Richard Sylla: 70% to 80% Chance of Another Global Financial Crisis
Written by Peter Diekmeyer, Sprott Money News
When Janet Yellen, Chairman of the US Federal Reserve, said in June that she does not expect another financial crisis in our lifetime, eyebrows were raised.
None more so than Richard Sylla’s.
Thirty years ago this week, the stock market took a massive nosedive, a crash that came to be known as Black Monday. Many investors were destroyed by this one day's collapse, but, as we noted earlier, some survived (and even fewer thrived).
A few investors said they predicted the crash, including one familiar name: Donald Trump.
While now-President Trump is crowing about the surging stock market almost every day (for instance today)...
“The markets in a panic are like a country during a coup, and seen in retrospect that is how they were that day,” wrote a young Salomon bond salesmena named Michael Lewis, of the chaos he witnessed. “One small group of people with its old, established way of looking at the world is hustled from its seat of power.”
Amid confusion over whether the massive Saudi Aramco IPO is on hold until 2019, or permanently shelved in favor of a private placement, Reuters suggests the latter is now more likely as 'sources familiar with the matter' say China is offering to buy up to 5 percent of Aramco directly (offering the Saudis the lack of transparency they may have been nervous of with a public placing).
As we noted previously, China has been very actively diversifying its sources of energy...
Probably nothing...
The last two times the spread between 30Y and 5Y Treasury bonds was below 90bps, the US economy entered recession...
And the 2s10s curve is tumbling too - to its flattest since the crisis...
But, but, but, how can a recession be coming with stocks are record highs?