Evercore ISI's Debusschere Says Dow's Plunge Had Hints of 'Flash Crash'

The video discusses the impact of algorithm-driven trading on market volatility, highlighting that market-making depth is at an all-time low. It explores the potential for flash crashes due to macroeconomic stresses and the challenges in regulating such events. The discussion extends to volatility across various asset classes, including equities, currencies, and treasuries. The speaker emphasizes the need for recalibration in market strategies and questions whether the current volatility is a temporary phenomenon or a new norm.

What is one of the main reasons for increased market volatility according to the first section?

• Stable inflation rates

• Increased market-making depth

• Decreased economic growth

• Algorithm-driven trading

What is a challenge mentioned in regulating the market structure to prevent flash crashes?

• Lack of technology

• Complexity of the system

• Insufficient data

• High transaction costs

What is a potential outcome of a permanently higher volatility regime?

• Stable economic growth

• Decreased market depth

• Normalization of valuations across asset classes

• Increased inflation rates

Which strategy is suggested to adapt to a higher volatility environment?

• Shorting volatility constantly

• Avoiding market participation

• Hedging when volatility is low

• Selling volatility daily

What is a key question to consider regarding market volatility?

• Are inflation rates decreasing?

• Is this a temporary or permanent shift in volatility?

• Is economic growth slowing down?

• Has the market depth increased?