Just something I find rather interesting right now. If you look back at the history of global markets since the GFC, we’ve had a spattering of issues around the world that have caused a lot of worry in the markets. Here are some examples of what we faced and moved past.
Major Financial Market Issues Post GFC….
- Eurozone crisis of 2011
- Commodity crash of 2012-2015 (namely oil in 2014)
- Chinese hard landing in 2015-2016 and potential currency problems
- Potential Brexit crisis
- Broad emerging market recession
So lets take a review of the current issues that global markets are worried about…
- Eurozone crisis (ECB banking problems, Italy debt problems, France protests, populism, etc). This is renewed and potentially even more worrisome than it was in 2011 since the countries at risk are larger.
- Commodities have started to crash again, starting mid 2018 until now, where Oil is once again crashing. Not predicting whether this or won’t will crash further, but I do find this pretty interesting overall.
- Chinese hard landing issues are on everyone’s mind once again with their currency coming under pressure to stay below the USDCNY level of 7. Similar to 2015, their markets are also under intense pressure and they have a ton of structural problems with far more debt than they had in 2017-2018. Oh, and also lots of political pressure via trade war issues.
- Brexit is back on people’s minds as part of Eurozone problems, and a lot of people are realizing we never really resolved this from back in 2016 as talks break down.
- Emerging markets saw a wave of monetary problems in mid 2018 and were the first to go bearish overall.
So is surprising that almost all the issues we’re facing right now are precisely the same as issues we already faced in the past?
I don’t think it is considering we didn’t really solve any of these issues in the first place.
I have my own views on where things are going, but that’s not the point of this thread really. I just find it very interesting that we’re basically being haunted by the ghosts of our past. It lends credence to those who mentioned that we simply papered over our problems from the past with central bank policies. With that said, it also shows that we can paper over our problems in the past for a time, and there isn’t necessarily a reason to believe we won’t continue to do that in the future.
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