by Chris Becker
If you’re not familiar with Hyman Minsky’s financial instability hypothesis and his theory of periods of low volatility beget sharp periods of extreme volatility, you’re certainly getting a lesson now in the markets.
The standard gauge of volatility in share markets, since everyone follows the US S&P500 broad index, is the Chicago VIX or volatility index. Sometimes called the fear gauge as it measures the price of protection in S&P500 put options, whose premia jump on heightened fears.