When markets crash they tend to crash fast after seeming to be in a slow motion. I wonder what the kickoff will be?
If it’s this week it will go something like this:
1. People realize that they aren’t getting their tax returns because of the shutdown and it has an outsized effect because consumer savings rates are low. Market wobbles.
2. Treasury issues short term debt at high yields and long term debt at low yield yields Thursday, market crumbles Friday.
3. Fed meets next week to discuss the debt window and if they need to slow down QT or go back to QE. They don’t know. Market goes volatile.
4. Government shutdown ends at first sending stocks up. Then key economic data releases showing consumer spending is going to be weak because real wages were down.
Anyways, it’s more likely we’d have to see a couple of blue chips go bankrupt first like a big state utility company or a classic old American tech company.
For awhile now I've been preaching my prediction which is:
When (not if) the market crashes again, it will happen MUCH faster than previous crashes due to increasing automated trading and general speed of news. Expect a flash crash within minutes instead of days. And, if there is a halt in trading it will crash even faster.
If it’s this week it will go something like this:
1. People realize that they aren’t getting their tax returns because of the shutdown and it has an outsized effect because consumer savings rates are low. Market wobbles.
2. Treasury issues short term debt at high yields and long term debt at low yield yields Thursday, market crumbles Friday.
3. Fed meets next week to discuss the debt window and if they need to slow down QT or go back to QE. They don’t know. Market goes volatile.
4. Government shutdown ends at first sending stocks up. Then key economic data releases showing consumer spending is going to be weak because real wages were down.
Anyways, it’s more likely we’d have to see a couple of blue chips go bankrupt first like a big state utility company or a classic old American tech company.