Markets Are Not Prepared For A Crisis

Authored by Daniel Lacalle,

The most common question among investors these days is when to buy the dip.

Very few market participants seem to be worried about a crisis or deep recession, let alone a nuclear threat.

However, those three scenarios are not unimaginable.

In its Global Data Watch of June 17, JP Morgan says that its internal model only shows a 25% chance of recession in the next year. Furthermore, they clarify that the likelihood would rise to 40% if credit conditions were updated.

Still low, right? We must remember that in January 2008 Reuters reported that “expectations for the weakest consumer spending performance in 17 years during 2008 kept the odds of a recession at nearly 40 percent”.

Deutsche Bank shows that the market this year has fallen in line with the median of post-war recessions. However, the median correction is diminished

Keep reading this article on Zero Hedge - Blog.

Leave a Reply