BofA: It Feels Just Like Before LTCM And The 1998 Asia Crisis…”ultimately central banks will panic”
by Tyler Durden
ZeroHedge.com
Fri, 06/29/2018
In recent weeks, Bank of America’s strategists have turned decidedly gloomy on the market and the economy, warning on one hand that Europe simply can not be allowed to enter a recession as some €800BN in BBB-rated debt risks becoming a “falling angel” and flooding the junk bond market, while at the same time also warning that the global liquidity ushered in by QE has already turned negative.
Now, in the latest “scare piece” by the bank’s Chief Investment Strategist, Michael Hartnett – who correctly predicted the February market tumble to the dot – puts together all the recent events that have troubled markets, namely: Fed tightening, US decoupling, flattening yield curve, collapsing EM, outperforming levered quant funds, and says that these are “all echoes of 20 years ago.”
He is, of course, referring to the 1998 Asia/LTCM crisis, which he defines as a perfect example late-cycle global credit event inducing deleveraging/crash. Here, according to Martin, is how it unfolded:
The Rest…HERE
