Rick Santelli explains the dangerous contagion created by global markets teetering at record price levels on record leverage and margin debt. In these conditions, a dollar of selling pressure in one market can force 5, 10, 20, 50 dollars of selling in other asset markets half way around the world. When correlations go to one under stress, traditional notions of portfolio diversification prove ineffective in protecting capital. Here is a direct video link.
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