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Newsletter: From Fragile to Turbulent - But "Minsky Moment" risks have passed
The shift in the Market Uncertainty State Indicator (MUSI) from Fragile to Turbulent requires commentary this month. First, what the change in market state means, and second, why it happened.
Fragile vs. Turbulent
A shock can break a Fragile market. A Turbulent market will bend chaotically, but not break.
Both
Flash Report: Market Uncertainty State Moves from Fragile to Turbulent (Corrected)
Flash Report: Market Uncertainty State Moves from Fragile to Turbulent
Blog: Hard, Soft or Aborted Landing?
Aeronautical terms have been popular form of market jargon for a long time. These days, of course, it’s what type of recession we’re going to have: a “hard” landing (which is a nice way of saying, a crash) or a “soft” landing, where we glide in without disturbing
Blog: Is the VIX Broken? Nope.
Recently I’ve read some market commentators declare the VIX1 “broken" as a fear index because it’s not always down when the market is up and up when the market is down. I’ve heard this story several times over the years, but the only time the VIX
Blog: Bond Yields and Markets Before the "Before-Time"
A phrase from Star Trek: The Original Show became popular during the 2020 pandemic, referring to the time before COVID-19 as the “before-time.” The phrase was lifted from a 1966 episode entitled “Miri.” The story took place on a planet of children where the adults had been killed off during
Blog: Groundhog Day (not the movie!) for the market
Aspiring market pundit, Punxsutawney Phil, saw his shadow on Thursday, forecasting 6 more weeks of winter for the northeastern US, and a potential bear market. While there is no evidence that Phil, or any other groundhog has forecasting power, the media continue to follow the ritual as a matter of
Newsletter: The Released Balloon Theory of Inflation
A released balloon can be deflating but still go up and down in an unpredictable way before collapsing. Inflation is like that too. It can ease in the near term while going up in the long term before it reaches its final level. So be careful extrapolating recent trends.
Blog: Is "risk appetite" growing, or are investors just feeling lucky?
Implied volatility measures have been falling pretty dramatically. As usual the press is saying “risk appetite” is growing. But what does that mean? It sounds like the media is saying investor's desire to take risk is higher today. Which must mean they're feeling luckier today than