The Expected Financial Crash Is Finally Here
Let’s be sure we all understand this; we need a major correction to the historic nonsense caused by the Federal Reserve. The Fed is not your friend, and was never intended to be your friend.
For those who are prepared, the coming storm will be either a non-event or an opportunity to grow assets.
In writing for Naked Capitalism, Yves Smith has written the following
For months, I have been confident that Europe would suffer a financial crisis and a depression, as in a real economy catastrophe accompanied by a market crash. It might not be as severe and lasting as 1929, but the breadth would mean there would not be 1987 quick bounceback nor a 2008 derivatives crisis concentrated at the heart of the banking system. Even though that looked like financial near-death experience, the same factors that made it more acute in many respects also made it easier for the officialdom to identify and shore up the key institutions that took hits below the water line.
The short version of what follows is things are looking even worse now, and on multiple fronts. And unlike 2007-2008, where the officialdom actually was monitoring the US (and other markets) housing bubble and derivatives implosion and engaging in (not adequate) responses, here top financial and monetary authorities are missing in action as far as these obvious risks are concerned.
Needless to say, the Fed raising interest rates (which Bernanke recognized as necessary in 2014 to tame bubbly asset prices but then lost his nerve) does nothing to get more chips from China or magically cure Covid-afflicted staffers so they can show up at work. But it will whack all sorts of speculators and financial firms who have wrong-footed their interest rate positions.
Nouriel Roubini says a debt crisis is already here and a hard landing before year end is now the baseline scenario - Yahoo Finance
“There are signs that a debt crisis has already started taking shape, and a hard landing of the economy before the end of the year is now the baseline scenario”.
"Everyone now recognizes that these persistent negative supply shocks have contributed to inflation, and the European Central Bank, the Bank of England, and the US Federal Reserve have begun to acknowledge that a soft landing will be exceedingly difficult to pull off," Roubini warned.
Fed Chairman Powell himself has grown bearish, switching to talk of a "softish landing" with "some pain." And, the U.S. has never achieved a soft landing with over 5% inflation and sub-5% unemployment since World War II, Roubini pointed, calling the hopes for a mild recession "delusional."
The stagflationary-debt crisis Roubini predicts could lead stocks to plunge 40%.
