Everyone can see that most risk markets are on fire today. The only question is how long it will take before the structure burns to the ground once more? Some are content (or willfully blind) playing Russian roulette, staying inside until the roof implodes; others feel safer waiting outside. Either way, it is a very uneasy time for thinking people. As for how long prices can burn out of control…one guess is as uncertain as the next.
DoubleLine Capital’s Jeff Gundlach says “Everything begins and ends with quantitative easing”. Here is a direct link.
But to think that central banks now have some control over the raging fire they have fanned, is dangerously naive and ignores 100 years of market history where vicious loss cycles have been a recurring theme notwithstanding an interventionist Federal Reserve since 1913.
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