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Risk Of Minsky Moment High With ‘Airplane In A Tailspin’
Even if the Fed decided to lean decisively dovish this week, it may not matter. The die may be cast.
US monetary policy is "likely already past the point of no return," JPMorgan analysts led by Marko Kolanovic said Monday, in a fatalistic-sounding note.
They can hardly be blamed for adopting a cautious cadence. Events in the banking sector presage tighter lending standards and a higher cost of capital at best -- at worst, this is an existential moment for all but the largest banks, and even on
Kinda ironic that Marko is talking about Minsky moment and tailspin while his Boss is trying to restore confidence in First Republic Bank whose stock is down approx 45% as I wrote this.
There’s no relation between those two things whatsoever. I mean, the fate of First Republic doesn’t depend on the tone of the opening paragraph from this week’s research digest.
a vp asked me once (i was chief staff) – ‘is it a rumor or fact?’ His point if rumor, we’re screwed; if fact, we can fix (in time). All the press outputs recently if nothing else will fuel rumor (sentiment). If I’ve learned anything the last 24 months in the market – acceleration beyond history and sentiment rules … sentiment is negative off the charts it seems, maybe even merited which would mean fighting fact AND rumor … buckle up.