From Currency Analyst, Sean Hyman

What Happened:

Isn't the market just as shaky as last year?

Well, not according to the VIX. One way we can measure this is by looking at the ultimate gauge of volatility, the VIX. The volatility index peaked way back in August 2007. See the chart below.

While Volatility Is Still High, It's Much Lower
Than This Time Last Year

Yeah back then, the sub-prime scare was in full swing. Bank stocks were diving extremely hard and mortgage companies were failing right and left.

Then Bear Stearns failed in early 2008 and the Fed had to go in and save what was left so volatility spiked once again. But I couldn't help but notice at that time it was a hair less than last time.

Much more recently we had the IndyMac scare. The FDIC had to come out and make a speech and reassure the U.S. of its deposits, etc. At this time the volatility spiked once again. Yet it was less than before.

What I Say:

So it seems now that the worst is behind us (volatility wise) and that much of the bad news has already been priced into the markets. After all, you have had a lot of banks priced in the teens recently and trading at or even below their book values.

During this time in currency land, money started to come out of the Japanese yen and Swiss franc since the worst of the storm has past and it's now found its way back into the dollar.

What? The dollar? Yes, and that is one of the big reasons why the dollar has consolidated lately and stopped dropping, even though it has several pieces of data stacked against it.