Back Then: “Regular, Frequent Corrections”; Now: “Fewer, Bigger Corrections”

(Before It's News)

zerohedge.com / by Tyler Durden / 06/11/2015 08:08 -0400

With VXX touching a record low yesterday, and the equity volatility having now utterly disconnected from other asset classes…

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… many have suggested that as a result of central bank suppression of risk, vol has become nothing more than a coiled spring with central banks around the global doing everything in their power to keep it in check until occasionally they lose control and vol explodes, leading to sheer market panic.

Two charts from Citi confirm just that. When looking at intraday trading ranges in the Treasury and FX market, Citi has presented what may be the best summary of the bifurcation between the “old” normal-market, and “new” centrally-planned and increasingly illiquid “market” as follows:

• back then: regular, frequent corrections
• now: fewer, bigger corrections

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