One Trader’s Reality Check “If You Think Last Week Was A Disaster, You May Be In The Wrong Line Of Work”

While the moves in equity (VIX) and credit (CDX, ITRX) protection costs last week shocked many out of their recent coma of complacency, former fund manager Richard Breslow warns it was the lack of reaction across markets broadly that investors should be more worried about.
Via Bloomberg,
We really need to stop using the expressions ‘risk-on’ and ‘risk-off.’ Or if that’s too much to ask, how about a short holiday while we collect our wits. We grossly over use them to the point of rendering them meaningless and trivial. And reliance on these crutches is just a way of avoiding thinking about what might actually be going on. The markets’ perception and appetite for risk isn’t something that can be measured on an hour by hour basis. A few random basis points isn’t a measure of anything.
And the reality that markets remain laughably correlated on a short-term basis means they are all just reflecting the same factor signal not giving independent confirmation of where we might be headed.

This post was published at Zero Hedge on Aug 14, 2017.