{"id":24228,"date":"2017-06-25T18:39:44","date_gmt":"2017-06-25T23:39:44","guid":{"rendered":"http:\/\/olduvai.ca\/?p=24228"},"modified":"2017-06-25T18:39:44","modified_gmt":"2017-06-25T23:39:44","slug":"itll-be-an-avalanche-hedge-fund-cio-sets-the-day-when-the-next-crash-begins","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=24228","title":{"rendered":"“It\u2019ll Be An Avalanche”: Hedge Fund CIO Sets The Day When The Next Crash Begins"},"content":{"rendered":"

“It\u2019ll Be An Avalanche”: Hedge Fund CIO Sets The Day When The Next Crash Begins<\/a><\/h3>\n
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While most asset managers have been growing increasingly skeptical and gloomy in recent weeks (despite a few ideological contrarian holdouts), joining the rising chorus of bank analysts including those of Citi<\/a>, JPM<\/a>, BofA <\/a>and Goldman <\/a>all urging clients to “go to cash”, none have dared to commit the cardinal sin of actually predicting when <\/strong>the next crash will take place<\/em>.<\/p>\n

On Sunday a prominent hedge fund manager, One River Asset Management’s CIO Eric Peters broke with that tradition and dared to “pin a tail on the donkey” of when the next market crash – one which he agrees with us will be driven by a collapse in the global credit <\/em>impulse – will take place. His prediction: Valentine’s Day 2018.<\/em><\/p>\n

Here is what Peters believes will happen over the next 8 months, a period which will begin with an increasingly tighter Fed and conclude with a market avalanche: <\/strong><\/p>\n

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\u201cThe Fed hikes rates to lean against inflation,\u201d said the CIO. \u201cAnd they\u2019ll reduce the balance sheet to dampen growing financial instability,\u201d he continued. \u201cThey\u2019ll signal less about rates and focus on balance sheet reduction in Sep.\u201d<\/p>\n

Inflation is softening as the gap between the real economy and financial asset prices is widening. \u201cIf they break the economy with rate hikes, everyone will blame the Fed.\u201d They can\u2019t afford that political risk.<\/p>\n

\u201cBut no one understands the balance sheet, so if something breaks because they reduce it, they\u2019ll get a free pass.\u201d<\/p>\n

\u201cThe Fed has convinced itself that forward guidance was far more powerful than QE,\u201d continued the same CIO.<\/p>\n

\u201cThis allows them to argue that reversing QE without reversing forward guidance should be uneventful.\u201d Like watching paint dry. \u201cBalance sheet reduction will start slowly. And proceed for a few months without a noticeable impact,\u201d he said. \u201cThe Fed will feel validated.\u201d Like they\u2019ve been right all along.<\/p>\n<\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

“It\u2019ll Be An Avalanche”: Hedge Fund CIO Sets The Day When The Next Crash Begins While most asset managers have been growing increasingly skeptical and gloomy in recent weeks (despite a few ideological contrarian holdouts), joining the rising chorus of bank analysts including those of Citi, JPM, BofA and Goldman all urging clients to “go […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[14994,13503,15429,501,15427,2731,15428],"class_list":["post-24228","post","type-post","status-publish","format-standard","hentry","category-economics","tag-14994","tag-eric-peters","tag-global-credit-impulse","tag-market-crash","tag-one-river-asset-management","tag-stock-market-crash","tag-valentines-day-2018"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24228","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24228"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24228\/revisions"}],"predecessor-version":[{"id":24229,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24228\/revisions\/24229"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24228"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24228"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24228"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}