Ten years of unprecedented monetary intervention by the world’s central banks has produced an ‘Everything Bubble’ in which assets of all sorts, in markets all over the world, have inflated—many to a truly alarming extent. Some are already deflating, producing anti- bubbles of panic selling. Our new series ’Accidents Waiting to Happen’ will document these events as we move into the final phase of the ‘Everything Bubble’.
Predicting the 'Unpredictable'- we did not need to predict the Coronavirus to predict the meltdown.
Accidents Waiting to Happen- Value at Risk 'Exceptions'. -11 May 2020
We do not need further proof that VaR trading limits cannot be taken seriously.
Accidents Waiting to Happen- The US Equity Market UPDATE. -31 March 2020. As the true scale of the Corona Virus disaster became apparent, equity markets in the U.S. suffered severe 20-day drawdowns, just as we warned was likely, long before the Virus news hit the markets.
Accidents Waiting to Happen- The US Equity Market. -13 January 2020. Three very different gauges of U.S. equities, the S&P 500, Nasdaq 100 and Russell 2000 Indices have all been rising rapidly since the Fed-fuelled melt-up began last October. During 2018’s year-end collapse they all suffered their worst 20-day losses in several years, and now their 20-day returns distributions are all indicating an uncomfortably high probability of exceeding those losses. If that happens the expected drawdowns would be at a level last seen in October 2008.