Market Crash 1987?
The Death of Stupid ?
Debt the ultimate participation trophy ?
Keynesian black hole?
the staff of the Ridgewood blog
Stocks aren’t quite as immune to financial disruption in the middle of 2015 as they had been previously. The last major, comprehensive selloff was also in tandem with “dollar” disorder back last October 15. This time, the motion was more erosion than “event”; at least until the past week. Just like crude oil, stocks lost their momentum back in early May (and broader index price indications dating back to last July and the first “dollar” rumble) and had more or less been stuck like the yuan doing nothing until the open break recently.
“Savage Speed” – A Look Inside Market Crash Statistics
Submitted by Salil Mehta via Statistical Ideas blog,
It was surely a frightening week in global financial markets. The largest 500 American stocks (S&P) dropped 6%. China’s Shanghai Stock Exchange (SSE) doubled this risk, as it dropped 12%. Now there is an overall fear in the markets that we have not seen in years. While these perilous risk statistics should not be something new, thesurprising jolt this week provides a renewed opportunity to review crash measures within a broader context, to boldly target your portfolio.
Let’s look at the worst weekly loss for the S&P, in each month from 2007 through August 14 (or right up until last week). Geometrically approximated for symmetry. We see in blue that the distribution of this monthly “worst weekly loss” has generally been similar to the same ranked values from the past couple of years (2103/2014). Now towards the bottom of the chart we can better ascertain that the more severe “worst weekly losses”, were even worse in the years earlier than this (so 2007 through 2012).
We’ll prove out these numerical measurements here, but if you are dispassionate about the mathematics then don’t fear. Please just skim what is immediately below -and head straight to the first illustration afterwards- to continue reading. In October 2008, the worst weekly risk was -20% (this makes October the 24th worst month for “worst weekly loss” of 24 months in 2007/2008). Hence it is plotted in red ~98 percentile at the bottom of the vertical axis below. Not perfectly the 100th percentile (0% rank) due to probability math. Also in the same 2007/2008 series, the next worst month for the “worst weekly loss” statistic was the following month of November. That month saw a -9% change and being 2nd worst out of 24 means being ranked about 4% higher on the vertical axis, from where the -20% data is shown:
Global Trade In Freefall: Container Freight Rates From Asia To Europe Crash 60% In Three Weeks
Submitted by Tyler Durden on 08/23/2015 12:42 -0400
Three weeks ago, when we last looked at the collapse in trade along what may be the most trafficked route involving China, i.e., from Asia to Northern Europe, we noted that while that particular shipping freight rate Europe had crashed some 23% on just one week, there was some good news: at least the Baltic Dry index was still inexplicably rising, and at last check it was hovering just above 1,100.
That is no longer the case, and just as with everything else in recent months, the Baltic Dry dead cat bounce is now over, with the BDIY topping out just above 1200 on August 4, and now back in triple digit territory, rapidly sliding back to the reality of recent record lows which a few months ago we suggested hinted that much more is wrong with global trade, and the global economy, than artificially manipulated stock markets would admit.
Debt Is Good: For Funding The Greatest Participation Trophy Ever Created
Submitted by Mark St.Cyr,
As the capital markets from Shanghai to New York were melting down in ways hearkening back to the early days of the prior financial crisis – a period of time many would like to forget (or act) as if it never happened – the Nobel Laureate economist Paul Krugman decided it was time once again to weigh in with what will surely be viewed by the so-called “smart crowd” as a brilliant perspective on what ails the world: Not enough debt.
The title of his Op-Ed in the New York Times™ seemed to borrow directly from one of Wall Street’s most celebrated fictional characters Gordon Gekko when he delivered the now immortal line “Greed, for lack of a better word: Is good.” For Mr. Krugman however, there was no need of a “better word” qualifier. He came out blazing with what seems the only bullet in his arsenal as a cure-all for what ever the ailment might be (e.g., debt.) as he argues this view in his latest: Debt Is Good.
As I read, I found myself repeatedly either laughing, or with my head in my hands. What seemed lost on Mr. Krugman was the irony of not only his timing, but also the glaring front-of-mind examples real people, with real issues, currently have that are entirely interchangeable as to replace his call for action; and replace it with the actions they are currently living through. All of which are both suggested as well as endorsed by him and his ilk.