Is the financial crisis coming?

On 8/5/17, from the CNBC and according to Goldman Sachs, 

• Their model shows an increased 31 percent chance for a U.S. recession in the next nine quarters. That number is rising. But it's a good news, bad news story, and the good news is there is now a two-thirds chance that the recovery will be the longest on record.

• The current expansion has already lasted 95 months, now the third-longest in U.S. history in 33 business cycles going back to 1854, the economists said.

• The Goldman economists also say the medium-term risk of a recession is rising, "mainly because the economy is at full employment and still growing above trend."

On 9/5/17, Goldman Sachs CEO Lloyd Blankfein says the market's low volatility is worrisome.

• "I don't know what brings us out of the doldrums, but I do know this is not a normal resting state," Goldman Sachs CEO Lloyd Blankfein said.

• The CBOE Volatility Index, widely considered the best gauge of fear in the market hit its lowest intraday level since December 2006 on Tuesday.

• Equities have been on a tear lately, trading at record levels, but the S&P 500 has only posted two moves greater than 1 percent in 2017

On 8/5/17, New Bond King, Jeff Gundlach makes bets against U.S. stocks, for emerging markets. He is long the iShares MSCI Emerging Markets ETF and short the SPDR S&P 500 ETF specifically.

It is estimated that the two ETF might have substantial adjustment, which the time frame should be at least about six months time. This indicates that at the end of the year, the trigger point for major correction will be inseparable from the two: the Chinese factors and the uncertainty when the Federal Reserve starts trimming the balance sheet.


What do you think?