{"id":1488874,"date":"2024-09-09T22:05:00","date_gmt":"2024-09-10T02:05:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1488874"},"modified":"2024-09-09T22:05:00","modified_gmt":"2024-09-10T02:05:00","slug":"does-anyone-else-smell-a-market-crash-in-the-air","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/does-anyone-else-smell-a-market-crash-in-the-air\/1488874\/","title":{"rendered":"Does Anyone Else Smell A Market Crash In The Air?"},"content":{"rendered":"

Does Anyone Else Smell A Market Crash In The Air?<\/span><\/p>\n

\n

Authored by Charles Hugh Smith via OfTwoMinds blog,<\/em><\/a><\/p>\n

Markets are manipulated, yes, but they’re still structures of tightly bound, self-organizing complexity which lend themselves to sudden non-linear collapses.<\/em><\/p>\n

<\/a><\/em><\/p>\n

Just as thunderstorms scent the air before their arrival, market crashes often announce themselves in the autumn zephyrs.<\/strong>\u00a0Markets don’t crash when everyone’s in full-blown panic? they crash when the headlines and data are reassuring, analysts are confident in ever-higher profits, and complacency reigns supreme, evidenced by record-high household allocation in stocks and bullish sentiment readings.<\/p>\n

Markets crash after a brief bit of panic selling is immediately bought and markets are returned to a\u00a0permanently high plateau<\/em>\u00a0of valuation<\/strong>\u00a0as we saw in August, as the S&P 500 shot back up within a whisker or two of all-time highs. Punters buy every dip because this quick reaction to any drop has been richly rewarded for 15 years, and everyone has confidence in the\u00a0Fed Put<\/em>\u00a0, ie the belief that the Fed will move Heaven and Earth to restore “market confidence” and the\u00a0wealth effect<\/em>\u00a0.<\/p>\n

In other words, market participants have embraced\u00a0moral hazard<\/em><\/strong>\u00a0: there is no real downside, there is only upside to buying every dip.<\/p>\n

Markets crash when the rot beneath the surface is invisible or goes unnoticed.<\/strong>\u00a0The few doom-and-gloomers who note extremes are immediately mocked off the stage, and the headlines tout the resilience of the economy, markets, employment, profits, and the techno-wonders heading our way.<\/p>\n

After the crash nobody predicted, analysts swarm like ravenous locusts to the digital airwaves to lay claim to their prescience:<\/strong>\u00a0look, look, I added a one-line disclaimer about “irrational exuberance” at the end of my report!<\/p>\n

I’ll spare you the analog charts and go right to the chase: the\u00a0Oasis Indicator<\/em><\/strong>\u00a0, brought to our collective attention by Joe Sullivan-Bennett via BondVigilantes.com:\u00a0The Peculiar Relationship Between Oasis & Periods Of Extreme Market Volatility<\/a>\u00a0(Zero Hedge). (Fun fact: Before Oasis\u00a0Wonderwall<\/em>\u00a0, there was George Harrison’s 1968 soundtrack LP\u00a0Wonderwall<\/em>\u00a0.)<\/p>\n

Those turning up their nose at the Oasis Indicator might benefit from pondering these “jaws of death” charts.<\/strong>\u00a0Everything is extreme and stays extreme until it doesn’t. Consider the gaping pearly teeth of the SPX (S&P 500) and JPY (Japanese yen).<\/p>\n

<\/a><\/p>\n

Or the\u00a0Mack the Knife<\/em>\u00a0of SPX and Fed reserves:\u00a0<\/strong>You know when that shark bites with his teeth, Scarlet billows start to spread…<\/em><\/p>\n

<\/a><\/p>\n

And last but not least, the 2-year Treasury yield and the Nasdaq Index:<\/strong>a loaded mousetrap if there ever was one.<\/p>\n

<\/a><\/p>\n

There’s no convincing the complacent.<\/strong>\u00a0You either sense what’s coming or you don’t. It’s like a sixth sense in a way, an intuitive awareness developed by absorbing huge losses in previous “unpredicted” crashes.<\/p>\n

Markets are manipulated, yes, but they’re still structures of tightly bound, self-organizing complexity<\/strong>\u00a0which lend themselves to sudden non-linear collapses.<\/p>\n

But never mind, a little autumn shower never hurts anyone.<\/strong>\u00a0And so nobody carries an umbrella on a day that starts out sunny and clouds over too quickly to respond.<\/p>\n

*\u00a0 *\u00a0 *<\/p>\n

Become a $3\/month patron of my work via patreon.com<\/a><\/em>.<\/em><\/p>\n

Subscribe to my Substack for free<\/a><\/em><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nMon, 09\/09\/2024 – 18:05<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/does-anyone-else-smell-market-crash-air<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Does Anyone Else Smell A Market Crash In The Air? Authored by Charles Hugh Smith via OfTwoMinds blog, Markets are manipulated, yes, but they’re still…<\/p>\n","protected":false},"author":0,"featured_media":1488875,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1488874","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1488874","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1488874"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1488874\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1488875"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1488874"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1488874"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1488874"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}