I am hearing a lot of chatter about the VIX being high and that fear is in the air.
I don’t think the VIX is accounting for either ‘The VIC’ or the ‘VIG’ for that matter.
VIC is the idiot homebuyer that is just as responsible for this mess as the imbicile lenders. VIC is about to destroy property values in your neighborhood when he ‘hits the bid’ on his home next year after the ‘reset’ on his ARM. VIC is an idiot for the most part. VIC therefore does not know fear and is hard to account for in ‘The VIX’.
You see ‘The VIG’ that the banks think they will receive from the interest ‘reset’ may just be too much for ‘The VIC’ and the ‘VIX’ may just be useless when ‘VIC’s’ shit hits the fans.
Disclosure- Friends with many ‘VICS’s.
When you make it an incredible incentive for people to borrow money (ultra low interest rates with ARMS & monthly pay options) then what do you expect ?
People usually succumb to whatever incentive is laid before them.
We’re now dealing with the inevitable aftermath of a low interest rate orgy thanks to Greenspan and friends.
Is anyone truly surprised ?