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Janet Yellen thinks it’s smooth sailing from here on in. This week, she said she believes we won’t have another major financial crisis “in our lifetime” because banks are stronger.
On Tuesday, the International Monetary Fund cut the U.S. growth rate to 2.1%, citing doubts the Trump White House gets any tax deal done by year’s end.
Tech stocks are finally coming down to earth. The majors — Facebook, Apple, Amazon, Microsoft and Google — all fell on Thursday. The combined market cap of these companies is now bigger than the economy of Venezuela. The Volatility Index (VIX), aka “the fear gauge” rose around 30% yesterday, its biggest increase since May 17. The VIX has been silent all year. No one has been worried about a dang thing.
The central bank of central banks, known by its acronym BIS, is worried yet either. For conspiracy theorists, BIS wants a globalist solution to protect from another crash, just in case. In its annual report on Sunday, the Bank of International Settlements said that the growth outlook was better than it was a year ago, but Claudio Borio, the BIS monetary and economic department head, told reporters things could be better. He noted that the economy was not growing fast enough. “The problems we face are global. The solutions must be global too.”
If the market crashes here or in Europe, everything goes to hell in a hand basket.
What are the odds of this blockbuster correction we have been reading about? And not some wimpy 10% correction or a moderately scary 20% one, either. People like Marc Faber are alluding to full-on panic attack corrections of 40% or more.
See: Here’s What Happens If The U.S. Faces Another Recession — Forbes
The ‘Hakuna Matata’ Market — Forbes