The clip above is from a provocative interview with Jon Stewart of The Daily Show (tip of the hat to Jack Stevison.) Note that at the end of the interview Greenspan has some very compelling things to say about subjects related to fear and, by implication, the VIX. Maybe Alan needs to spend more time on this blog...
"The problem is: periodically we all go a little bit euphoric, until we get to the point where we are effectively assuming with confidence that everything is terrific, there will be no problems, nothing [bad] will ever happen. And then it dawns on us: no!
...I've been dealing with these big mathematical models of forecasting the economy and I'm looking at what's been going on the past few weeks and I say, you know, if I could figure out a way to determine whether or not people are more fearful or changing to euphoric and have a third way to figure out which of the two things are working, I don't need any of this other stuff. I could forecast the economy better than any way I know. The trouble is that we can't figure that out.
...I've been in the forecasting business for 50 years...I'm no better than I ever was and nobody else is. Forecasting 50 years ago is as good or as bad as it is today and the reason is that human nature has never changed. We can't improve ourselves."