Loading ...“Market adjustments to date have occurred without significant stress. However, the risk of a sharp and disorderly reversal remains given the compressed credit and liquidity risk premia. As a result, market participants need to be mindful of the risks of diminished market liquidity, asset price discontinuities and contagion across asset markets.”
Over a 3-week span in 2008, investors lost 29% of their capital and 44% over the entire 3-month period. This is what happens during a margin liquidation event. It is fast, furious and without remorse.
Currently, with complacency and optimism near record levels, no one sees a severe market retracement as a possibility. But maybe that should be warning enough.
Where the majority of mainstream punditry gets it wrong, in my opinion, is they keep saying we “can’t have another ‘great financial crisis’ again” because things are different.
That’s true.
NO market “mean reverting” event has EVER been based on the same issues that caused the previous event.
The next event won’t be the same as any past event either.
Only the outcomes remain the same.
The “perfect storm” is coming.
The Perfect Storm (Of The Coming Market Crisis]-by Lance Roberts