Credit Disagrees With U.S. Stocks (Again): Who’s Right?

U.S. equities have been seen as something of a sacred cow over the past several years, weathering any and all storms and digesting periodic shocks with relative alacrity. That is until February 5, when the rebalance risk inherent in levered and inverse VIX ETPs was finally realized, leading directly to the largest VIX spike in history and catalyzing a veritable cascade of forced de-risking as CTAs and risk parity lightened up equity exposure to the tune of some $200-300 billion. There is a sen