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Thirty-Six Minutes of Chaos: Analyzing the Flash Crash

Fourteen years ago, the Dow Jones plummeted 9%, wiping out almost $1 trillion in market value almost instantly. This infamous event, known as the "Flash Crash," jolted the financial world, prompting significant regulatory reforms.   This week, we’ll examine this recent chapter in financial history. Have these changes truly addressed the underlying issues in the [...] READ MORE

How Do People’s Experiences of Inflation Differ?

The Issue: Inflation rates are among the most closely watched economic statistics, but, as with many statistics that attempt to capture what is happening throughout the economy, aggregate measures mask important particulars. Measuring inflation requires simplifying assumptions about the basket of goods that a typical consumer purchases in a given month as well as eliding [...] READ MORE

A recession in early 2025 could send the stock market tumbling 30%, strategist says

A recession by early next year could send stocks down 30%, says BCA strategist Roukaya Ibrahim. Continued unemployment and headwinds from China's limping economy will be drivers of a downturn.   Wall Street veteran Gary Shilling holds a similar forecast, he told BI this week.   There are two factors signaling a recession by year-end [...] READ MORE

Gold Market Commentary: Higher-for-longer: Inflation not growth

New-high fatigue?   Gold had another good month in April, posting a 4% gain and ending the month at US$2,307/oz. Unlike March, gold finished off its intra-month high from probable buyer reticence and profit-taking – reflected in falling Chinese premia, lower Indian imports and flat-lining COMEX positioning. On the flipside, the trend in North American [...] READ MORE

Americans have spent their savings. Economists worry about what comes next

Americans saved about $2.1 trillion during the pandemic. Now it's all gone. Americans saved quite a bit of money during the pandemic: $2.1 trillion worth, to be exact.   That extra cushion meant that consumers kept spending in the years that followed and the economy remained robust despite rising interest rates and persistent, though gradually [...] READ MORE

Time To Bet Against Banks

Why Bet Against Banks Now? Two main reasons. First, the Federal Reserve’s new, post Silicon Valley Bank collapse assistance program, The Bank Term Funding Program (BTFP), has expired. And second, the Fed’s first rate cut—initially expected in the first quarter of this year—has been pushed off indefinitely due to persistent inflation. So banks still have [...] READ MORE

Lag effects from the past are driving inflation today

It has been three long years since inflation first ripped upward. But the inflation data in 2024 is, in important ways, being driven by that initial series of economic disruptions that took place in 2021 and 2022.   Why it matters: In one sense, this is good news — it implies that once these lag [...] READ MORE

Oil Erases Losses as Stockpile Decline Signals Tighter Market

Oil erased earlier losses after government data showed a decline in US stockpiles, signaling a tighter physical market.   West Texas Intermediate traded above $78 a barrel as crude oil inventories fell by 1.36 million barrels, according to the Energy Information Administration. The pop shows that traders are taking the news as the first bullish [...] READ MORE

FOREX Dollar gains on rate outlook, yen weakens for third day

Japanese yen and U.S. dollar banknotes are seen with a currency exchange rate graph in this illustration picture taken June 16, 2022. The dollar gained on Wednesday as investors continued to bet on the U.S. economy outperforming peers and was higher for the third day against the Japanese yen, keeping investors wary of the risk [...] READ MORE