Global Financial Stress Index Spikes Most Since 2011 US Downgrade

Did central banks just lose control of the world... again?

For the first time in four months, BofAML's Global Financial Market Stress index has turned positive - signalling more market stress than normal.

As the spat between North Korea and the U.S. worsened, a measure of cross-asset risk, hedging demand and investor flows awakened from its torpor (after spending 78 straight days below zero - with stress below normal).

The problem the world faces is... did the world's central bank money-printing safety net just lose its plunge protection power?

For context, this is the biggest spike in the Global Financial Stress Index since the US ratings downgrade in August 2011 - and a bigger shock than the August 2015 China devaluation...

Sunday night futures should be fun: potential war with North Korea, potential war with Venezuela, trade war with China, and civil war looming at home.

Comments

lester1 Sun, 08/13/2017 - 12:40 Permalink

No worries. The unaudited Federal Reserve's PPT will be buying stocks like crazy on Monday to keep this VIX under wraps. Just like they did August 24, 2015 by reversing a -500 point drop in the DOW in just 15 minutes. Anyone else remember that? I honesrly don't give a shit about the stock market. It's crazy inflated. I bought more physical gold, BTC, and Comstock Mining ticker LODE stock on Friday. So I'm good to go.

lester1 Soul Glow Sun, 08/13/2017 - 12:54 Permalink

We all suspected central banks were covertly buying stocks, but The Federal Reserve's Plunge Protection Team outed themselves on August 24, 2015. No way in hell that recovery was legitimate buying. The DOW magically recovered 500 points on NO NEWS !! Who the hell is powerful enough to move markets like that ? It has to be the NY Federal Reserve and their Plunge Protection Team aka PPT, based at 33 Liberty Street NYC where they run their covert stock buying operations.*Of course since the Fed is above the law and unaudited, they can get away with buying stocks using currency swaps and dark money pools to keep the stock market artificially propped up. I expect much more  crazy  marketmanipulation coming. That's why smart investors are moving to Bitcoin because the Fed hasn't figured out how to manipulate it. Audit the Fed immediately !!!

In reply to by Soul Glow

Soul Glow lester1 Sun, 08/13/2017 - 13:09 Permalink

ANd remember the election?  GOld up how much overnight?  Stocks down how much overnight?  And then out of no where the futures market was calm.  That took tens of billions of dollars at the stroke of a keytboard.  Who would do that?  Who could do that?  It would take all the major banks of the world - GS/JPM, BAC, WFC, MS, et al - or.....or it was the Fed, ECB, SNB, BoJ.  Or it was both, but there was yuge collusion to not have the markets panicked.We are walking down the hallway into hell.  The end of this experiment will be fire and brimstone.  I do not pretend to know if the dollar will go up or if it will burn - I presume the latter.  I do not pretend to know if all assets will go to zero or if they will hyperiflate to nothing.  But I do stack silver because either way I want access to my assets.

In reply to by lester1

Soul Glow Sun, 08/13/2017 - 12:38 Permalink

Welp I guess that means no quantitative tightening........just in case you were wondering there was never going to be any quantitative tightening.

Hkan Sun, 08/13/2017 - 12:42 Permalink

Same speed it goes out of control it jumps back. Never ending...signs...and predictions....still waiting to see real action.

Trader Maximus Sun, 08/13/2017 - 12:51 Permalink

Finally this week could be the week that all the efforts of Zerohedge to talk down the markets for many years may begin to work. TOo bad all the suckers have been short while the Dow tripled. LOL   Thanks to Shepwave for giving us quality precise analysis.  Big difference.  ROFLMAO

Soul Glow Trader Maximus Sun, 08/13/2017 - 13:04 Permalink

WHo are you writing to?  Yourself?  The down voters?  Just yelling at windmills?  You made a statement that ZH is traying to "talk down the markets".  WHich market?  Stocks?  ZH is full aware of the presistant inflation in the markets which are causing the housing boom (bubble) and the equity boom (bubble).  ZH may give an arb trade here or there but never has it once written "sell stocks now".  Sure they say what Gundlach is doing, or what Marc Faber is doing, but shit they even post what Gartman is doing.  And in these cases not every investor is bearish.Now if you are speaking at the ZH audience, well sure, some people have been short, some have bought gold, and those peoples investments have diminished in price.  But first no gold bull really cares if the price goes down short term because he can just buy more, and as for yelling at short sellers how do you know they are on this thread?I down junked you not because I disagree with your view on the market - I have been day trading stocks since the election knowing full well Wall Street had a boner for a Trump Presidency - but because I think your post is foolish.  COming on a thread and yelling at no one in particular looks idiotic.  If you want to fight than pick someone and square up.  This is FIght Club, not a Royal Rumble.

In reply to by Trader Maximus

Soul Glow Trader Maximus Sun, 08/13/2017 - 12:56 Permalink

Effort of ZH to talk down the market?  Haven't you noticed ZH publishes op-eds by many different investors?  This site does not give investing advise, it publishes articles by people who give investing advise.  Like what Gundlach is doing, or shit even what Gartman is doing.  Then ZH looks at what the said and what happened retroactively - in Gartman's case it's never pretty.So for you to think ZH is giving daily advise on how to trade the market is wrong.  It shows trends, speaks about how gold is an asset, shows BTC charts, but this is a news site, not a site that gives investing advise.  If it was you would be paying for it like a newsletter.

In reply to by Trader Maximus

TeethVillage88s Sun, 08/13/2017 - 14:31 Permalink

Wait, sub-Prime was Froze, US Downgraded, China Devalued?

Are you sure. Cause I know Santander has a shit load of US Sub-prime Autos, no reason to think any of this other stuff like a freeze on subprime house took place.

- pssst, I heard there was nearly $700 B in systemically important US Derivatives still outstanding globally
- Also... Death to the Ayatollah