VIX Withers Down Below Technical Support After Huge Job Loss Catalyst
As the saying goes, there’s always a bull market somewhere. The reason why is that capital is neither created nor destroyed by falling or rising asset prices – all that changes is the place where that capital is parked. For example, when equities prices collapse, the price for bonds can rally as capital leaps from the former market and into the latter. Other times, when equity prices are falling off a cliff, capital might flee the equities market and jump over into the commodities market, or perhaps real estate, sending prices for those assets soaring. It's like a big frog made of capital, jumping from one lily pad to the next.
What's been remarkable this year is that the price for almost every asset class in every market on the planet has been falling at the same time. There's no bull market any place this time, and it's like someone has let the water out of the pond. This shouldn’t come as much of a surprise because there’s a lot less credit available these days. Credit, the very stuff by which the price of an asset is driven and denominated. It’s the water in the pond, and now that there’s a lot less of it, all the lily pads are sinking into the mud, and all the capital frogs are dying.
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