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See: https://www.nytimes.com/2018/08/11/business/turkey-lira-crisis.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-newsYet he is doubling down on his doomsday message: The river of global cash will dry up, the dollar will spike and there will be a series of financial seizures. Investors, he thinks, will flee developing economies, then Europe and eventually the American stock and bond markets.
“It won’t be a banking crisis this time around — it will be a financial market crisis,” Mr. Lee said. “And I am very confident that it will happen.”
© 2015 Mutual Fund Observer. All rights reserved.
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And the fact that all of us are stupid.
Will It Rain Tomorrow?
Ha! Love the cliche. But my sense is we need more coal mines to house all the canaries. Bill Fleckenstein thinks it’s Tesla. I’m thinking Bob Mueller. Who knows?
I will say that perhaps half of the big U.S. market downdrafts I can remember over the past 20-30 years have had some root in the EM markets. Probably because they’re the most sensitive to credit / interest rate issues which than spread to the developed markets. The 1997 Asian Market Crisis is one. https://en.m.wikipedia.org/wiki/1997_Asian_financial_crisis
I'm not sure that I understand all of this. Is he saying that they replaced the canaries in the coal mines with turkeys? I was under the impression that usually turkeys owned and ran the coal mines. This coal mine stuff can really be confusing.
(But nice attempt to butcher the metaphor)
Your homework, in addition to reading this book, is to memorize these prophetic words from it: “All animals are equal, but some animals are more equal than others.”
Than you are to compose a 50-word or longer piece of expository prose about it in which you are not allowed to mention @Ted.
Recognize the bridge in the photo?
I assume the person on the beach is Mr. Lee, yes?
No - I was too engrossed in the feathery creatures alluded to in the mixed metaphors than to notice the photo. Yes, I assume that’s Mr. Lee also.
Would guess the shot is from the Mackinaw City side looking north towards Saint Ignace. Was just up there last week. Trip into Canada (Manatoulan Island) and than stopped and biked around Mackinaw Island on the way home.
Regards
@hank- Awww, come on now. Play fair!
I wandered a bit from your subject post, relating to the Mackinac Bridge in the article photo; which has a 5 mile span connecting the lower and upper peninsulas of Michigan.
As to the subject, I'm not sure why NYT chose this particular piece; but Mr. Lee is likely not wrong about possibilities. There is a very large boat load of money in the form of bond issuance globally.
If one were to envision the financial markets perched upon an eight leg stool of bonds and other cash substitutes; not all legs would have to break to cause a problem.
CDS (credit default swaps); being insurance against bond defaults and other forms of derivatives are still in place, not unlike the market melt 10 years ago. CDS instruments, to the best of my knowledge are still not monitored or under scrutiny by any official agency, U.S. or global. Although I am sure the Fed. and U.S. Treasury know the amounts.
Apologies for the thread drift via the "bridge".....I don't like or appreciate excessive thread drift either.
Regards,
Catch
An interesting read is David P. Lubin's Dance of the Trillions: Developing Countries and Global Finance, which should be out around now (Brookings/Chatham House). Lubin is head of emerging markets economics at Citi - London. There are a couple of YouTube videos of him speaking on Russia, e.g.
Just one more off-topic diversion - Can’t help wondering: Why Is Mr Lee standing next to the Mackinaw Bridge? Is He thinking of jumping? Or, is he afraid others might if the global economy worsens? Or maybe he views it as a Bridge Over Troubled Waters (made famous by Simon & Garfunkel). But it’s also suggestive of the old “Wanna buy a bridge?” laugh line.