<blockquote>'The resulting global financial collapse taught us
nothing. That same misguided codependence between Federal Reserve and Wall Street has now produced yet another speculative episode. Years of zero-interest rate policy have produced a mature first half of a yield-seeking bubble-crash cycle, but the objects of speculation have now extended to both the stock market and the debt market (particularly the higher-yielding but junkier “covenant lite” variety that provides little protection in the event of bankruptcy). The unpleasant second half of this cycle remains ahead.'
- John P. Hussman, Ph.D.,
On Governance, January 30, 2017</blockquote>
'..Recalling 2007, well-entrenched Bubbles develop powerful momentum with the capacity to brush off even significant shocks..'<blockquote>'When it comes to the late-stage of a major Credit Bubble, the analysis in a way simplifies: The Bubble bursts or it inflates to only more perilous extremes. Recalling 2007, well-entrenched Bubbles develop powerful momentum with the capacity to brush off even significant shocks. Such resilience works to bolster already powerful bullish market sentiment, associated flows and speculative impulses (and “inflationary biases” more generally). This dynamic helps explain why Bubbles can go to such extremes before catching almost everyone by surprise when they eventually falter. The VIX dropped 10% during Friday’s rally, punishing those that were tempted to play for a market reversal with cheap option trades. The VIX closed the week at 10.79, trading Friday at the lowest level since early 2007.'
- Doug Noland,
The Wrath, February 4, 2017</blockquote>
Context (Banking Reform - English/Dutch) '..a truly stable financial and monetary system for the twenty-first century..'<blockquote>
'..deranged central bank policy encouraged continued speculation..''I believe fragilities today are much more systemic on a global basis than back in 2007..''..The same combination prevailed at the 1929, 1972, 1987, 2000, and 2007 market peaks..'</blockquote>