Related Topics
Investing , ETFs , Stocks
Share This Page         

Epic, Worldwide Financial Complacency: "What a Difference a Decade Makes"

Financial observers return to the economically confident days of 2007

by Bob Stokes
Updated: October 12, 2018

The exact same words. Eleven years apart. Almost to the day.

Here's what I'm talking about:

On Oct. 9, 2007, a headline published in the Wall Street Journal that said:

No Recession in Sight

Ironically, that was the very day of the historic stock market top, which was followed by not only a recession, but the Great Recession.

On Oct. 10, 2018, after the DJIA closed down more than 800-points, this headline appeared on the website of a Washington D.C. newspaper (Washington Examiner):

Stay calm, there's no recession in sight

That opinion might turn out to be correct this time around versus 11 years ago. Then again, EWI has observed that such complacency is often a prelude to rocky financial and economic times.

Indeed, there are other signs of complacency, as depicted by this chart and commentary from our October Global Market Perspective:

What a Difference a Decade Makes

The top graph on this chart depicts 1-year euro-dollar currency swaps, which are contracts to exchange principle and interest payments over 12 months. (The scale is inverted to make the three graphs comparable.) In 2008, trust in the money markets evaporated to such an extent that virtually no one felt safe exchanging these debt payments. ... Two months ago, rates sank back below 10 basis points, indicating a widespread and pervasive complacency.

The middle chart of Libor-OIS paints another picture of business as usual, as does the bottom chart of the U.S. 2-year swap spread. ... In September, the spread fell to just 19 basis points, as the 2-year U.S. Swap Spread dropped to about 17.

This list of financial complacency signs is by no means exhaustive. EWI has observed and listed many more.

Plus, keep in mind that financial complacency is not the only factor that EWI studies.

Our global analysts are looking at debt levels, chart patterns of 40+ financial markets worlwide and the details of overall speculative activity. Moreover, they put all this "must know" information into a valuable historical context.

You are strongly encouraged to see what our global analysts see.


When Volatility Rattles Global Markets and Investors -- You Can Be Confident

It's a matter of being prepared -- AHEAD OF TIME. That's what our Elliott wave experts can do for you.

You see, they've studied the global stock indexes for four decades, and here's what they've learned: Chart patterns repeat themselves at every degree of trend. That means we can forecast the trends and turns of the 40+ global markets we cover.

Find out what our Elliott wave experts expect NEXT -- risk-free! Keep reading to learn more ...

Here’s how Global Market Perspective helps you see and take advantage of the world’s best opportunities -- starting right now

GMP is your window into EWI’s most important insights -- the patterns of human psychology that drive the markets. You get a quick-hitting, chart-led overview of every major stock index, interest rate, currency, metal, energy market and economy. ALL the world’s major markets, ALL in one issue.

You get a 360-degree perspective you cannot glean from any other publication -- and a powerful advantage over your peers. And with instant access to the current issue, plus the previous two issues, you'll get up to speed--fast.

Our 25+ wave analysts deliver their monthly forecasts to you. They are experts in Elliott wave analysis, a method our subscribers know is unequalled in its objectivity. The Elliott wave principle enables GMP to call for rapid accelerations and sudden price reversals that no other method can foresee.

GMP keeps you ahead of 40+ markets*, including:


Stock Indexes


U.S. - DJIA, S&P 500, NASDAQ

Europe - DAX, FTSE 100 & 250, CAC 40, AEX, SMI, IBEX 35, S&P/MIB, Dow Jones Euro Stoxx 50, RTS and CECE Overall Traded Index

Asia-Pacific - Nikkei 225, Shanghai Composite, SENSEX, Hang Seng, All Ordinaries, Strait Times Index, KOSPI and TAIEX

Forex


EURUSD, GBPUSD, USDCHF, USDJPY, AUDUSD, USDCAD, USDMXN, USDRUB, USDBRL, USDZAR, EURJPY, EURCAD, EURGBP, GBPJPY, NZDUSD and AUDJPY

Interest Rates


U.S. Treasuries, Bund, Bobl, Long Gilt, Euribor, Short Sterling, 10-year Australian Bonds, 10-year JGBs

PLUS Gold, Silver, Crude, Natural Gas, and more
(* Markets may vary depending on market movement)

If you care about global markets, you can’t live without Global Market Perspective.

Discover What Happens When You Put EWI's 25+ Team of Analysts to Work For You

There is nothing on the planet like Global Market Perspective. And right now, when you add GMP, you'll also get access to Elliott Wave Trading: Principles and Trading Strategies, a $60 value, free. In this streaming video, popular analyst and trainer Jeffrey Kennedy teaches you his methodology. After watching it, you'll make market decisions with far more confidence.

Start Your Subscription Now

$49

for instant access to the current issue of Global Market Perspective, plus your free resource

*Existing EWI Subscribers may qualify for an additional, exclusive discount on this service.

“Cash Is Trash”? Look at This Chart.

Corporate Investors Are Awful Market Timers – Here’s Why

The Public Buys the Dip, the Rally – and the High?

Why the World of Investing Often Seems Wacky

Why Sometimes, "Beating the S&P 500" Isn't Good Enough

Learn Why Diversification is Dangerous During This Economic Condition

Using Elliott Waves: As Simple As A-B-C

Basic Tenets of the Elliott Wave Principle