Submitted by Tyler Durden on 12/09/2011 - 12:03 Exchange Traded Fund Implied Correlation Volatility
By now, most sane market observers and participants understand that perhaps, just perhaps, everything we believed about neoclassical economics is not without fault. In fact it is possible that the entire macro-economic safety net of Keynesian policy has come into question. One look at the chart below of the changes in US financial stock prices should be enough to show that when S&P downgraded the mighty USA's credit rating, they proved the impossible is possible. The market is now entirely paranoid. Investors have fled the market in droves, as we have discussed endlessly. The banks themselves seem to question their own existence given the plunge in liquidity, and the huge rise in volatility and correlation appear to suggest the market is indeed terrified of its own shadow.
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http://www.zerohedge.com/news/two-charts-showing-how-sp-downgrade-us-broke-market
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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