Kolanovic Unveils His 2018 Outlook: The “Frogs Are Almost Boiled” So Start Hedging

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.

 

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