The global financial disturbance of 2007 and 2008

Broad events In the graph above, the blue line is the VIX, the implied volatility of the S&P 500 as read off the options market. It is a good measure of US and global economic uncertainty. The horizonal yellow line is the long-run average value of VIX. It helps us place recent values of VIX in perspective. The black line is the S&P 500. However, instead of the conventional index levels, I use the US Major Currencies Index (produced by the US Federal Reserve) to adjust for the decline of