This Quarter Was Different: The Big Reversal

We’ve been all over the “Big Reset,” which is upending many things.  It’s disheartening to hear most of the Street analysts speak as if nothing has changed but prices. 

All things as we have known and have become comfortably numb with, such as zero interest rates, negative real interest rates, quantitative easing (digital money printing), [Chimerica, a placid labor market, trade and investment flows] and Pax Americana, [and central bank dominance of the U.S. bond market] are being upended and overturned.  Beware of recency bias, folks, as the global structural shifts and changes are now ubiquitous. – GMM, Sep 23rd

Here’s an example of how markets are convulsing to the Big Reset.  

“Painful Regime Change”

The third quarter will also get its place in the history books for one of the biggest reversals: It is the first quarter since 1938 that the S&P 500 Index closed in the red after gaining more than 10%. 

All in all, 2022 is the year that reflects a “painful regime change,” said Michael Hartnett, BofA’s chief investment strategist. – Bloomberg

Nowhere To Hide

Even during the Great Depression, bonds made money, but not in stagflation, including during the 1970s.  There has been nowhere to hide this year. 

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