06-18-2021, 05:26 PM
** 18-Jun-2021 World View: Is this the big one?
This morning, Federal Reserve official James Bullard said that
inflation may be higher than expected, and the Fed may have to raise
interest rates at the end of 2022.
Investors freaked out.
Dow 30 33,290.08 -533.37(-1.58%)
S&P 500 4,166.45 -55.41(-1.31%)
Nasdaq 14,030.38 -130.97(-0.92%)
One analyst said that leverage has been a "moon shot" in the last six
months, meaning that investors have been borrowing heavily to invest
in stocks. This is what triggers a crash. If stock prices start
falling, and people have to start selling stocks heavily to meet
margin calls, then there's a vicious cycle that causes stock prices to
spiral down. That's exactly what happened in 1929.
I vaguely recall that in 2007-2008, the Fed would hold an emergency
session over the weekend, and bail out some bank on Sunday evening,
just before the Asian stock markets open. I wonder if that will
happen this weekend.
** US STOCKS-Wall Street ends sharply lower after hawkish Bullard spooks investors
https://www.reuters.com/article/usa-stoc...SL2N2O022L
This morning, Federal Reserve official James Bullard said that
inflation may be higher than expected, and the Fed may have to raise
interest rates at the end of 2022.
Investors freaked out.
Dow 30 33,290.08 -533.37(-1.58%)
S&P 500 4,166.45 -55.41(-1.31%)
Nasdaq 14,030.38 -130.97(-0.92%)
One analyst said that leverage has been a "moon shot" in the last six
months, meaning that investors have been borrowing heavily to invest
in stocks. This is what triggers a crash. If stock prices start
falling, and people have to start selling stocks heavily to meet
margin calls, then there's a vicious cycle that causes stock prices to
spiral down. That's exactly what happened in 1929.
I vaguely recall that in 2007-2008, the Fed would hold an emergency
session over the weekend, and bail out some bank on Sunday evening,
just before the Asian stock markets open. I wonder if that will
happen this weekend.
** US STOCKS-Wall Street ends sharply lower after hawkish Bullard spooks investors
https://www.reuters.com/article/usa-stoc...SL2N2O022L
