Trader Warns (Again): The Next Crisis Won’t Be Like The Last One

Via Kevin Muir of “The Macro Tourist” fame Lately, one of my biggest duds of a call has been for the yield curve to steepen. Sure, I have all sorts of fancy reasons why it should steepen, but reality glares back at me in black and white on my P&L run. Sometimes fighting with the market is an exercise in futility. Now I know many of your eyes glaze over when I start talking about different parts of the yield curve flattening or steepening, but I urge you to stick with me, as the fat

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One thought on “Trader Warns (Again): The Next Crisis Won’t Be Like The Last One”

Timing is everything…isn’t it? Steepening of the yield curve could have lots of causes. My take is that when this enormous stew of asset bloated crap boils over and out it will happen VERY VERY fast…there will be a likewise fast response that will be viewed as largely papering over bullshit (in other words it will not be commensurate with the widening severity of the problem)..and then it’s down even harder….

What is different this time is that in 2008 there could be meetings and strategy sessions
and some time for Hank Paulson to work his magic. I don’t believe anyone is going to have that luxury in a financial universe where the next panicky seller is a nano second away..the Fed KNOWS this..that’s why they’ve been so cautious (afraid) on rate hikes and asset sales. Big players have a lot of gains to protect and the first one out the door wins the most…and they ALL know this.