{"id":59889,"date":"2020-03-14T02:15:13","date_gmt":"2020-03-14T09:15:13","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=59889"},"modified":"2020-03-16T21:21:26","modified_gmt":"2020-03-17T04:21:26","slug":"black-coffee-14-mar-2020","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id59889-black-coffee-14-mar-2020.html","title":{"rendered":"Black Coffee: It’s Not a Bug, It’s a Feature"},"content":{"rendered":"

\"\"It’s time to sit back, relax and enjoy a little joe …<\/em><\/p>\n

Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance.<\/p>\n

And the financial crisis rages on, so let’s get right to this week’s commentary …<\/p>\n

There is no cholera, no yellow-fever, no small-pox more contagious than debt.<\/em><\/p><\/blockquote>\n

— Anthony Trollope<\/strong><\/p>\n

Will I say there will never, ever be another financial crisis? No, that would be going too far. But I do think we’re much safer and I hope that it will not be in our lifetimes — and I don’t believe it will.<\/em><\/p><\/blockquote>\n

— Janet Yellen, Fed Chair, 27 June 2017<\/strong><\/p>\n

Credits and Debits<\/strong><\/p>\n

Debit:<\/strong><\/span> Don’t look now but, after 11 long years, the bull market in stocks is officially dead, with the fastest draw down from market-peak to bear-market in history, and the worst start to any year<\/a> since 2009. In fact, in the 15 trading days through this past Thursday, the S&P plunged an astounding 27% from the all-time high it established in late February.<\/p>\n

Debit:<\/strong><\/span> Overall, it was the market’s worst week since 2008<\/a>, while the small caps’ 20% crash is its worst since 1987 — and its three-week plunge of 30% is the worst ever. And the broadest measure of the US equity market — the NYSE Composite Index — ended the week below<\/em><\/strong> its 2007 highs — despite the biggest one-day spike on Friday in 12 years.<\/p>\n

Debit:<\/strong><\/span> Of the Dow’s eight largest daily point losses, six have occurred since February 24, 2020. Wednesday’s ranked number three<\/a>, down 1464.94 (-5.9%) and Thursday’s was number one, plunging 2352 (-10.0%). “Black Thursday” was also the Dow’s fourth largest percentage loss in history, right behind Black Monday on 19 October 1987, and 28 & 29 October 1929.<\/p>\n

Credit:<\/strong><\/span> If you ask asset manager Sven Henrich, he’s warning that, “This is not 2000; this is not 2008 — this is an entirely different beast<\/a>. And its angry; very angry. These next few weeks, days — and even hours — may be absolutely critical.” If he’s right — and I strongly suspect he is — there will be plenty of scenes like this<\/em><\/strong> happening in the coming days and weeks:<\/p>\n