Low yields and low volatility a growing bubble

Selling volatility to generate yield is behind an artificial calm bolstered by a lack of ‘Fed fear'

Former US Federal Reserve chairman Alan Greenspan, with his lock-step 25 basis point lowering of interest rates, effectively removed risk from the financing equation, thereby increasing the risk in the rest of the world. It was not only possible, but actually quite simple, to predict US short-term rates with laser-sharp precision. The resulting complacency was clearly one of the causes of the global financial crisis, which can be described as the hunt for, and subsequent creation of, novel ways