This is the moment when yield-chasing turns into a massacre.
Drags out bailout creature from Financial Crisis 1: “Loans” to Primary Dealers.
Frazzled by the sudden appearance of Financial Crisis 2, the Fed scurries in every bailout direction.
If the Fed hadn’t spent a decade inflating such a mind-blowing Everything Bubble (that had already begun to wobble), the financial reactions wouldn’t be nearly as chaotic.
Chapter 11 bankruptcy that wipes out shareholders is the correct solution for collapsing share-buyback queens. US airlines already know this from experience. It works.
It’s not the drop that worries me, it’s the historic neck-breaking volatility.
Holy moly, what a mess. But here is our hilarious cartoon of Jerome Powell tearing out his hair. Gotta keep you sense of humor.
The Fed is going nuts trying to contain this.
Holy moly, that’s fast. Too fast. Desperate Fed rolls out biggest bazooka yet.
Since the shock-and-awe surprise rate cut, the S&P 500 has dropped 3.8%.