Hello, Welcome back to the 55th edition of Allison’s Ode to the Second Moment, a newsletter that got a fat tail this summer. Have We Traded Volatility for Tail Risk? I don’t know about you, but I spent August editing my book and thinking about the state of the business cycle. The economy has been growing at a slow and steady pace since 2009, as has the stock market. The bull market has been remarkable for low volatility and fairly low annual growth. It makes me wonder if long, lackluster, low volatility periods of growth are the new normal. It makes sense that they might be. Monetary policy is on its game in terms of managing inflation expectations. More globalization and better financial tools mean more diversification, which normally reduces volatility.