the chart speaks for itself. Please note while he says imminent,
that could mean months. It really just goes to what Steve and
I have been saying, the longer term charts show that we have a
significant top in place in Sept and are in early stages of a bear
market
BofA CIO Michael Hartnett shows the near record 295bps spread
between Libor-Euribor which was last seen on two occasions: the
first time in October 99, just before the bursting of the dot com
bubble, and the second time in 2006 - just before the US housing
bubble burst and ushered in the global financial crisis.
It is this spread that is the "tell" that a flash crash is
imminent.
Posted by ruscitti on 18th of Nov 2018 at 09:12 pm
Matt, thought I would help explain why this chart is so
important since you mentioned it in the newsletter. The
spread measures the difference between where Banks can raise
3 month money in US dollars (LIBOR) vs where Banks can raise 3
month money in Euros (EURIBOR). The large spread exists since
3 month EURIBOR is still negative (-30 bps or so) vs 3 month
LIBOR at around 2.65%. The spread being so wide means
largely one of two outcomes: 1) the European economy heats up
forcing European rates to move higher and faster than US dollar
LIBOR - a very unlikely scenario or 2) US LIBOR
stops increasing and begins to pull back in toward European rates,
which would be indicative of a slowing US economy.
Near record 295 bps (basis points) spread between the Libor-Euribo
Posted by matt on 16th of Nov 2018 at 02:55 pm
the chart speaks for itself. Please note while he says imminent, that could mean months. It really just goes to what Steve and I have been saying, the longer term charts show that we have a significant top in place in Sept and are in early stages of a bear market
BofA CIO Michael Hartnett shows the near record 295bps spread between Libor-Euribor which was last seen on two occasions: the first time in October 99, just before the bursting of the dot com bubble, and the second time in 2006 - just before the US housing bubble burst and ushered in the global financial crisis. It is this spread that is the "tell" that a flash crash is imminent.
Matt, thought I would help
Posted by ruscitti on 18th of Nov 2018 at 09:12 pm
Matt, thought I would help explain why this chart is so important since you mentioned it in the newsletter. The spread measures the difference between where Banks can raise 3 month money in US dollars (LIBOR) vs where Banks can raise 3 month money in Euros (EURIBOR). The large spread exists since 3 month EURIBOR is still negative (-30 bps or so) vs 3 month LIBOR at around 2.65%. The spread being so wide means largely one of two outcomes: 1) the European economy heats up forcing European rates to move higher and faster than US dollar LIBOR - a very unlikely scenario or 2) US LIBOR stops increasing and begins to pull back in toward European rates, which would be indicative of a slowing US economy.
ruscitti - THANK YOU... that's
Posted by isplat on 19th of Nov 2018 at 07:38 am
ruscitti - THANK YOU... that's exactly the explanation I was after!