As the VIX got pounded back into the sub-teens today, it occurred to me to compare the present activity to the period preceding the financial crisis. What I found was interesting. The chart below (click it for a much bigger version) shows 2003-2007 on the top and recent history on the bottom. You may notice a lot of similarities between the top and bottom, and I’ve drawn a red line at the top showing the equivalent of “right now”.

Below I’ve marked the same point back in the spring 2007.

I am not suggesting that we’re on the cusp of a VIX headed into the triple digits (the darlings at the federal level have learned their lesson). I am saying, though, that glancing at a VIX of 12, lighting up a joint, and relaxing in this environment of peace and prosperity would be ill-advised. The foolishness of what’s going on right now will be revealed in due course.