This tag covers episodes of stress, extreme volatility and breakdowns of confidence in markets. Unlike systemic risk, which denotes a structural fragility, financial instability describes an observable state of tension. It analyses triggers, contagion mechanisms and the responses of authorities to crises.
Since November 2024, the average VIX stands at 15.1 over eighteen months, 4.4 points below its 1990-2025 average. This durable compression recalls 2017 and 2019 — levels that preceded Volmageddon and the COVID crash — but the macro composition underlying…
Since 1990, the VIX has crossed 30 twenty-four times, 50 eight times, and 80 three times. Each spike documents a specific market dislocation; none repeats identically. TL;DR The 2008 crisis remains the VIX's absolute record at 89.53 intraday, yet post-spike…
The VIX curve articulates the spot index and nine CFE VIX futures expirations. Its shape — contango or backwardation — provides a regime signal distinct from the spot level and historically more robust for identifying acute stress phases. TL;DR The…
The VIX is calculated from a basket of SPX options through a variance swap formula published by the CBOE in 2003. The precise mechanics — inverse-square weighting of strikes, truncation, 30-day interpolation — explain why the VIX behaves the way…
The VIX aggregates premiums paid on S&P 500 options and projects expected volatility over the next thirty days. Reducing it to a fear index obscures the three components — sentiment, skew, market-maker liquidity — that make it useful as a…
NFCI spans 55 years of weekly data since 1971. It is one of the rare U.S. financial indicators reaching back through every major shock since Bretton Woods, allowing each crisis to be measured in the same statistical unit. TL;DR Spanning…
Three indicators recur in every conversation about U.S. financial stress — NFCI, VIX, HY OAS — and they do not measure the same thing. Reading their divergences is more informative than choosing the best of the three. TL;DR Each of…
“NFCI above 0.5 means stress signal”: the rule has circulated in strategist notes for a decade. The Chicago Fed never decreed it — it emerged empirically, and its conditions of validity deserve explicit framing. TL;DR Every NBER recession since 1971…
HY OAS and VIX showed a high rolling correlation — between 0.7 and 0.85 depending on the window — over 2003-2022. Since late 2023, that correlation has collapsed. Two competing interpretations coexist; no publicly available data lets us arbitrate between…
Since the beginning of December 2026, volatility has remained elevated across equity and bond markets, after a year marked by periods of calm followed by violent swings. Between shifts in rate expectations, persistent geopolitical tensions, and rapid sector rotations around…
