Fool me once, shame on you. Fool me twice…It looks like volatility has left the building (upon first glance). Yesterday’s dramatic sell-off hardly put a dent in the volatility index as the index spiked at the open and then quickly scooted back to levels seen just two trading sessions prior.

The market reaction to today’s credit rating downgrade is rather humorous.  In case you haven’t noticed Treasuries and the US Dollar are both rallying.  If this isn’t a sure sign [ … ]

Here’s a fancy bit of datamining for you. Credit Suisse pinpoints three of the most important correlations currently occurring in the markets and the economy:

We had quite a debate about the usefulness of the Case/Shiller PE ratio a few weeks ago (see here for a good summary).  Some enlightening data comes from Anwiti Bahugana, [ … ]

Bloombergs chart of the day shows the relationship between QE2’s past performance and stock and bond prices. If past is prologue we should expect bonds to begin to rally and stocks to lose some of their allure:

Although I’ve had trouble finding any definitive connections between QE2 and real economic growth, there is one certain connection – QE2 is having an enormous impact on investor psychology.