The case for a pending financial collapse is well grounded. Financial crises occur on a regular basis including 1987, 1994, 1998, 2000, 2007-08. That averages out to about once every five years for the past thirty years. There has not been a financial crisis for ten years so the world is overdue. It’s also the
On any given day, it’s easy to find a stock bull and a stock bear ready to fight it out with conflicting advice and opinions. The bull points to stronger growth in the U.S. in 2018, stimulus from tax cuts, tight labor markets, low interest rates and high consumer confidence as evidence that all
The U.S.-China trade war has been out of the headlines lately as the two sides pursue private negotiations against a March 1 deadline for new higher U.S. tariffs on Chinese goods. That’s about to change, according to this article. The stock market rally last Friday was widely attributed to dovish talk from Fed Chair Jay
Fed Chair Jay Powell just sent the most powerful signal from the Fed since March 2015. The Fed has taken a March 2019 rate hike off the table until further notice. At a forum in Atlanta last Friday, reported in this article, Powell used the word “patient” to describe the Fed’s approach to the next
When financial panics begin, they play out in similar ways. First, one asset class has a surprise drop. The leveraged investors sell the sinking asset, but soon the asset is unwanted by anyone. Margin calls roll in. Investors then sell good assets to raise cash to meet the margin calls. This spreads the panic
Regular readers are familiar with my “ice-nine” thesis on how the next financial crisis will play out. Ice-nine is a phrase invented by Kurt Vonnegut Jr. in his novel Cat’s Cradle. In the novel, ice-nine is a doomsday device involving a molecule that freezes any water it comes in contact with and converts that water
