In light of COVID-19 lockdowns from 2020– to 2022, how did a global public health crisis influence trader sentiment about the market?
Anytime a cataclysmic global event occurs, the markets respond . While we all experience the micro shocks of COVID-19, lockdown orders, and complete upheavals of daily life, the macro shocks take shape as hyperobjects, incapable of human apprehension . The collective sentiment of financialization and stock valuations is no exception.
The VIX is a direct product of neoliberalism and its favored spawn, financialization. Conceived by the Chicago Board Options Exchange, it intends to measure the stock market’s volatility based on S&P 500 index options. Calculated in real-time, it is known as a fear index, which serves as a market estimate of future volatility through its derivation of trader-willingness-to-pay for options on the S&P 500 Index [3, 4].
Perhaps one of the most volatile periods in modern human history , 2020–2022, presents a discerning point of reflection. As deaths rose, economic insecurity spread as quickly as the virus. Markets, however, do not sleep. While the fear index may serve as a measure of trader uncertainty, its derivation stems from direct intent to capitalize on that uncertainty: anything can be monetized.
Pandemic Performance 2020–2022 metaphorizes financial markets’ perception of pandemic volatility. Anything can be monetized, even fear and expectations of macroeconomic insecurity, and the work pays homage to both. Through its direct use of Monopoly money (the bills correspond to a player’s starting setup in ‘Cheaters’ edition), the work points to the absurdity of financialization and capitalism’s ability to seek profit from financial derivatives. With every fan’s pulse, bills fly to the top of the sculpture, like moths to a light, further referencing the allure, obsession, and laser-focused self-interest of financial gain.
The work operates using historical VIX data ranging from the date of the first shelter-in-place order in the United States in March of 2020 to the date of the last US state (Hawaii) to raise its mask mandate in March of 2022. The closing data from the VIX is then mapped to the pulse rate of the fan: the lowest closing value corresponds to the lowest operating speed of the fan and vice versa. Every minute, the piece cycles through closing data to visualize and allude to the absurdity of the market and its efforts to financialize even the most intangible concepts, including fear, skepticism, and uncertainty of the market’s very existence. Through a tension between the individual and the institution, the piece further provokes us to consider the absence of macro-control in the face of accelerating financialization.
- Smith Jr, Clifford W. “Market volatility: Causes and consequences.” Cornell L. Rev. 74 (1988): 953.
- Morton, Timothy. Hyperobjects: Philosophy and Ecology After the End of the World. United States: University of Minnesota Press, 2013.
- Whaley, Robert E. “The investor fear gauge.” The Journal of Portfolio Management 26, no. 3 (2000): 12-17.
- Whaley, Robert E. “Understanding the VIX.” The Journal of Portfolio Management 35, no. 3 (2009): 98-105.
- Caggiano, Giovanni, Efrem Castelnuovo, and Richard Kima. “The global effects of Covid-19-induced uncertainty.” Economics Letters 194 (2020): 109392.