The crash is going to be worse than what’s happened in the past, simply because debt levels are higher. From Sven Henrich at northmantrader.com:
They’re right. It IS different this time. It’s worse. Much, much worse. What is? Everything. In terms of preparedness for the next recession that is. Debt is higher than ever, be it corporate debt, government debt, central banks balance sheets, available ammunition to deal with a new recession, wealth inequality, the social divisions and political extremes, and now trillion dollar deficits, everything points to a much more fragile system. Oh yes on paper low rates keep it all afloat, but the context is as ugly as it gets.
Here we are, the great collapse unfolding in front of us. With yesterday’s Fed meeting we witnessed a confirmed breakdown in central bank narratives over last the year, an utter capitulation to market realities that are forcing central banks to commence the new easing cycle. No, this is not a temporary little rate cut event they are promising, it’s a new cycle. The Fed yesterday offered a 3 rate cut outlook, precisely what markets had been pricing in. The Fed bowing before market demands. Give us drugs. Yes, whatever you want, you got it.
The response: An overnight collapse in yields to now below 2% on the 10 year, the lowest reading since the US election in 2016.
” … an utter capitulation to market realities that are forcing central banks to commence the new easing cycle.”
And I thought that the “market realities” = the “political reality” of Trump pressuring Powell.
And now the Fed is the Market.
https://markstcyr.com/2019/06/20/and-there-it-is/