Street com they say hit from all sides European Bank stocks swoon to 1988 low leaks about Money Laundering a resurgent pandemic china risks exposure to turkeys financial crisis all in a negative Interest Rate environment that is toxic for banks so the stocks 600. 00 banks and x. Which covers major European Banks slumped 5. 7 percent on monday to close at 81. 00 just a smidgen above the mall 5 decade low of 79. 00 set in march the last time before march that the index was below todays level was february of 1988 during the sell off that followed black monday in october 1907 when it also slumped as low as 79. 00 the index has collapsed by 85 percent since its peak and may 2007 after having quadrupled over the preceding 12 years its looking bad right. I mean 1988 and the connections in 1907 black monday the crash of that year its very important and because the solution then was to extend Bank Credit Facilities thats how Alan Greenspan Ronald Reagan and robert rubin the plunge Protection Te
The solution then was to extend Bank Credit Facilities thats how Alan Greenspan Ronald Reagan and robert rubin the plunge Protection Team or that working group on finance the president S Working Group on finance decided that they would solve this problem by not punishing or reforming but expanding the credit line of these banks so they did exactly what they were doing but on a bigger scale and then we have of course another major move down in 1989 we had a bomb crash more or less 9093 we had the dot com crash in 2000 we had the 2008 subprime crash and each one of these crashes were caused by the exact same thing over indebtedness too much leverage and no accountability no than foresman of regulations by the f. C. C. And then send in others and each and every time the policy from the Central Banks is to expand credit line and say do it again but do it bigger and now in 2020 we. Of now some more thing happening all over again its entirely predictable entirely preventable but as restraine
I am Katie Greifeld in new york welcome to Bloomberg Markets on this friday. You take a look at where the s p 500 stands in trading. Its a red day so far. You can see the s p 500 off about. 6 , slightly worse if you take a look at big tech. The nasdaq 100 off by about. 9 . All the while you can see the volatility rising a little bit if you take a look at the vix. Of course, still at pretty depressed levels, under 15 but getting closer and closer. Im thrilled to say we have a great guest on these markets. We are joined by rob arnott, Research Affiliates founder. Good to see you. Rob good to see you. Katie lets talk about nvidia because you warned in september you saw a big market delusion in nvidia. It was a great company, he wrote, but christ beyond profession perfection but christ beyond if it was perfection that it was priced for then, what now . Rob beyond perfection. Rather than singling out a single stock, its interesting to note that back in 2018, we developed a definition for th
Chips. The chips in this bag and the chips on this rack. I know it sounds like i agimmick. Maybe it is. But if you understand the zeitgeist of this market, if you really want to get it, these two types of chips tell you a great deal of the drama going on in the stock market and in the entire country. So on a good day when the dow advanced 130 points, s p gained 1. 03 , nasdaq jumped 1. 51 hallelujah allow me to explain. Lets start with these chips, the semiconductors. Right now theres a veritable feeding frenzy for the chipmakers. Investors cant eat just one. The etfs are going crazy. Buyers are chomping down on this stuff like piranhas in the amazon basin. Nvidia, obviously the not disputed leader of the group is up 87 year to date and 757 from its lows just 17 months 757 , people. On the other hand, though, this bag of chips is under assault. The price of a bag of potato chips has risen 45 while the cost of producing them has increased by about 40 over the last few years. But unlike
Estevez in that movie. Charles just hope you never have to meet em in real life, theyre rough. Liz charles, thank you very much. Folks, weve got a special edition of the claman if countdown due to multiple plates in the air that are scheduled to start spinning in the next couple of minutes. Weve got stocks right now mixed at the moment. The dow is down 14, s p up 16. It just needs a gain of 19 to hit a new record. Nasdaq up 92. And we are conning to watch this mixed picture, but mostly higher due to the benign inflation read. The 2year yield has been falling in response. Weve got it down 1. 6 basis e points, off the lows of the session. But, look, does anything about that january pce Inflation Report change . Blackrocks bond guru rick reiders timing of the Federal Reserves first Interest Rate cut . Rick is coming up in just a moment the tell you. In the meantime, bitcoin very quickly here continues it epic climb. Coming up in this hour, the ceo of Bitcoin Miner marathon digital is here