After a relatively calm and stable three months, the last three days have seen Bank of America Merrill Lynch’s Global Financial Stress Index soar by the most since the middle of the European crisis in August 2011.
The index, that tracks cross-market risk, hedging demand and investor flows has surged more than 90 percent in just three days…
The last time the GFSI was rising at such a pace was August 2011, when this happened…
In August, European Commission President Jose Manuel Barroso warns that the sovereign debt crisis is spreading beyond the periphery of the eurozone.
The yields on government bonds from Spain and Italy rise sharply – and Germany’s falls to record lows – as investors demand huge returns to borrow.
This level of stress is higher than the Aug 2015 China crisis. It sems for now that more than a few are banking on ‘protection’ saving them…
We just gently remind them what happened in August when ETF liquidity collapsed…
VIX doesn’t hedge that!
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