Today Michael Oliver,Ā the man who is well known for his deadly accurate forecasts on stocks, bonds, and major markets,Ā warned King World News that š„a terrifying black swan of the largest magnitude has now been unleashed.
A Black Swan Of The Largest Magnitude
October 15 (King World News) āĀ Michael Oliver, founder at MSA Research:Ā Ā We called the top of the stock market in January and February on the NASDAQ and the S&P 500, well above here. We thought it would be a multi-year decline of major proportions because the bull market that proceeded it was a 7X time move for the S&P and a16X move for the NASDAQ 100, all sponsored by QE and more QEs for a dozen years. They printed the bubble, they pricked their stock bubble that they had created.Ā Once you create an implosion in a blowoff market that has gone way beyond excess and it starts down, itās impossible to stop it. That was true in the 2000 break and the 2007 top to the 2009 low. They tried to intervene (each time) but it didnāt stop it. Well this is no comparison to those (two stock market crashes).
So we have an asset bubble thatās collapsing and it was our assumption that if the data points showed over time that their tightening policy was having an effect then they will pull back the lever and quit their tightening. But this was a gradualistic assumption. Instead we have a black swan event and it is the biggest black swan I can conceive of.
The Biggest Crisis Weāve Ever Had In Any Market
In 2008-2009 we had the black swan of mortgage-backed securities where the Fed came in and supposedly supported that market by acquiring mortgage-backed securities and artificially pricing them and therefore causing great illiquidity in that market. This ultimately helped foster the stock market collapse which was a 50% drop in the S&P. We thought that was a collapse then. This time itās totally different ā a much bigger bubble.Ā The crisis is now unfolding in the š„bond markets and itās the biggest crisis weāve ever had in any market arena I can think of. So we have that crisis and it is something above any data points. We have an š„illiquidity crisis.š„ Itās a black swan of the largest magnitude.
Eric King:Ā Ā āMichael, what kind of endgame are we talking about here? There are emergency interventions because it does represent collapse, the kind of collapse that is, as you said, an endgame collapse.ā
A Far Greater Collapse
Michael Oliver: Ā š„āToday Yellen came in and the Treasury Department went to the largest banks asking if they needed support of their bonds they held ā did they need the Treasury to come in and buy back those bonds? So in other words thereās an emergency here.š„
And there are a lot of people who are saying, āThis isnāt like the mortgage-backed securities collapse.ā Baloney. This is far bigger than thatā¦to continue listening to Michael Oliver discuss the ultimate black swan that has now been unleashed...
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