Celebrated Allianz economist points to GameStop and hedge fund debacles as potential market torpedoes.
Mohamed El-Erian customarily is not an alarmist. But he notes that the Archegos Capital Management mess is “the third near-accident this year so far.” Meaning something that could’ve trashed the entire financial system.
To El-Erian, Allianz’s chief economic adviser, the collapse of family office Archegos Capital Management is a “one-off,” but it may lead to a tightening of credit as banks become more cautious.
On the plus side, he doesn’t detect a “fast-moving contagion” that will tank the entire stock market, and contended in a Yahoo Finance video appearance that “for now, it looks contained.”