|
|
AN ILLUSION OF SIMPLICITY, AN ENTANGLEMENT OF COMPLEXITY
A white paper by Dr. George Sokoloff and Ted Parkhill
Lately, there has been talk of so-called "elevated" markets.
Equity markets, real estate markets and bond markets
are indeed reaching new highs regularly. But how long
will this last? Can it last indefinitely? Or as is often said,
"It's different this time,"; is it really? We posit that it is not
different this time. In fact, there are very real parallels
that should concern every investor. What could catalyze
the next global financial crisis ("GFC II")? We suggest that
it won't be a "Flash Crash." Instead it will be a flash flood
that could be caused by very real systemic risk. In other
words, the system will flush itself of the market detritus
accumulated over the last 8-9 years. We are calling it The
Straight Flush Crash. This paper will explain why.
For anyone that has studied the sequence of events leading
up to the Global Financial Crisis ("GFC") of 2008-09,
it would not be hard to put together the shape of the new
crisis. The first GFC began with the New Century Financial
bankruptcy that caused the first market hiccup on
February 27, 2007 (when the VIX indicator jumped a record
60% in one day) and escalated to Bear Stearns, to Lehman
Brothers, then to the whole GFC debacle. In our opinion,
the market blip on August 24, 2015 (affectionately known
as the ETF Flash Crash) was the first indication of the
shape of things to come. During each crisis...................... To view our full article Click here
|
|
RSS
