I am in the process of finishing up my presentation of the IFTA conference in Kuala Lumpur in October. My topic is a bit of an exploration of volatility and how it is incredibly poorly understood by most. Whilst in the throws of banging together charts I generated the one below of the S&P/ASX 200 which looks at the 15 day historical volatility of the market over the past year. Intriguingly whilst our current crop of retarded politician were behaving like the narcissistic somewhat sociopathetic children they are volatility actually went down. This present a wider issue than just the narrow concept of volatility, it speaks to the markets lack of interest in most things outside of the psychology of the individuals who make up the market. This is also includes the notion of the economy since there is always this confusion particularity by those of a fundamental bent that the economy and the market are the same thing. They are not – they never have been and they never will be and the claim that they are demonstrates a vast lack of understanding as to how market works.
