The End Of Stimulus? (And The Start Of The Crash?)

The End Of Stimulus? (And The Start Of The Crash?)

Back in January of 2016 we saw what appeared to be, and in my opinion should have been, the end of the Everything Bubble blown by the word’s central banking cartel.

The carnage started in the emerging markets. Highly-leveraged positions and carry trades began to unwind. That’s a fancy way of saying that all the big, sophisticated investors — who were busy borrowing heavily in countries with cheap money (the US, Japan, and Europe) and using that debt to speculate in markets offering higher yields (junk debt, emerging markets, stocks, etc.) — began to reverse their trades.

We are now seeing the same rapidly-deteriorating sequence in the markets today, here in late May 2018. And this time, it doesn’t look like the central banks will be able to ride to the rescue as they have time and again over the past decade.

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