Are we headed for 2008 level volatility?

M

mercury-croc

Very few trading strategies that work in “normal” market conditions worked well in the 2008 crash.

Should we expect the same market unreliability in 2022?

Cheers for your thoughts
 
Just mentioned this in another thread, but how many people stretched for yield and bought equities because, thanks to the Fed, treasuries pay nothing. The TINA trade...except that some people should not have been in equities based on their investment horizon. If so, then what happens when that crowd finally panics and dumps equities to preserve captial?
 
mercury-croc said:
Very few trading strategies that work in “normal” market conditions worked well in the 2008 crash.

Should we expect the same market unreliability in 2022?

Cheers for your thoughts
More...

Looks like it but maybe not lasting as long
 
mercury-croc said:
Very few trading strategies that work in “normal” market conditions worked well in the 2008 crash.

Should we expect the same market unreliability in 2022?

Cheers for your thoughts
More...

possibly but it won’t be the result of a recession or of inflation. You need a proper credit/liquidity shock to cause that kind of volatility.
 
newwurldmn said:
possibly but it won’t be the result of a recession or of inflation. You need a proper credit/liquidity shock to cause that kind of volatility.
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businesses that were built on lower interest rates will no longer make sense at higher interest rates.. there will be a deleveraging .. plus as they dry up the money supply it will squeeze corporate earnings... liquidity shock i think so... debt is leverage.. the ability to go into larger amounts of debt is based on the interest rate.. so some debt will be unsustainable.. all kinds of malinvestment going on as well with all the EDIL and PPP money .. investments in business devices that won't be viable in a recession...
 
Perhaps. But that might not cause a systemic liquidity event.

cdcaveman said:
businesses that were built on lower interest rates will no longer make sense at higher interest rates.. there will be a deleveraging .. plus as they dry up the money supply it will squeeze corporate earnings... liquidity shock i think so... debt is leverage.. the ability to go into larger amounts of debt is based on the interest rate.. so some debt will be unsustainable.. all kinds of malinvestment going on as well with all the EDIL and PPP money .. investments in business devices that won't be viable in a recession...
More...
 
mercury-croc said:
Very few trading strategies that work in “normal” market conditions worked well in the 2008 crash.

Should we expect the same market unreliability in 2022?

Cheers for your thoughts
More...

Inflation is not a long term issue and certainly not like a banking crisis. TSX ( Canada ) down 5% ytd. Anyone calling for US indexes to crash are basically betting that the US economy is one of the weakest on the planet with no hope of weathering "inflation". I look at full employment, corporate earnings of the best firms, and I just don't buy this thesis. Late 2022 will be very similar to late 2016 imo.
 
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mercury-croc said:
Very few trading strategies that work in “normal” market conditions worked well in the 2008 crash.

Should we expect the same market unreliability in 2022?

Cheers for your thoughts
More...

Maybe/probably.... once the majority of players recognize and accept that it's a bear market. (So far they act with disbelief, though annoyed a bit.)
 
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