Stock Markets shaped like the coast of England...

...are becoming more frequent. Volatility is increasing and some analysts say it is now the new standard. The New York Times collects a number of figures: 

Since the start of this century, The Times found, price fluctuations of 4 percent or more during intraday sessions have occurred nearly six times more than they did on average in the four decades leading up to 2000.

As for closing prices, the more-frequent jumps could also be clearly spotted. Thirty percent of trading days since the start of 2010 were up or down more than 1 percent at the time of the closing bell. That’s far more than the 20 percent of such jumps in the 1990s. 

“The last few years have been the most volatile for all of recorded history,” said Andrew Lo, professor of finance at the M.I.T. Sloan School of Management. For evidence, he says that 10 of the biggest 20 daily upswings and 11 of the largest 20 daily drops since the beginning of 1980 to the end of last month have occurred in just the last three years.

This has consequences - undermining confidence, detering long-term investments, feedback loop problems where volatility feeds upon itself. But volatility is also a source of profit for the high-frequency trading industry and the segments of financial sectors that welcome it because it has the appropriate technology and ressources to deal with it. How this new standard advantages some and prejudice other is still unknown. Also, if one accepts that violent market swings are the norms, one has to admit that Mandelbrot was right and that the Bell's curve is not the appropriate description of how stock markets behave. Finally, one cannot help but note the shrewd comment of Prof James J. Angel, professor of finance at Georgetown University: "When there is uncertainty in the world, there is uncertainty in the market ". It is quite ironic because Financial Economics built itself distinguishing between uncertainty and risk and taking into account the later only. It tried dangerously to isolate itself from this "uncertainty in the world" (because it cannot really be measured) that it cannot grasp with it now.