During the discussion Lee Robinson said a lack of liquidity in markets heightened volatility risks.
“You have a depth problem,” he said adding that since 2015 many market-makers won’t even quote a price for certain off-the-rung bonds outside of sovereigns – which he was able to trade throughout the 2008-09 crisis.
Robinson conceded he was perplexed as to why volatility, measured by the VIX Index, had almost fallen to levels seen before February’s vol spike.
“Rates are higher again, but the FANG stocks (Facebook, Amazon, Netflix and Google (now Alphabet, Inc.) keep going higher – there are a number of people who sell puts on Apple, Facebook and Netflix,” he said.
“It feels a bit like 1999-2000 again, when people think these things are bulletproof and can’t go wrong. Until they do go wrong.”