Back in November, before the full extent of the Valeant fraud would start to become apparent as it has in recent weeks sending the stock to 6 year lows (there is much more to come now that the company is now engaged in a mudslinging campaign with its former CFO and its formerly biggest Wall Street backer, Goldman Sachs), we explained the Valeant phenomenon simply by writing that "in today’s broken markets and corrupt regime of central bank driven crony capitalism bubbles inflate in individual securities, as well as in broad sectors (e.g. biotech, social media and junk bonds) and the market as a whole, until they reach egregious, self-correcting extremes. Then they violently implode, creating immense waves of collateral damage in the process."
Since then Valeant violently imploded.
In retrospect, we were right, and today none other than Bill Gross confirms that what happened at Valeant is merely a preview of what is going on with the entire global monetary phenomenon. To wit:
Gross: Valeant biz model was based on leverage and fincl. engineering. At the extreme it mirrors global monetary policy and their economies.— Janus Capital (@JanusCapital) March 22, 2016
Valeant imploded and it will ultimately end up insolvent and in liquidation. The global economies, supported with ever more tangible desperation by their central banks, will not avoid the same fate.