What’s new? Risk markets conditioned to disregard risk
Credit Bubble Bulletin/Doug Noland
“Is systemic risk really at the lowest point this week since before the crisis? Ridiculous. For starters, China poses a clear and present danger to both the global economy and financial system. China has added a scary amount of debt over the past decade – its ‘miracle’ economy surely the poster child for Credit excess-induced structural maladjustment. Debt has grown tremendously across the globe. Today’s global market and financial excesses are unprecedented. Risk is extraordinarily high, certainly owing to central bank stimulus and these wacky securities and derivatives prices.”
USAGOLD note: That about sums up the current risk profile for financial markets as we start the week. . . . The coronavirus, if it continues unimpeded, obviously will undermine China’s ability to service and pay its debts potentially creating a different kind of contagion effect than the one presented by the virus alone.
Repost from 2-8-2020