Donald MacKenzie

Donald MacKenzie writes: Certainly, some people made a lot of money betting against mortgage-backed securities. But their activities didn’t stop the bubble, and in some ways inadvertently exacerbated it. They couldn’t borrow those securities to short sell them in the way described in my article. As described in Michael Lewis’s The Big Short, they had to take out what are called ‘credit default...

I wrote about VIX, the Wall Street ‘fear gauge’, in the LRB of 25 January, addressing in particular the question of what was maintaining the VIX at such a low level. A week after publication, the processes I discussed began to go into reverse. Then, on 5 and 6 February, the reversal became dramatic and the VIX rose to well over 30 (it had been under 10 as I was finishing the article), accompanied...