'..What about the possibility that the global leveraged speculating community is in increasing disarray? How about fears of potential counter-party issues in the convoluted world of derivatives trading? Could it be because of mounting fears of a crisis of confidence in Chinese and EM banking systems?..'<blockquote>'I actually believe the faltering global Bubble has progressed beyond the point where Fed rate policy has much impact. Yet the Fed is determined to “push back against a tightening of financial conditions.” But are so-called “financial conditions” being tightened by happenings in China? Or is the culprit pressure on yen and euro short positions? Could it be because of a panicked “hot money” exit from EM – exposing Trillions of problematic dollar-denominated debt? How about an unwind of “risk parity” and other leveraged strategies that will not perform well in the New World Disorder of liquidity-challenged and unstable currency and financial markets? What about the possibility that the global leveraged speculating community is in increasing disarray? How about fears of potential counter-party issues in the convoluted world of derivatives trading? Could it be because of mounting fears of a crisis of confidence in Chinese and EM banking systems? Analysts and the media always like to pick a culprit du jour.
Perhaps chair Yellen and the FOMC is beginning to appreciate that it is not in control of the markets – and is certainly not in control of the faltering global Bubble. And Chinese officials are not in control – nor the BOJ nor ECB. EM central bankers, facing a currency crisis, have certainly lost control. And with European and U.S. equities Bubbles succumbing, the unfolding global crisis has penetrated The Core. Things turn even more serious when contagion begins impinging liquidity in the U.S. corporate debt market. I fear I will be writing about this dynamic in relative short order.'
- Doug Noland,
New World Disorder, September 26, 2015</blockquote>
Context<blockquote>
'..the phenomenon of wave after wave of economic ups and downs is ideological in character..'((Monetary) bureaucracy) - '..a historic global Credit boom..' - 'They are delusional.''..there’s too much left unlearned from the Fed’s checkered 100-year history.' - '..made the Second World War possible, though not inevitable..'</blockquote>