The Modern-Day Bank Run

by Doug Noland
Credit Bubble Bulletin

Pondering the shallowness of analyses being espoused by the vast majority of market pundits, I’m compelled to frame a thesis to help explain today’s most extraordinary backdrop. The coronavirus outbreak will eventually pass, though I have serious doubts contemporary finance will pass this test. Suggesting history’s greatest Bubble – that is today in serious jeopardy – is still considered crazy talk. Yet this is the reality so few are willing to contemplate. I expected the Russian Bubble to burst in 1998 with serious ramifications for the leveraged speculating community. Still, I was flabbergasted by the reckless leverage employed by Long Term Capital Management (that nearly brought down the global financial system). They were the smart guys (two Nobel laureates).

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