Nice detailed post. I don’t know much about the credit market so appreciate your insights there. On the equity side, kinda unbelievable that VIX is as low as it is already. Wonder if folks look back to how quick the last major pullback recovered in 2020 and didn’t want to bid up vol even as equity markets quickly recovered in the second half.
I think there is a major difference between what happened in 2020 and what is happening now. In 2020, the FED was very supportive of the markets with FFR at 0% and financial conditions very loose. There were free money given to people through the Covid relief loans and eventually through the stimulus checks.
We have the opposite environment right now , where the FFR is currently at 4.5% and restrictive policy. I don't think we have grounds for a similar style rally. In fact, we are very far from it.
Nice detailed post. I don’t know much about the credit market so appreciate your insights there. On the equity side, kinda unbelievable that VIX is as low as it is already. Wonder if folks look back to how quick the last major pullback recovered in 2020 and didn’t want to bid up vol even as equity markets quickly recovered in the second half.
I think there is a major difference between what happened in 2020 and what is happening now. In 2020, the FED was very supportive of the markets with FFR at 0% and financial conditions very loose. There were free money given to people through the Covid relief loans and eventually through the stimulus checks.
We have the opposite environment right now , where the FFR is currently at 4.5% and restrictive policy. I don't think we have grounds for a similar style rally. In fact, we are very far from it.
great, thank you!
Thank you, Maverick!