The Market’s Scariest Warning Sign

A strange moon rises over Wall Street…

The Fed’s about to raise interest rates — for only the third time in 10 years. More seem likely…

A potentially crushing debt ceiling crisis is days away. The president’s a human volcano. Upcoming elections in France and Holland menace the European Union. North Korea’s lighting off rockets…

And yet… and yet… market volatility hovers at record lows.

Odd. But there you are.

The VIX index — Wall Street’s “fear gauge” — nears its lowest point in a decade — 11.6. It peaked at 60 in the teeth of the 2008 crisis. Historically, 20’s about par.

“We haven’t seen levels this low since early 2007,” notes Andy Crowder of Wyatt Investment Research, a slight crack in his voice.

Early 2007 — the still before the whirlwind.

“So profound is the market’s peace that a debate is raging over whether it’s healthy,” says Bloomberg.

Volatility’s so low it’s even got the Fed — the Fed! — arching an eyebrow. Per Bloomberg, some in the ranks have “expressed concern that the low level of implied volatility in equity markets appeared inconsistent with the considerable uncertainty attending the outlook.”

Has the market reached “peak complacency”?

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