IMCV - Weekly Commentary: Global Quagmire

• The Global Bubble, several decades in the making, is in the process of bursting. A new cycle is emerging, replete with extraordinary uncertainties.
• Mainly, nervous markets were comforted by the focus on “financial conditions.” The Fed’s hawkish tightening cycle is on a Collision Course with faltering Bubbles, De-risking/Deleveraging Dynamics and serious liquidity issues.
• China’s historic apartment Bubble is bursting, the Chinese Bubble Economy is faltering, and “Covid zero” is right there nudging things over the cliff.
• The Fed’s “US Marketable Securities Held in Custody for Foreign Official & International Accounts” sank $36.1 billion this past week, the biggest decline since the market panic in late March 2020.
• It’s a bad cycle of broad-based market weakness, currency instability, Treasury selling and illiquidity. The tightening of global financial conditions has accelerated.

For further details see: