Ah, sure... My view is that the behavior of volatility that we observe is a result of leverage. More specifically, it's the accumulation of leverage that matters. This would also explain why this "clustering" is so pervasive.
If one looks at the risk profile of a naked put you will see it is identical to a covered call except you have no need to tie up capital. You even get to hold the cash while you defend it. The real danger is not Vol going higher but price of the underlying going South. The risk there has no limits until the stock goes to zero, just like a covered call.
Most things economists come up with aren't applicable to real markets. That's why they invented the Lucas critique after all, so if their models fail, they can simply say "Oh our models failed? That means the free market is working just like we predicted!"
We discussed earlier. Its not entirely true. First selling a OTM naked put often gets you into a lower cost zone even if assigned shares. Someone spending capital to buy shares and then selling a covered call, either ATM or OTM, is exposed to higher losses if stock goes to zero. Second is dividends. Holding a covered call position often allows the holder to collect dividends (provided there are significant value left in the options it won't be exercised early), whereas a naked put seller does not collect dividends. The price-profit profile is similar in that gains from upside of price is capped and then linear loss profile from downside of price but capped total loss. But they (covered call and selling naked put) don't behave the same.
In essence, what we call the "free" market is not free at all. The big invisible hands are still at work and will make sure that you remain an economic slave for the rest of your life. In fact, by their mere legal existence, these banksters had been so busy (and quietly) debasing the US dollar and other international currencies like the Euro or the British pound, thus reducing the buying power of most citizens around the globe, that most people are not even aware about the root of the problem. By the way, did you know that since its existence, the all mighty US dollar lost more than 97% of its value after the FED ( a private bank controlled by Illuminati interest) came into existence, in 1913? Anyway.
The "free market" is a nonsense utopian dreamworld concept that will never come into existance anywhere anyways. The entire concept is based on a nonsensical rationalist approach rather than an empirical approach, that includes a bunch of high-thinking 'intellectuals', who have never had a laboratory science class, an Anthropology or a single history class in their lives, thinking they have somehow discovered a set of laws that govern all human interactions in all times and in all places, and that their discoveries can be summed up by two intersecting lines on a piece of paper. It's absurdity, and the height of ivory-tower thinking and arrogance. As for the USD losing value, I would tend to disagree, since technically the reference value for a currency is by definition other currencies (not gold or oil). The USD is not depreciating against any other currencies. However there is always a steady inflation in any fiat system, but it has no real effect on purchasing power because workers would demand to be compensated at inflation. The "money illusion" occurs only when inflation rates are very volatile. Imagine for instance pricing your wages in BTC? You'd have to re-negotiate them every day...
Oh, really? If in 1913 I purchased an item for $20, that same item would cost $477.36 in 2014. End of story and case closed.
Again, the reference price for any currency is not "items", gold, oil, gas prices or anything else you can think of. The reference price of a currency, is other currencies, plain and simple. Also in 1913 you would also have a much lower wage.