Okay, folks, we are in the midst of a pretty serious stock market breakdown.
Yes, we’ve had bigger down days, but this is on the heels of some of the most concerted behind-the-scenes and out-in-the-open official intervention that we’ve ever seen.
This means the market has lost confidence, not just in the US authorities’ ability to manage the crisis, but more generally in central banking.
Just as ominously, for those who’ve been watching, the USD has strengthened hugely against the Yen over the past few days, indicating that one more shoe plunking to the ground is the rapid unwinding of a massive Yen carry trade. Note that the Yen is close to breaking the 100:1 barrier.
I am going to reiterate my call that the chance of a general market failure, culminating in a general banking holiday, is now at its highest level ever.
More to come…
by former_user