Barely two months after JPMorgan’s Marko Kolanovic previewed the next financial crisis, which he dubbed the “Great Liquidity Crisis”, and which would be catalyzed by the following liquidity disrupting elements:
Decreased AUM of strategies that buy value assets Tail risk of private assets Increased AUM of strategies that sell on ‘autopilot’ Liquidity-provision trends Miscalculation of portfolio risk Valuation excesses … the quant wizard is back in a more conventional form, this time summarizing JPM’s 2018 outlook for equities, volatility and tail risk.
Starting at the top, it may seem otherwise paradoxical – although in the new normal nothing surprises any more – that JPM which holds a near apocalyptic long-term forecast for the world in a derivative context, is also the bank with the highest 2018 S&P target among its bank peers. Here’s Kolanovic:
This post was published at Zero Hedge on Dec 14, 2017.