Before going off rambling I wanted to preface with a little twitter depression. I set out not to post "trade journals," just tweeting entry/exits or making articles just about that. I want to delve into the qualitative discussion on why short VIX permeates everything and all its related metaphors. I had a moment of weakness the other day and tweeted an svxy trade, mainly out of frustration on the uvxy spread/fills, but anyway I did it, I slipped up. This spun off into a dozen replies about strategy, brokers, portfolio margin, and more, whereas I think I've maybe gotten a like once in response to dozens of conceptual articles and Janet posts.
I know people don't care but its just crazy seeing it in real time with metrics, such as views and responses to an article mentioning $gdxj $tlt vs general Fed discussion. Anyway the point is industries like advertising work, even though it seems crazy that they just hashtag movies and go hard at the absolute lowest common denominator. I'll do my best on avoiding that path. I take pride in posting Janet pics and instantly losing followers. Just like in video games if you are running into enemies, that means you are going the right way.
Now some rambling, continuing on the paradox of thrift/broad economy and our short VIX position. In my youth I was consumed with the concept of waste. Government spending, smaller business inefficiency, why do we have more military spending than everyone combined, etc.
I was only seeing the one side of the transaction, the spending/debit. When you back up and look at the whole ecosystem there is an equal and opposite credit/income for all that waste. Thus my brilliant metaphor is to not look at insane budgets as waste but as compost. That spending fuels businesses selling goods and services, employing people who then buy other things. Thats the whole economy!
What matters is the velocity of money and the fact that the whole system keeps trudging on. There is a chance that the whole thing stumbles and disintegrates and that is long VIX, the counterparty. As long as the money velocity keeps going and everyone wakes up tomorrow to get checks to do the same stuff, that is our VIX futures contraction playing out- future fear is overstated.