Market Crash

The Humungous Depression

We are not in a recession. We are in a depression, and have been since the turn of the century.

"We Are Unsure Whether To Wear A Helmet Or A Diaper" - Merger Arb Funds Crushed

While company officers - who have given up on major stock upside as a result of busted M&A - and investment bankers are lamenting the bursting of the M&A bubble, some of the biggest losers are on the buyside, where merger arbs have seen billions in paper profits turn into billions in paper losses in moments upon the announcement of deal termination. Indeed, broken deals have whipsawed hedge funds that focus on merger arbitrage. As the NYT poetically puts it, according to one "arb" the current mood of the industry: "Every day is like showing up unsure of whether to wear a helmet or a diaper."

Steve H. Hanke's picture

Ever since the U.S. Federal Reserve (Fed) began to consider raising the federal funds rate, which it eventually did in December 2015, a cottage industry has grown up around taper talk. Will the Fed raise rates, or won’t it? Each time a consensus congeals around the answer to that question, all the world’s markets either soar or dive.

Chaos & Volatility Is On The Rise

Things are getting ‘weird’ out there if you’re trying to be polite, and downright 'chaotic' if you're being blunt. Everywhere we look, we see signs that the systems that support us are breaking down.

One Chart Says It All

This chart says it all: real income is declining and the bottom 95% are poorer. No wonder people are socking away what they can and tightening their spending: they have no other choice, even as the Federal Reserve strip-mines their savings.

China Threatens Its Economists And Analysts To Only Write Bullish Reports, Or Else

While in the US and the rest of the free world, anyone who holds a less than bullish view of things is simply marginalized as a conspiracy theorist, ridiculed by establishment economists and pundits, is the recipient of mainstream media hit pieces, or denigrated by the president as "peddling fiction", China has decided to take a more blunt approach: "securities regulators, media censors and other government officials have issued verbal warnings to commentators whose public remarks on the economy are out of step with the government’s upbeat statements."

"A 2015-like Market Crash In Chinese Commodities Is Inevitable"

Is Everyone Wrong On The "Causation" Of The Commodity Bubble? While it appeared 'retail' was responsible for the panic-buying chaotic volume surge in Chinese commodities, Axiom Capital Management's Gordon L Johnson points out that in fact... China Bank Special Interest Vehicles' "Bold" Commodity Speculation Is The Real Budding Black Swan

Why Is JPM's "Quant Guru" Suddenly Worried About The "Endgame"

"Increased government spending, financed by central banks could indeed create inflation, but will further elevate the problem of debt viability. If investors lose confidence that the debt can ever be repaid, they will reduce their holdings, increasing the cost to governments or inviting more central bank buying. This can eventually result in the devaluation of all currencies against real assets such as gold, high inflation or even outright defaults (as was the case in Greece). If such a trend develops in one of the large economies, it could have far-reaching consequences."