While zombies were pretending that nothing was happening, all major sources of liquidity were systematically depleted. And all asset classes were pounded (except recession stocks). In this last leg down, everything gets synched to the downside at the same time, amidst zero liquidity...
These asset classes have already been pounded:
Carry trades
Oil
Commodities
Global stocks
EM Currencies
Cyclical stocks
Big Cap Tech
Growth/momentum stocks
Banks/Financials
Small Caps
Most shorted stocks
Junk Bonds
Leveraged loans
All major sources of liquidity have been depleted:
Central Banks
Profits/buybacks
Momentum traders
Carry trades
Institutions
Short-covering
Sovereign wealth funds
"And then they learned that printing money to buy stocks wasn't the secret to effortless wealth. Because after all, who knew?"
Wilshire with Fed Funds rate and Fed balance sheet (green):
All major sources of liquidity have been depleted:
3x overvalued recession stocks are the last asset class to roll over...
"And then they learned that printing money to buy stocks wasn't the secret to effortless wealth. Because after all, who knew?"
Wilshire with Fed Funds rate and Fed balance sheet (green):
