High Profits, Hibernating Fear

Earlier this week, I talked a bit about the "too low" VIX. It's a familiar discussion. At regular intervals over the past year, market participants have expressed varying degrees of incredulity at a "fear gauge" that refused to telegraph any fear. Ostensibly, that was odd given that 2022 was a scary year in many respects. But it was that very fear, along with a monetary policy regime shift which disincentivized leveraged long positions in financial assets, which prompted investors to trim thei