and partially because that means that stocks are going on sale. I'm not a fan of the regular Jane's "losing" unrealized gains, but it soothes my soul to hear of corrections.

I also take heart in that the stock market isn't the economy, but Trump does know it. At this point I'm just super petty.
posted by Hermeowne Grangepurr at 8:40 AM on February 12 [7 favorites]


A couple months ago I'd happened to listen to the cable news channels a bit and a couple undercurrents I observed were one, that the money folks were taking bitcoin seriously, not saying buy buy buy but just an awareness that it was complex and would be an element in their lives.

The other not-spoken-out-loud was that the markets were going to go down some time soon, very smart folks making clear observations about the markets and world issues in general but the one thing not one could say directly was that the markets were going to have a downturn. Just could not say it. Could see it in their eyes but they could not say the words. Funny.
posted by sammyo at 8:42 AM on February 12 [3 favorites]


Weekly Sift: Does the Exploding Federal Deficit Matter?- "Republicans claimed that Obama’s deficits were apocalyptic, but trillion-dollar deficits are fine now that Trump is president. What’s the right level of concern?"

If you believe in Keynesian economics (as I do), it depends entirely on the situation. When Obama came to power we had zero fed interest rates, negative real interest rates for government borrowing and an economy that desperately needed the government to kick start demand even if it involved giving people money to dig holes and fill them back in.

The current economy should be able to support high taxes on the overheating corporate sector while keeping low individual taxes for low income brackets. There shouldn't be much of a need for deficits because Wall St is making money hand over fist. Now it's just ham fisted greed.
posted by Talez at 8:52 AM on February 12 [14 favorites]


What Was Your Favorite Moment Of This Week’s 20,000 Point Journey

That moment I had to try to assure my mom that no, she shouldn't pull all of her money out of the market, that no, it probably wasn't going to be another 2008, and that no, she wasn't going to die broke and alone. That moment. Definitely my favorite.
posted by octobersurprise at 8:56 AM on February 12 [18 favorites]


Look, I’m not trying to hedge a complicated position or anything, but after Nov 2016 shorting vol just seemed...insane.

Yes. Insane is the word I was looking for.
posted by schadenfrau at 9:01 AM on February 12 [3 favorites]


I know it smacks of privilege, and is pretty much motivated by hate, but I have been smiling a shark's smile every time I hear that the DOW is down at the end of the day.

Have a retirement fund? Some kind of insurance? This could affect you too in indirect ways, or people you care about. I won't shed a tear for the financial industry which is basically parasiting the economy, but its just not them losing when it happens.
posted by WaterAndPixels at 9:09 AM on February 12 [8 favorites]


Weekly Sift: Does the Exploding Federal Deficit Matter?- "Republicans claimed that Obama’s deficits were apocalyptic, but trillion-dollar deficits are fine now that Trump is president. What’s the right level of concern?"

Hearing statements like that is hilarious to me, because it presumes good faith on the Republican side which is something that it's been unwise to expect from them since at least six administrations ago. Pointing out hypocrisy is fine, but the Republican platform has so so long been just a crumpled up piece of paper with the word HYPOCRISY written on it.

It's simple. Obama is a Democrat, and Trump is a Republican. Caring about deficits is something they do only when the other team is in charge. That is it. That is literally it. It is nothing more than that. It has always been that!
posted by JHarris at 9:09 AM on February 12 [36 favorites]


I enjoyed the part where thousands of commentators tried to find deep truth and meaning in the output of a random number generator.
posted by miyabo at 9:12 AM on February 12 [7 favorites]


I like market corrections. Ignoring all my losses, consider all the new buying power we all now have. It's like the Dow just went to Filine' s Basement!

Please note, Filine's Basement went bankrupt!
posted by Nanukthedog at 9:17 AM on February 12 [1 favorite]


Have a retirement fund? Some kind of insurance?

Nope. Have to admit to taking a certain...not joy, but comfort in the idea that even if I had these things I have so desperately wanted, they'd not be helpful to me anyway, so oh well.
posted by We put our faith in Blast Hardcheese at 9:17 AM on February 12 [4 favorites]


Well, the privilege is that I have still a long time before retirement and can ride out volatility, and cash to dump into index funds when stock prices are on sale. Didn't love the "loss" of thousands of dollars last week, but I'll take the small petty pleasures in life where I can.

Having to talk nervous parents out of cashing out is also something I'm also glad I don't have to do!
posted by Hermeowne Grangepurr at 9:19 AM on February 12 [3 favorites]


*And I realized a typo in my first comment:

I also take heart in that the stock market isn't the economy, but Trump doesn't know it.
Trump doesn't drink and he doesn't know things.
womp womp
posted by Hermeowne Grangepurr at 9:22 AM on February 12 [1 favorite]


I had dinner with a random stranger at a conference early last year at a tiny diner in Philadelphia, and literally while we were eating burgers, he put $600K into XIV (and showed me the trade on his phone). It definitely made an impression because I've never seen anyone do anything that reckless and boastful before. It was an academic CS conference so he's not that rich. At the time I thought it must be all or nearly all of his savings. I wonder where he is now.
posted by miyabo at 9:27 AM on February 12


Can somebody ELI5 all these acronyms that my brain keep wanting to read as Roman numerals?
posted by egypturnash at 9:31 AM on February 12 [2 favorites]


Can somebody ELI5 all these acronyms that my brain keep wanting to read as Roman numerals?

"Workers of the world, unite! You have nothing to lose but your chains!"
posted by entropicamericana at 9:34 AM on February 12 [10 favorites]


I'm not a fan of the regular Jane's "losing" unrealized gains, but it soothes my soul to hear of corrections

What's your opinion on people like my mother, who have retired recently and need to start realizing those gains to supplement their modest retirement income?
posted by praemunire at 9:35 AM on February 12 [2 favorites]


Yeah. Retiree here. I enjoyed the part where I lost a hypothetical $20,000 from my 401K, which I haven't started taking yet.
posted by Peach at 9:37 AM on February 12 [5 favorites]


> Not even the stupidest Trump voters are going to buy that.

Oh, I think their capacity for Doublethink would be up to the task.
posted by The Card Cheat at 9:37 AM on February 12 [3 favorites]


VIX is a security with a value that depends on volatility in the market: when volatility is high (lots of ups and downs, like last week), VIX is worth more, when volatility is low (like most of 2017), VIX is worth less. XIV is a security that is described as inverse VIX, meaning that it shorts VIX. And it's VIX spelled backwards! Isn't that so clever! So when volatility is low XIV is worth more, and when volatility is high (like last week), XIV crashes. A recent market delusion was that Things Are Different and volatility is a thing of the past, so now everyone who is smart can make a ton of money buying XIV - basically betting that volatility will stay low. The problem with shorting is that it exposes you to unlimited losses if you are wrong. So when XIV crashed so hard last week that it was shut down, some people lost a lot of money.
posted by medusa at 9:37 AM on February 12 [15 favorites]


And I will add I have it in a fund that is designed to react much less to volatility the older I get, so it could be much worse.
posted by Peach at 9:37 AM on February 12 [3 favorites]


Here's a link on what short vol is from Barrons.
posted by medusa at 9:40 AM on February 12


Basically trading on vol is an extremely mathematical and technical thing that might make sense to do if you're an investment banker at a huge hedge fund, but makes absolutely zero sense for non-trained individuals without a huge institutional backstop to go anywhere near. Imagine if Wal-Mart were selling professional-grade brain surgery gear -- a small number of idiots would buy it, try to use it, and fail miserably.
posted by miyabo at 9:43 AM on February 12 [5 favorites]


The XIV/VIX thing is insane. How is this considered not gambling and regulated as such?
posted by WaterAndPixels at 9:44 AM on February 12 [8 favorites]


And for you or your relatives who are upset about the market going down: the drop last week was significant in percentage terms, but it took the S&P 500 back to its levels is November 2017. The market has been up so much in the last couple years and even months! Don't panic, but if this drop is making it so you can't sleep then now is a good time to rethink what you want from your investments. 10% market drops happen, on average, every year or two. If drops of 10% or more are distressing, take some time to think about that.

Also: if you have any investments (401k included), you should have a written Investment Policy Statement (IPS) that covers how you deal with events like these. Learn about IPS on Bogleheads (examples included).
posted by medusa at 9:47 AM on February 12 [5 favorites]


Basically trading on vol is an extremely mathematical and technical thing that might make sense to do if you're an investment banker at a huge hedge fund, but makes absolutely zero sense for non-trained individuals without a huge institutional backstop to go anywhere near. Imagine if Wal-Mart were selling professional-grade brain surgery gear -- a small number of idiots would buy it, try to use it, and fail miserably.

I think it's idiotic for investment bankers as well. Most of the people who blew up last week were pros.

The XIV/VIX thing is insane. How is this considered not gambling and regulated as such?

Because traders get to do whatever the fuck they want.
posted by medusa at 9:48 AM on February 12 [7 favorites]


Above all else, the thing to keep in mind about the market is Talleyrand's observation about the Russian army: 'It's never as good as it looks, and it's never as bad as it looks.'
posted by mojohand at 9:49 AM on February 12 [3 favorites]


The nice thing (in theory) about having VIX around is that us normal people can look at it and try to get a good idea of what volatility will be like in the near future, which could then inform our decisions. But this has not actually worked in practice at all since VIX was invented. VIX tends to skyrocket after a crash, and doesn't provide much early information.
posted by miyabo at 9:54 AM on February 12 [1 favorite]


Coverage is incomplete without Matt Levine at Bloomberg: People Are Worried About The Stock Market (which tackles VIX specifically).

(Levine is an industry shill, but he's also very smart and often quite funny. You can really enjoy reading him if you keep a stern eye on his assumptions.)
posted by praemunire at 9:55 AM on February 12 [5 favorites]


us normal people can look at it and try to get a good idea of what volatility will be like in the near future, which could then inform our decisions

No normal people should even be thinking about VIX. Not having heard of it is actually a good sign that you haven't been enticed into a mode of engagement with the market that is totally inappropriate for ordinary folk.
posted by praemunire at 9:58 AM on February 12 [5 favorites]


Thank you for the explanation of VIX and XIV, Medusa!

As Peach noted, it makes sense to put your money in a fund that prioritizes stability over growth the nearer to retirement you get. Vanguard has funds that do that automatically, named Target Retirement XXXX, where XXXX is the year you expect to retire.

The fund for folks retiring in 2025 dropped 6% the last couple of weeks, while the fund for people retiring in 2050 dropped 9%. This is as expected, as the latter group will have more time to make up the loss. It makes sense for them to be in higher-risk stocks that tend to grow more over time.
posted by Triplanetary at 10:02 AM on February 12


Levine is an industry shill, but he's also very smart and often quite funny. You can really enjoy reading him if you keep a stern eye on his assumptions


I did enjoy reading that, thank you.
posted by the man of twists and turns at 10:21 AM on February 12 [1 favorite]


I'm still waiting to find out how all this market madness is the black president's fault. Because you know the orange president is going to go there.
posted by Ber at 10:47 AM on February 12 [1 favorite]


Let's be really specific about what VIX is:

Options makers charge some premium on options. Under the assumption that they know what they're doing / are profitable on average, one can back out an implied distribution of strike prices (the price of the instrument underlying the option on the future expiration date, which determines whether the options maker gets to keep the premium).

The VIX is specifically some multiple of the standard deviation of the implied distribution on S&P 500 options.

The reason that it tends to lag rather than lead volatility is that options makers are more like bookies than analysts - prices are mostly set based on demand and order flow, not research.
posted by PMdixon at 11:00 AM on February 12 [7 favorites]


My favorite part was when Trump literally accused the Dow Jones index of trying to make him look bad.

Yep. Fucking hilarious.
posted by TheWhiteSkull at 11:19 AM on February 12 [7 favorites]


And for you or your relatives who are upset about the market going down: the drop last week was significant in percentage terms, but it took the S&P 500 back to its levels is November 2017. The market has been up so much in the last couple years and even months! Don't panic, but if this drop is making it so you can't sleep then now is a good time to rethink what you want from your investments.

Guys, you can repeat these platitudes all you want, but the fact is that people in their early retirement, especially those with relatively modest holdings, are very vulnerable to market swings. In many cases, even if they otherwise have the liquid assets to wait out a swing or two (many do not), they are required to take distributions from their tax-advantaged accounts. Additionally, given the ever-increasing length of retirement, they can't just get out of equities at the same time they leave their last job; they need their assets to last twenty years or more. So, even assuming maximum sophistication relative to the size of their portfolio, they are likely to get squeezed, as they can't simply minimize risk but are required to sell some of their holdings (and are likely to need to sell even more, as a practical matter).

Many many people do not have maximum sophistication relative to the size of their portfolios.

(I'm trying to find the paper that projects the ultimate difference between people who retired shortly before and shortly after the financial crisis to show what the long-term effect of having to exit equities with, say, a 10% drop in portfolio was, but IIRC it assumed immediate annuitization of assets so it's not a perfect model.)
posted by praemunire at 11:42 AM on February 12 [4 favorites]


People are required to take RMD from retirement accounts, but they aren't required to keep 100% of the account in the stock market. I'd hope that they would doing dollar cost averaging over the course of the year to move money out of stocks and into cash in preparation to take the RMD in Dec. For the people who can afford it, now probably is a good time to do the sleep test that medusa mentioned because it seems like the ride is only going to get more rocky (or stocks will increase by another 20% this year! who knows! ¯\_(ツ)_/¯)

I'm definitely sympathetic to bumps in the market because the lack of financial education in the is country is criminal, we happen to have 2 sets of newly-retired parents, and we have to take RMD from an account as well. But a correction has been necessary for a while, and for all the youngsters who need to put money in, having a sale back to Nov 2017 is ok. If I can save money now, I will, at least so I can help my folks if they need it down the line.

Plus I totally admit my whole prez-schadenfreude is petty.
posted by Hermeowne Grangepurr at 12:33 PM on February 12 [1 favorite]


People are required to take RMD from retirement accounts, but they aren't required to keep 100% of the account in the stock market.
The theory is that (most of) your money should be in a much more stable place than stocks once you retire. In reality, what does that look like right now? Bonds, Money Markets, etc?
posted by soelo at 12:51 PM on February 12


"XIV" immediately makes me think Louis XIV, which immediately (if incorrectly) makes me think, "Après moi, le deluge".
posted by clawsoon at 2:19 PM on February 12


praemunire: Coverage is incomplete without Matt Levine at Bloomberg: People Are Worried About The Stock Market (which tackles VIX specifically).
German union wins right to 28-hour working week and 4.3% pay rise.
[tries to remember freshman German] Auf Wiedersein! Gotten tag, mein Damnen unt Herren!
posted by clawsoon at 2:50 PM on February 12 [1 favorite]


People are required to take RMD from retirement accounts, but they aren't required to keep 100% of the account in the stock market. I'd hope that they would doing dollar cost averaging over the course of the year to move money out of stocks and into cash in preparation to take the RMD in Dec.

Dollar cost averaging doesn't work. (See also here.) ¯\_(ツ)_/¯

Many, many people do not have optimal asset allocations. I can't tell you the futility of saying "Well if you'd just followed this one strategy, you wouldn't be having this problem!" even if your strategy worked. And it's great that you think you're in a position to support your parents if they need the money, but not everyone is.

Plus I totally admit my whole prez-schadenfreude is petty.

I loathe 45, but I'm not particularly inclined to take pleasure in something that sideswipes a bunch of seniors, as well.
posted by praemunire at 6:39 PM on February 12 [1 favorite]


If a person can't "cheer" a stock market drop—for any of a variety of reasons, whether they be "burn finance down" or "buying opportunity"—a drop that takes the stock market back to levels of four months ago, and literally the first drop in what feels like two years, I don't know what to tell you.

People are sitting on like 40% gains in dividend funds over historically very short periods of time: if you are one of those asset owners and you haven't taken a moment to appreciate that arbitrarily quick increase in your wealth, and haven't reflected that you'll likely be "giving some back" if you don't sell, and haven't reflected that half the country has a net worth of about zero, well I also don't know what to tell you.
posted by sylvanshine at 7:53 PM on February 12 [9 favorites]


Human beings live longer than nearly all other animals, but still have brains that are evolved to make decisions moment to moment, incapable of understanding that their daily peccadilloes are inconsequential in the face of the slow and unrelenting rising tide of age and death. News at eleven.
posted by miyabo at 8:15 PM on February 12 [3 favorites]


If a person can't "cheer" a stock market drop ... I don't know what to tell you.

Could you express your feelings in whoops, shouts, or moans?
posted by octobersurprise at 6:15 AM on February 13




Many many people do not have maximum sophistication relative to the size of their portfolios.

Many, many people do not have optimal asset allocations. I can't tell you the futility of saying "Well if you'd just followed this one strategy, you wouldn't be having this problem!" even if your strategy worked. And it's great that you think you're in a position to support your parents if they need the money, but not everyone is.

That's because it's always a balance between prudence and growth. In Australia we (mostly) solved the problem with everyone over 18 having a superannuation account. It accumulates over their lifetime with compulsory 9.5% employer contributions. Sure, you can tell the super fund to do something stupid but every Australian who don't pick their retirement strategy is put on fairly safe defaults.

People with absolutely no financial literacy can leave it alone and know it's in safe hands. The average fee is somewhere in the region of 0.8% which isn't exactly Vanguard levels but isn't extremely punishing compared to other target date funds and way less than an actively managed mutual fund. Even minimum wage people can accumulate a fair amount over their lifetime and you can withdraw at RMD levels and have a pretty nice retirement. If the super runs low or runs out you get put on the age pension as a backstop.

We can't make perfect decisions for everyone but we can make sure people don't get eaten alive and make not-stupid and prudent decisions by default.
posted by Talez at 8:47 AM on February 14 [3 favorites]


When Everything Is Too Safe, Add Risk, Matt Levine
Here is how I would tell the story:

"In the past, pension funds, endowments and family offices pursued relatively safe investments."
But then those investments got even safer. You could tell because they kept going steadily up without having many big drops. (This is called "low volatility.")
So they had lower expected returns, because you get paid less to invest in very safe assets than you do to invest in relatively safe assets.
So the pension funds had to add more risk to get back to the level of returns -- and also risk! -- that they had before, with their "relatively safe investments."
But "volatility has now returned to markets, with a vengeance," and expected returns have increased (because stocks dropped!), so the funds can get rid of all the weird producty stuff (inverse volatility exchange-traded products, or just selling puts) that they used to add risk, and go back to getting their moderate amount of risk the old-fashioned way -- by buying "relatively safe investments" like stocks and bonds.
In the meantime they lost some money on the producty stuff.
posted by the man of twists and turns at 10:47 AM on February 15


Please consider investing in my brand new derivative investment ETN, VVIIXX, which is designed to closely track volatility in VIX itself... A guaranteed money maker in these times of rapidly changing volatility! Fees just 6%, expected return 0%. Also, now available is the VVVIIIXXX, which tracks volatility in VVIIXX -- make even more money! All offered by Martingale Investments, 1-800-......
posted by miyabo at 12:11 PM on February 18 [1 favorite]


more Matt Levine (thanks again!) VIX, etc. leads to VIX VapoRubOut:
One of the inventors of VIX claims that he doesn’t understand why products such as VIX futures or ETPs that have long or short volatility exposures exist. Really? They exist because they facilitate the transfer of risk from those who bear it at a higher cost to those who bear it at a lower cost. Absent these markets, the short volatility exposures wouldn’t go away: those with such natural exposures would continue to bear it, and would periodically incur large losses. Those losses would not be as obvious as when volatility products are traded, but they would actually be more costly. The pain that volatility short sellers incurred earlier this month might be bad, but it was less than the pain that would have existed if they weren’t there to absorb that risk.

One interesting question is whether technical factors actually exacerbated the size of the volatility spike.
and Levine's own explainer: Inverse Volatility Products Almost Worked
Specifically the VIX (the CBOE Volatility Index) went up by 116 percent in one day. The people who had bet that volatility would go down lost almost all of their money. That is altogether fitting and proper. When you bet that a thing will happen, and the incredibly extreme opposite of that thing happens, then you should lose your money. You can complain, but we don't have to listen to you.
More interesting to me is why volatility spiked. I have a pet theory of my own [essentially, the cumulative effect of traders reacting to businesses reaction to the Trump Tax Cuts (as well as trader reaction to popular reaction to business reaction to popular reaction to ..., well, you get it), exacerbated by leverage and automatic orders] but I'm probably wildly off base.
posted by the man of twists and turns at 8:18 AM on February 26


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