A day of reprieve today.
Serious damage has been done and, aside today, a period of consolidation will be needed.
Moreover it is an harbinger of things to come.
In the last year Wall Street introduced (a bit like 2006) a lot of new and strange product.
Gamma trades (bet on low volatility), all sort of ETF (robotic trading, factor, ultrashort, leveraged and so on), algorithmic trading, volatility selling).
Always in bull market they find a way to make more money and the regulator just watch.
This products significantly will produce more swings and we will need to get used to it.
And yes…soon or later something will go really wrong. Well at least the Fed now knows it.
investorpolitico 