A hedge fund that makes money when markets go crazy has identified the Four Horsemen of the Economic Apocalypse
Investors have fled from risky bets to safe havens, hammering banks' share prices in the process.
But not everyone loses money when turmoil hits. Some, like 36 South, are set up to profit from it.
The London-based hedge fund's Black Swan strategy gained 234% in the chaos following the collapse of Lehman Brothers in 2008.
The fund capitalizes on complacency. It can buy protection against volatility and sudden price moves cheaply, setting what it calls "volatility traps," and then sell it back to the market when there's an inevitable crash.
For them, the current volatility is a symptom of a greater malaise at the heart of the markets. And one that won't be solved by negative interest rates.
Anthony Limbrick, portfolio manager and head of quantitative research at 36 South said: "There is this sense of fear in the markets but maybe also an embedded expectation that if something terrible comes to pass then central banks will step in to steady the markets. But that market complacency can vanish in an instant."
Here's the VVIX volatility index at the moment, also known as the fear index. It's showing levels approaching those of the Eurozone sovereign debt crisis in 2011 and the global financial crisis of 2015:
