Goldman Sees ‘Financial Fragility’ Rising in Markets
- Early-February VIX spike might be a symptom of a larger issue
- There are reasons to believe ‘liquidity is the new leverage’
LGIM's Roe Will 'Continue to Dance' in Equities
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Markets are becoming their own worst enemies, according to Goldman Sachs Group Inc.
The stock-market rout in early February that caused a spike in the Cboe Volatility Index is a symptom of growing “financial fragility,” or big swings in prices caused by breakdowns in markets themselves as opposed to changes in fundamentals, an economist at the bank wrote Monday in a note to clients. To make matters worse, Goldman says there’s reason to be concerned about liquidity drying up during periods when markets are distressed.