The VIX hit 14.1. Stock traders decided this means they like Kevin Warsh now. These two facts have nothing to do with each other, but that's never stopped anyone before.
The Cboe Volatility Index measures 30-day options on the S&P 500. It dropped to its lowest point of the year. Warsh is a former Federal Reserve governor who might chair the Fed. One is a mathematical calculation. The other is a person. Connecting them requires the kind of brain damage you only get from reading financial news for a living.
Volatility dropped because volatility dropped. Markets got less volatile. The VIX fell. This is like saying your thermometer likes your new curtains because the temperature dropped. The thermometer doesn't care. The thermometer has no opinions. The thermometer certainly doesn't have views on monetary policy appointments.
But traders need a story. They need to explain why numbers moved. So they picked Warsh. Could've been anyone. Could've been a sandwich. Could've been the ghost of William Jennings Bryan. Warsh happened to be in the news, so Warsh gets credit for calm markets, as if he personally called each option trader and whispered soothing words about price stability.
The VIX at 14.1 means investors are pricing in almost no drama. They're comfortable. They're relaxed. They're buying calls and selling puts like it's 2017 and nothing bad will ever happen again. This is the same crowd that panic-sold at VIX 40 three months ago, but sure, they've definitely figured it out this time.
Warsh hasn't done anything yet. He might not even get the job. But the VIX is low, so traders are warm to him, which is the financial journalism equivalent of saying your dog is a meteorologist because he barked before it rained.
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