Japan is CRATERING, The Rest Of The World Is Next...

Summary

Le monde financier a été secoué par un effondrement japonais qui a déclenché une vague de liquidations mondiales suite à l'échec du récit d'une atterrissage doux aux États-Unis. Les marchés ne sont pas prêts à un récession américaine, et l'idée d'une sortie indemne après les défis des quatre dernières années est remise en question. Le risque de crédit d'entreprise, jusqu'alors sous-évalué, est à la pointe de la réévaluation, entraînant une volatilité accrue et des perturbations dans les marchés boursiers et des liquidations de marges.

Takeaways

• 📉 Le monde financier a été profondément affecté par un effondrement japonais qui a déclenché des liquidations mondiales suite à l'échec du récit d'une atterrissage doux aux États-Unis.
• 💹 Le marché n'était pas prêt à gérer une récession américaine, remettant en question la croyance que les expériences des quatre dernières années pourraient être surmontées sans conséquences.
• 🏦 La perception du risque doit être repensée rapidement, car elle était précédemment surestimée, ce qui rend la revalorisation du risque complexe et potentiellement tumultueuse.
• 🇯🇵 Le Japon est devenu le centre des liquidations et du krach boursier, bien que cela ne soit pas seulement une question de valeurs japonaises, mais plutôt un signe de forces plus profondes en mouvement.
• 📈 Les marchés ont été marqués par une confiance excessive dans la résilience et la force des marchés, notamment les actions et le crédit d'entreprise.
• 📉 Les investissements à haut risque ont été fréquents, alimentés par l'idée d'une atterrissage douce et une économie américaine solide, ce qui a créé des bulles de prix.
• 📊 Les données économiques américaines commencent à suggérer une récession, ce qui a provoqué un bouleversement des marchés et une revalorisation des risques.
• 🌐 L'effondrement du récit de l'atterrissage doux aux États-Unis a des répercussions mondiales, affectant la perception de la stabilité économique globale.
• 📊 Les taux d'intérêt ont chuté en réponse à la préoccupation croissante quant à une récession, malgré les taux déjà élevés.
• 💔 La confiance dans la capacité de la Réserve fédérale à stimuler l'économie est en déclin, alors que les taux d'intérêt restent élevés et que la récession semble inévitable.
• 🚨 Les liquidations et les appels de marge sont un signe des problèmes sous-jacents du marché, où les investissements à haut risque sont devenus insoutenables face à la nouvelle réalité économique.

Q & A

Quel événement a déclenché une vague de liquidations mondiales dans le monde financier?

Un effondrement massif du marché japonais a déclenché une vague de liquidations mondiales en raison de l'effondrement de la narrative américaine d'une atterrissage doux.

Pourquoi le système financier n'est-il pas prêt à gérer une récession aux États-Unis?

Le système financier n'est pas prêt à une récession américaine car il s'appuie sur l'idée que les États-Unis pourraient traverser l'ensemble des défis des quatre dernières années et en ressortir indemnes, ce qui était la colonne vertébrale de la croyance pour un large éventail du système, y compris les actions et le crédit d'entreprise.

Quel est le lien entre la chute du marché boursier japonais et les liquidations globales?

La chute du marché boursier japonais est l'épicentre des liquidations et de la vente en masse, et cela n'est pas seulement lié aux actions japonaises mais aussi aux raisons évidentes liées au comportement des actions japonaises et des actions en général ces derniers temps.

Quels ont été les impacts de la politique monétaire de la Banque du Japon sur le marché des obligations gouvernementales japonaises?

La hausse des taux par la Banque du Japon a été suivie d'une chute substantielle des rendements d'obligations gouvernementales japonaises, indiquant que le marché ne soutient pas la décision de la Banque du Japon de relever les taux ni sa capacité de le faire face à la situation économique mondiale.

Comment les investisseurs japonais ont-ils influencé le marché du crédit d'entreprise aux États-Unis?

Les investisseurs japonais, cherchant un rendement élevé en raison de leurs propres coûts de financement, ont investi massivement dans les obligations d'emprunt collatéralisé et le marché du crédit d'entreprise aux États-Unis, ce qui a entraîné une compression des spreads et une augmentation de la complaisance sur le marché.

Quelle a été la réaction du marché boursier américain face à la perspective d'une récession aux États-Unis?

Les actions américaines ont été frappées, avec une chute significative, en raison des craintes d'une récession aux États-Unis, renforcée par les données du marché du travail et la politique monétaire de la Réserve fédérale.

Quels ont été les signes précurseurs de la liquidation et des appels de marge dans le marché financier?

Les signes précurseurs incluent une augmentation des spreads de crédit, une chute des prix de l'or, une baisse des rendements d'obligations d'État américaines à court terme et une augmentation des échanges de défauts de crédit pour les entreprises à risque élevé.

Quel rôle les taux d'intérêt de la Réserve fédérale ont-ils joué dans la situation actuelle?

Les taux d'intérêt élevés de la Réserve fédérale, qui sont les plus élevés en deux décennies, ont contribué à la situation en ralentissant l'économie et en créant des inquiétudes sur la capacité de la Banque centrale à soutenir l'économie face à une récession potentielle.

Quels sont les impacts potentiels d'une récession aux États-Unis sur le marché mondial?

Une récession aux États-Unis pourrait avoir des impacts significatifs sur le marché mondial, notamment en entraînant une réévaluation des perspectives économiques, une compression des spreads de marché, une liquidation des actifs à risque et une augmentation des incertitudes économiques.

Quels sont les défis auxquels le marché financier mondial doit faire face suite à la narrative de l'atterrissage doux qui s'effondre?

Les défis comprennent la nécessité de repenser les risques, de réévaluer les actifs à risque, de gérer les liquidations et les appels de marge, et de faire face à une période potentiellement tumultueuse marquée par des fluctuations de marché et des incertitudes économiques accrues.

Outlines

00:00

🌪️ Changements mondiaux financiers suite à la crise japonaise

Le monde financier a été profondément affecté par une crise japonaise qui a déclenché des liquidations mondiales suite à l'effondrement de la narrative américaine sur un atterritage doux. Le système financier n'était pas prêt à gérer une récession aux États-Unis, ce qui remettait en question la croyance que les défis des quatre dernières années pourraient être surmontés sans conséquences. La réévaluation du risque et la restructuration du marché sont prévues, avec une attention particulière sur le crédit d'entreprise. La chute du marché boursier japonais a été spectaculaire, avec des pertes de plus de 20% depuis leurs points historiques, illustrant les difficultés financières et les appels de marge massifs.

05:00

🌐 Impact de la crise japonaise sur l'investissement international

Les investisseurs japonais, détenteurs de 106 trillions de dollars d'actifs étrangers à la fin de l'année dernière, ont été des acheteurs importants d'obligations sur gage américaines et australiennes, cherchant un rendement élevé en raison des coûts de financement. Leurs investissements dans des dettes d'entreprise 'junk' étaient basés sur la croyance en un atterritage doux garanti aux États-Unis. Cependant, la compréhension du marché a changé radicalement avec la prise de conscience que les États-Unis sont en récession, entraînant une réévaluation des perspectives économiques et une liquidation des actifs risqués.

10:02

📉 Répercussions de la récession aux États-Unis sur les marchés financiers

La confirmation d'une récession aux États-Unis a eu un impact significatif sur les marchés financiers, en particulier sur les investissements japonais dans les obligations d'entreprise 'junk'. Les tensions sur les appels de marge et les liquidations ont conduit à une augmentation des spreads de crédit, une baisse des prix des actions et une chute des rendements des obligations. Les marchés ont réagi à la nouvelle en liquidant des actifs et en cherchant des refuges plus sûrs, ce qui a créé des défis pour la liquidité et a exacerbé les problèmes de financement.

15:02

🚨 Avertissement des risques financiers mondiaux et implications futures

La prise de conscience que les économies mondiales, y compris celle des États-Unis, ne sont pas aussi résilientes que prévu a conduit à une réévaluation des risques et des opportunités d'investissement. Les marchés ont commencé à repenser leurs stratégies face à l'augmentation des défis économiques et financiers, et à la nécessité de gérer les déséquilibres et les problèmes de liquidité. Les implications vont au-delà de la simple récession aux États-Unis, soulignant la vulnérabilité des économies mondiales et la possibilité d'une crise plus profonde.

Keywords

💡Liquidations mondiales

Ce terme fait référence à la vente massive d'actifs financiers à travers le monde, généralement déclenchée par des problèmes économiques ou des changements de perception du risque. Dans le script, cela est attribué à un changement de narratif économique aux États-Unis, où l'idée d'une 'attérissage doux' est remise en question, entraînant une réévaluation des risques et des prix des actifs.

💡Attérissage doux

L'expression 'attérissage doux' désigne une récession économique qui aboutit à une croissance stable sans provoquer une crise financière ou économique majeure. Dans le script, la perte de confiance dans cette possibilité est soulignée comme un facteur clé de l'instabilité financière actuelle.

💡Risques réévalués

La 'réévaluation des risques' signifie que les marchés modifient leur appréciation des risques potentiels associés à l'investissement dans divers actifs. Dans le contexte du script, cela est dû à la compréhension croissante que les États-Unis pourraient être en récession, ce qui force les investisseurs à reconsiderer leurs positions.

💡Crédit d'entreprise

Le 'crédit d'entreprise' fait référence au financement fourni aux entreprises, généralement sous forme d'emprunts ou de titres. Le script met en évidence l'importance de ce secteur dans la réévaluation des risques, car les entreprises pourraient rencontrer des difficultés à rembourser leurs dettes en période de récession.

💡Marché japonais

Le 'marché japonais' est mentionné comme l'épicentre des liquidations et de la baisse des valeurs. Le script indique que les actions japonaises ont été particulièrement durement touchées, avec des pertes significatives, reflétant les problèmes plus larges de la liquidité et de la confiance sur les marchés financiers mondiaux.

💡Appels de marge

Les 'appels de marge' sont des demandes faites aux investisseurs qui ont acheté des actifs avec emprunt pour déposer des garanties supplémentaires suite à une dépréciation de la valeur de ces actifs. Dans le script, cela est cité comme un mécanisme qui a exacerbé les liquidations sur le marché boursier japonais.

💡Taux d'intérêt de la Réserve fédérale

Les 'taux d'intérêt de la Réserve fédérale' sont utilisés pour décrire les décisions de politique monétaire aux États-Unis qui influencent l'économie. Le script critique l'idée que des taux bas sont toujours bénéfiques, soulignant que dans le contexte actuel, ils peuvent être un signe de faiblesse économique.

💡Récessions inattendues

Les 'récessions inattendues' font référence à la tendance pour les marchés et les économistes à sous-estimer les risques d'une récession. Le script note que, malgré les signes précurseurs, la perception d'une 'attérissage doux' a conduit à une prise de conscience tardive des risques récessifs.

💡Écarts de taux

Les 'écarts de taux' sont la différence de taux d'intérêt entre différents types d'actifs financiers, souvent utilisés pour mesurer le risque et la liquidité sur les marchés. Dans le script, l'élargissement des écarts de taux est indiqué comme un signe de stress sur les marchés du crédit.

💡Risque de liquidité

Le 'risque de liquidité' se réfère à la possibilité qu'un actif ne puisse pas être vendu rapidement au prix du marché sans entraîner de pertes significatives. Le script souligne que les liquidations massives et les appels de marge ont créé un environnement où le risque de liquidité est élevé.

💡Marché du crédit

Le 'marché du crédit' est le secteur financier où les entreprises et les particuliers empruntent de l'argent. Le script met en évidence comment les changements dans le marché du crédit, y compris les hausses des taux d'intérêt et les inquiétudes sur la solvabilité, ont un impact direct sur l'économie globale.

Highlights

A massive Japanese meltdown sparked a wave of global liquidations due to the US soft landing narrative failing.

Financial systems are unprepared for a US recession and the implications it has on corporate credit.

Risk perceptions were previously too optimistic, leading to a hasty repricing of risk.

Japan's stock market plunge indicates a possible margin call, affecting global financial stability.

The belief in a US soft landing has been a key pillar for the financial system, including stocks and corporate credit.

Japanese stocks confirmed a bear market with significant drops in the Nikkei and TOPIX indices.

High levels of margin bets on Japanese stocks have reached the highest since 2006, leading to market unwinding.

Tokyo Electron and Japanese banks experienced significant share price drops, indicating a broader market issue.

Japanese government bond yields saw substantial drops, reflecting market uncertainty.

The US soft landing narrative is faltering, affecting global economic expectations and risk perceptions.

Japan's investors owned substantial foreign assets, heavily investing in American and Australian collateralized loan obligations.

The US labor market data suggests the US may already be in recession, causing turmoil in financial markets.

US stocks and Treasury yields were negatively impacted by fears of a US recession.

The Federal Reserve's approach to interest rates is under scrutiny as the economy slows down.

Global credit markets are repricing risk as the US recession narrative becomes more plausible.

Japanese firms may face collateral and margin call pressures, leading to liquidations.

The European junk bond default rate and credit risk perceptions are rising, indicating a shift in market sentiment.

The realization that the US economy may not recover as expected is causing a radical change in global financial strategies.

Market participants worldwide are now confronted with the need to reevaluate their strategies in light of economic realities.

Transcripts

the entire Financial world just changed

a massive Japanese meltdown sparked a

wave of global liquidations all because

the US soft Landing narrative went up in

smoke a lot of the financial system is

just not ready for the us to be in

recession it's not even just about

recession it's about the idea we could

experience everything that we did over

the last four years and come out of it

just fine that had been the one pillar

of belief for wide swwa of the system

including stocks but also importantly

corporate credit now everyone is going

to be forced to repic risk and do it in

a hurry because risk perceptions were

way to hell up in the clouds repricing

isn't going to be some Cakewalk it's

going to take time and it is going to be

bumpy just how bumpy depends on a lot of

factor starting with corporate credit

and that's just what the Japanese have

been really into Japan's plunge is just

the most obvious and what sure looks

like a massive margin in collateral call

so this isn't going to be just some one

off all anyone has said over and over

and over again was strong and resilient

soft Landing no Landing inflation is our

biggest risk to a lot of people chasing

risky asset returns this is a real shock

even though it really shouldn't be but

every recession is always unexpected and

for the same reason drunk on the fed's

imaginary punch bowl rate cuts are not

your friend low rates are not a sign of

anything good and rates abs absolutely

plunged this morning and that was on top

of Thursday and Friday now markets have

normalized since then during the morning

but that's just a start because the

entire Financial world has changed now

Japan that was the epicenter of the

liquidations and the selloff the real

meltdown especially in Japanese stocks

but this isn't really about Japanese

stocks that's just where it was the most

extreme and for obvious reasons or what

should be obvious reasons given the

behavior of Japanese stocks and stocks

in general over the last little while

Japan stocks confirmed a bare Market on

Monday as asia-pacific markets continued

the sell off from last week with the

nk225 and the topics dropping over

12% The Benchmark indexes has fallen

more than 20% from their all-time highs

on July 11th that was less than a month

ago so from J July 11th to today a 20%

drop the 12.4% loss on the niay which

saw it closed at 314584939

Po in his rate Cuts or somebody else

somewhere Some central bank will be be

able to save us because of all that

complacency The Economist reported this

margin bets on Japanese stocks trades

with made with borrow money had reached

the highest level since 2006 just before

the selloff began these leverage

Investments now appear to be being

Unwound at PACE explaining why Market

Darlings are suffering some of the

biggest Falls the share price of Tokyo

electron a vital supplier of

semiconductor kit fell by 18% on August

5th that's today and Japanese Banks

Japanese banks are down

27% in the space of two trading days it

doesn't sound just like your normal

everyday stock market route 12% decline

Japanese banks at the Forefront down a

quarter of their value in just two days

not just flight the safety we're

starting to talk about funding

difficulties and this wouldn't be

funding difficulties

on the Japanese

side because of that we have huge drops

in Japanese government bond yields the

10year ggp which had been around 1.07%

just a couple days ago after the bank of

Japan hiked rates let's not forget the

bank of Japan hiking rates last week was

just 77 basis points in yield today down

16 basis points on just today's trading

and it had been much lower in the early

stages so down to 7 77 basis points

after the bank of Japan hiked rates this

week this past week and then said we're

going to do it even more short-term

yields were down pretty substantially

too Market is just not buying either the

rationale for the bank of Japan to raise

rates or their ability to do so given

the global economic situation has

fundamentally shifted risk perceptions

have shifted with the US soft land

more and more off the table one final

note for the econom from The Economist

which really goes with what we're

talking about here today Japan's

investors owned 10.6 trillion in foreign

assets at the end of last year it's

probably substantially more than that

theyve become big buyers of American and

Australian collateralized loan

obligations and they bought those

collateralized loan obligations why

because of funding cost forced them to

reach for yield and they reached for

yield in the form of junk corporate

corporate debt like Clos because they

thought and they were told repeatedly by

everyone the US soft Landing was

guaranteed it was going to happen the US

economy was strong and resilient and

even in the face of some headwinds it

was performing exceptionally well so why

not reach for yield extend a little bit

of risk in Us corporate junk because

everything will be just fine in the end

but here's the thing though as the

Japanese were reaching for yield because

they didn't have any other choice given

the carry trade fundamentals that meant

that spreads in the corporate Market got

compressed even more and as spreads got

compressed even more that Drew more

people in the market because it seemed

as if it was conf confirmation of the

soft Landing scenario the more spreads

dropped the more it seemed fine the more

spreads dropped even further and it led

to this not just complacency but a

complete utter lack of appreciation for

the real risk that you could see coming

from other parts of the marketplace at

least the parts of the marketplace that

nobody ever pays much attention to swap

spreads and things like

that but all of it was based on the

premise that the US economy was heading

for a soft Landing therefore the global

economy would be just fine and not just

just fine it would be on the men this

was supposed to be the year of global

recovery into 2025 where everything

began to just normalize instead now the

next few years have been thrown into

deep turmoil why we have to re-evaluate

the prospects for the United States the

labor market there as well as what that

means in all of these markets where

spreads were really low prices and

stocks and other things were really high

and all of these price Bubbles and

imbalances now have to be

repriced US Stocks got hammered US

Treasury yields fell even further at

least in the initial stage they they've

normalized since then I mean at one

point pointed toe tenure spread actually

uninverted right at 8:30 a.m. eastern

time right when the Scramble for

collateral was at its what it was at its

its uh last stages the 10e godess low

was

3.67% 3.68% right around 830 at the same

time the 2year was around

368 uh got stayed around 368 around 845

so just as the stock market was opening

in the US the 2year 10 years uninverted

and of course the stock market us was

not spared from the liquidations as CNBC

reported fears of a US recession were

the main culprit for the global market

meltdown after Friday's disappointing

July jobs reports not just that

investors are also concerned that the

Federal Reserve is behind in cutting

interest rates to bolster an economic

slowdown with the Central Bank choosing

instead to keep rates at the highest in

two decades last week no it's not about

the FED it's about the fact that

everybody is realizing they made a

mistake and listen to the FED to get to

this point so as the US reported the

unemployment rate the labor data which

suggested the US is probably already in

recession that threw everything into

turmoil starting with the Japanese and

their heavy Reliance on reaching for

yield in Us corporate credit so what we

saw early morning was looked a lot like

a liquidation as well as margin calls or

at least a liquidation that was

predicated on margin and collateral

calls we got lots of indications for

collateral calls too earlier in the US

morning about around 6:30 a.m. eastern

time the 4-we treasury bill for example

the yield on that went from 5.34% down

to 5.28% over the next couple hours so

that by 8:30 it was down and what sure

looked like a Scramble for collateral

one we haven't seen in quite a long time

and one we shouldn't expect to see given

the amount of treasury bills that are in

issuance even the 3-month bill saw some

scram Ling in that one too that one

started early around 3:15 in the morning

uh was 5.17% and dropped to around

5.88% by 8:46 a.m. we even saw a drop in

gold prices talking about scrambled for

collateral that's one the a key

confirmation that tells us that that's

something that's that's happening again

it was almost exactly the same time as

we saw buying in the four-week treasury

bill we got selling in Gold telltale

signs of Scramble for collateral 6:30

a.m. gold is around 2460 per ounce and

by 8:30 a.m. it's down to 2407 so almost

a $60 drop in the price of gold at the

same time you see a six basis point

decline in the four-week treasury bill

yield Scramble for collateral collateral

call Global

liquidations and the reason for that

collateral call junk spreads exactly

what the Japanese have been buying for

the last well over a year but probably

heavily just recently remember we talked

about NN chicken Bank what was Chen Bank

doing they were going to sell us

treasuries and buy Clos over the last

couple days last week as it became more

and more clear the US was heading into

recession not just in the payroll report

but also some of the data that came out

just before then credit spreads have

jumped quite a bit over the last several

days so even before we got to the

weekend likely the Japanese were likely

under heavy pressure on collateral and

margins here's what Bloomberg reported

about collateral spreads this morning a

gauge of perceived risk in the US

corporate credit Market spiked as much

as 7.4 basis points to 65.6 57 basis

points Monday morning that's a huge move

the biggest one-day climb since March

2023 after Silicon Valley Bank collapsed

this is big stuff going on in Europe an

index that tracks credit default swaps

for Junk rated companies Jump by the

most since March 2023 when credit sweet

collapsed a credit derivatives gauge in

Asia Rose to the highest since May and

yield premiums for high-grade dollar

Bonds in the region are set for the

biggest surge in 22 months according to

Traders and a Bloomberg index Japan is

at the center of all of these various

parts of the credit system and they have

been reaching for yield on the belief

the US economy was just fine as spreads

compressed it made it seem like

everything was just working out

perfectly and then suddenly the soft

Landing narrative Goes Up in Smoke the

data confirms the US is heading for

recession if it's not already there

everything that looked like it was just

fine suddenly looks like it's not fine

and as it looks not fine and people

start running for the exits you get low

levels of liquidity you've got

liquidations and you got spikes and

spreads that are going to create knock

on effects in collateral as well as

other markets like stocks so the

Japanese firms were likely forced to put

up collateral that they maybe didn't

have or liquidate and they chose that

they in some ways they were forced to

liquidate but I'm sure that there were

some voluntary liquidations too they

were also running for the exits to get

out while the getting is still

good and there were warning signs before

we I mean long before we got to August

you could see something had changed in

the marketplace going back to really

April into may but then the middle of

June what seemed like a a matter about

the European elections may have masked

what was really going on all the time

that there was more substantial

weakening and it had nothing to do with

European parliamentary elections or the

French presidential election it was

instead the system getting ready to

reprice everything in the in the face of

what we're seeing now confirmed in

macroeconomic data here's what Bloomberg

wrote perceived credit risk had been

falling for much of the year as

investors chased elevated yields and

recession fears were put on the back

burner even though delinquencies have

risen so everybody was reaching for

yield thinking soft Landing J Powell

says we can see credit delinquencies

Rising but as long as the US economy is

just fine who cares about delinquency

rates but as soon as it becomes clear

the US economy is not fine now all of a

sudden it's oh crap delinquency rates

have already risen and that's before we

even got to the worst parts or even the

the the initial real initial stages of

the US

recession the default rate for

Bloomberg's European European junk bond

IND IND climbed to

2.96% Crossing Co era

1.8% the latest gurations suggest a

turning point if concerns about a worse

than expected slowdown in the US and its

spillover effects deepen they're not

just Fierce they're not just back burner

it's starting to

happen as I said this is a huge radical

change for a whole lot of people because

all of the experts all of the economists

all of the politicians and Central

Bankers said this is going to be just

fine strong and resilient strong and

resilient strong and resilient so many

people took that at face value and so

they piled into all of these risky junk

assets because why not reach for yield

get a little bit of extra yield when the

risks are exceptionally low and that

view predominated all over the world

I'll give you another example the same

underlying drivers a see AO deal volume

tight spreads High all in yields

constructive loan prices are producing

positive KnockOn effects these in turn

are further boosting investor sentiment

for the market and ultimately driving

more demand that when combined with a

constructive macro backdrop in which GDP

remains relatively robust and

unemployment relatively low amid a

broadening of investor base as us

domestic Banks return as active buyers

in other words the idea of the soft

Landing meant it wasn't just Japanese

chasing for yield US Banks started to do

the same thing for the same premises the

same idea the econ was just fine so the

fact that it's become clear or very much

clearer the last week that the US

economy is not fine is a huge huge deal

it starts with Japan because they're the

biggest one doing it but it's not going

to end in Japan because it's not really

about Japan and it's not really about

the US recession either as I said

earlier in the video from the very

beginning a US recession represents a

material risk over and above just

general economic contraction because

part of the soft Landing was sort of a

relief relief that we could experience

everything of the last four years and

come out of it just fine that's what the

soft Landing really represented that

officials and governments and experts

and everyone around the world could come

together and engineer something like

this that we could go through something

as traumatic and damaging long run

damaging as to supply shock the pandemic

the lockdowns all of it that we could go

through that and come out of it just

fine in that scenario the world is a

vastly different place a US recession on

top of everything else we've seen in

China and Europe and

elsewhere strongly suggests that no you

can't go through the period like that

and come out of it squeaky glean so the

implication isn't just about the US and

a recession the implication is much

greater and that realization has been

condensed into a very short period of

time of just the last week or so now

it's been building it's been coming

we've been talking about it all this

time but over the last week more and

more the confirmation the data signals

from all around the pl corporations

continue to tell you the dangers have

been rising and so all of the sudden the

Japanese and all the other participants

in these markets are being confronted

with something they thought they would

never have to confront and it's causing

all sorts of disruption all throughout

the marketplace from credit spreads

which is a huge one creating liquidation

problems because of collateral and

margin calls that spread into stock

markets focused a lot on Japan and Asia

but not just Japan and Asia this is the

first step and what is likely to be a

very bumpy process as the world has to

attempt to repic the Happy Goldie Locks

we made it through the pandemic uh

scenario to whole crap we didn't maybe

we took a lot of damage and now we have

to do now we have to deal with it we

have to deal with all the imbalances we

have to deal with the economic as well

as financial and maybe even if we're not

lucky enough a monetary mess on top