VIX (August 27, 2015)
Even though I do not own any stocks or bonds, I follow the stockmarkets of this world with utmost care. Lately, I check the key indices on the World Wide Web at least once a day, but my visits become more frequent when the markets are in turmoil. The last few days have been much fun in this regard on account of the economic troubles in China. Ever since the last Monday, dubbed Black Monday by the panicked Chinese authorities, the stockmarkets across the globe have been all over the place. When the going gets tough, the best index to watch is the Chicago Board Options Exchange’s Volatility Index, or CBOE VIX for short, which is also known as the Wall Street fear gauge (“Fear Gauge Highest Since Eurozone Panic,” October 14, 2014). Based on the movement of the Standard & Poor 500 index, it offers a viable proxy of market volatility across the board. In short, it is an economic seismograph of sorts. And it got going this week, which has been real fun for me. For all those who expect capitalism to implode sooner or later, VIX is a useful guide to the mother of all earthquakes that will finish it off at long last. Both the number and intensity of earthquakes leading up to it will keep growing in the meanwhile. Behold, loads of fun right ahead!