We issue a second warning of the global collapse of financial markets due to the repercussions of the war in the Middle East. In the first warning, published on March 4, we noted that:
We are probably currently in the midst of “covert” bailout operations by financial market authorities and central banks. They are usually conducted through hedge funds (etc.) and major banks, where they are “ordered” to buy in exchange for liquidity flows from the central banks or favors from the authorities.
We have seen this “covert bailout” in play, especially when it comes to oil prices in the U.S., Brent crude, and most notably WTI. We also noted in the warning that
Such a “plunge protection” can only work for so long simply because funds are limited (up to a point at least where central banks enact another round of QEs, which is not here yet), and very few institutional investors are willing to keep on buying into a market that is expected to fall further. When this point is reached, the collapse occurs.
Considering what happened in the U.S. markets on Friday, we look to be closing in on that point.
