{"id":50951,"date":"2020-02-05T07:28:20","date_gmt":"2020-02-05T12:28:20","guid":{"rendered":"https:\/\/olduvai.ca\/?p=50951"},"modified":"2020-02-05T07:28:24","modified_gmt":"2020-02-05T12:28:24","slug":"prelude-to-crisis-2","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=50951","title":{"rendered":"Prelude to Crisis"},"content":{"rendered":"\n
\"\"\/<\/figure>\n\n\n\n

Prelude to Crisis<\/a><\/h3>\n\n\n\n

\u201cThe Federal Reserve is running the risk of fomenting an eventual financial crisis by easing banking regulations at the same time that it\u2019s cut interest rates\u2026say some former Fed officials, including ex-Vice Chairman Alan Blinder and financial stability experts Daniel Tarullo and Nellie Liang.\u201d<\/em>
\u2013 Bloomberg article on December 17th<\/sup>, 2019<\/p>\n\n\n\n

______________________________________________________________________________________________________<\/p>\n\n\n\n

INTRODUCTION<\/strong><\/p>\n\n\n\n

When we published the first edition of our Bubble 3.0<\/em> series<\/a> in December 2017, the S&P 500 had ballooned to then-record-highs. Most pundits at the time turned a blind eye to some of the more concerning aspects of the market, and our view of a pending implosion was very much in the minority. Fast-forwarding a few quarters, and several corners of the market that looked unstoppable in late-2017 did in fact collapse. The poster child for the flushing out that we forewarned about<\/a> was Bitcoin, whose price fell from nearly $20,000 to just over $3,000 in less than twelve months.<\/p>\n\n\n\n

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Source: Bloomberg, Evergreen Gavekal<\/em><\/figcaption><\/figure><\/div>\n\n\n\n

But the fringe investment that gained incredible steam at the end of 2017 wasn\u2019t the only corner of the market to melt down in less than a year. The S&P 500 also fell by almost 20% toward the end of 2018, teetering on the cusp of \u2013 and barely avoiding \u2013 the first bear market in nearly a decade.<\/p>\n\n\n\n

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Source: Bloomberg, Evergreen Gavekal<\/em><\/figcaption><\/figure><\/div>\n\n\n\n

It was at this point that\u00a0we encouraged readers<\/a>\u00a0to begin methodically accumulating shares of high-quality companies. As most market observers are aware, the US stock market reversed course soon after, breaking through several key resistance points and reaching new highs time and time again over the course of the last twelve months. This happened despite escalating conflict in the Middle East, ballooning corporate and sovereign debt, the impeachment of President Donald Trump, global fears of a widespread coronavirus outbreak, and deepening tensions amongst some of the world\u2019s most influential and well-armed superpowers.<\/p>\n\n\n\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Prelude to Crisis \u201cThe Federal Reserve is running the risk of fomenting an eventual financial crisis by easing banking regulations at the same time that it\u2019s cut interest rates\u2026say some former Fed officials, including ex-Vice Chairman Alan Blinder and financial stability experts Daniel Tarullo and Nellie Liang.\u201d\u2013 Bloomberg article on December 17th, 2019 ______________________________________________________________________________________________________ INTRODUCTION […]<\/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":[1806,24488,3650],"class_list":["post-50951","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bubble","tag-evergreen-gavekal","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50951","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=50951"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50951\/revisions"}],"predecessor-version":[{"id":50952,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50951\/revisions\/50952"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=50951"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=50951"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=50951"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}