Source: Bloomberg

VIX traded today at 10.98, a hair’s breadth away from its 5-year low of 10.38. What makes the market so unflappable? Wasn’t Donald Trump supposed to be a high risk proposition, threatening trade war, vast new debt issuance, a war with Congress, and maybe even civil disturbance?  The answer is that the Obama Administration was risky: It put all of the economy’s eggs into the basket of a handful of big winners while the grass roots of the economy dried up. The surge in small business confidence and the boost to employment in the past two months suggested that a far more diverse set of growth impulses are in play now. It helps, of course, that the chill wind of deflation has died down, and that most sectors of the world economy are growing.