KC Wealth’s Post

Japan is at a 33% probability of collapse triggering worldwide recession. I think we are closer than ever to a black swan event that can a trigger financial crisis similar to 2007/08. Read the article for all the details. TL:DR. Japan's economic situation and its weight on the US economy can trigger a massive financial crisis. I think the probability of this happening is around 33%. Why? Japan's economy has been living in a lie: - Japan's 5-year GDP growth near zero - Japanese stock market grew 67% despite low GDP growth - Japan's debt to GDP: 263% - 25% of Japan's budget spent on debt servicing - Japan's inflation rate rising - Japan's median age: 48 years old - 33% of Japan's spending on social security - Japan's workforce shrank by 20 million in 20 years There’s no other way for Japan to escape from its tricky economic situation. It’s an escape room with no way out. Japan, being the biggest investor in the US, can drag the US economy down, with a massive stock and bond sell-off, which can trigger another housing crisis similar to 2007/08. https://lnkd.in/g3VVbU6M

A financial tale of 96hrs: News Flow leading to a Tsunami in the financial markets over the past 96 hours has left economists reeling. What initially seemed like a bright day for the global economy on August 1, 2024, quickly took a turn. Japan's interest rate hike to 25 basis points was well received at first. However, on August 2, 2024, news of a potential US recession due to a spike in the unemployment rate to 4.3% in July sent shockwaves through the markets. This was further exacerbated by geopolitical tensions in the Middle East and the delivery of F16 to Ukraine. The subsequent interest rate hike in Japan on Wednesday triggered a tsunami across global financial markets on Monday, just 4 days after the announcement. The aftermath of these events saw the yen appreciating against the greenback as hedge funds withdrew from carry trades, shifting the blame for the rate hikes to Japan. Japan's structural challenges, such as an aging population, rising inflation, and unexpected drops in consumption, indicate no immediate solutions on the horizon. While the Indian economy was in a favorable position, it also faced the impact of Foreign Institutional Investor selling. What seemed like a positive turn for global markets quickly turned into a nightmare within the last 96 hours, leaving a lasting impression on economists worldwide. #financialmarket#globaleconomy

𝗦𝗵𝗼𝘂𝗹𝗱 𝗬𝗼𝘂 𝗦𝗲𝗹𝗹 𝗬𝗼𝘂𝗿 𝗦𝘁𝗼𝗰𝗸𝘀 𝗡𝗼𝘄? The Japanese market has dropped over 10%, a first since 1997. With Japan's interest rate increasing from 0% to 0.1%, the yen is strengthening, pulling money from the stock market. This is causing a bad effect across global markets, including the US, China, and India. 𝗞𝗲𝘆 𝗣𝗼𝗶𝗻𝘁𝘀: ⭕ Interest Rates: Japan raised rates to prevent money from flowing out, strengthening the yen. ⭕ Market Impact: Investors are moving to money markets, leading to crash in Stock market. ⭕ Global Trends: US Nasdaq, Chinese Hang Seng, and Indian markets are all down. 𝗔𝗱𝘃𝗶𝗰𝗲 𝗳𝗼𝗿 𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀: ➖ Profit Booking: If you're in profit, consider booking some now. ➖ Avoid Leverage: Don’t open leveraged positions in this volatile market. ➖ Long-Term Strategy: Use dips as buying opportunities for long-term gains. ➖ Risk Management: Small losses are better than big ones. 𝗠𝗮𝗿𝗸𝗲𝘁 𝗜𝗻𝗱𝗶𝗰𝗮𝘁𝗼𝗿𝘀: India VIX: Up by 50%, showing volatility. USA VIX: Crossed 65, a level last seen during COVID-19. 𝗔𝗱𝗱𝗶𝘁𝗶𝗼𝗻𝗮𝗹 𝗖𝗼𝗻𝗰𝗲𝗿𝗻𝘀: 🔴 US unemployment data is poor 🔴 Ongoing Iran-Israel conflict 🔴 UK inflation worries 🔴 Potential recession 𝗙𝗶𝗻𝗮𝗹 𝗡𝗼𝘁𝗲: Healthy corrections are must for a strong bull run. #Investing #StockMarket #financialplanning #finance #economics #markets

Global markets are experiencing unprecedented turbulence, with fears of a US recession and geopolitical tensions escalating. Japan's Nikkei 225 saw its steepest drop since 1987, but as of yesterday, it has started to regain ground. Meanwhile, the US faces rising unemployment rates. The Bank of Japan's rare interest rate hike and the Fed's potential rate cuts are adding to the uncertainty. What's driving this market chaos, and how is the Yen Carry Trade influencing global investments? Explore the detailed analysis of the current financial landscape and what it means for investors worldwide. Swipe through to uncover the full story! #MarketCrash #GlobalEconomy #Finance #Investing #StockMarket #LinkedInInsights #EconomicTrends"

📉 Are we witnessing a temporary setback, or is this a precursor to a more prolonged economic downturn? Today marks a significant day in financial history as Japan's stock market plunged by 12%, the steepest decline in 37 years. This dramatic fall reflects the escalating fears of a looming US recession and its ripple effects across global markets. As we navigate these turbulent times, it's crucial to analyze the underlying factors contributing to such extreme market volatility.

Global Economic Storm Clouds Gathering! The world is grappling with a series of interconnected economic challenges. Japan's stock market has suffered a catastrophic plunge, triggered by a shift in monetary policy. The Bank of Japan's decision to raise interest rates, ending years of ultra-low borrowing costs, has forced investors to unwind risky bets on the yen. This sudden market turmoil has sent shockwaves across the globe. Meanwhile, the US economy is teetering on the brink of recession. The Federal Reserve's persistent tightening of monetary policy, coupled with rising unemployment and weakening corporate profits, has fueled fears of an economic downturn. Despite these ominous signs, the Fed has been hesitant to cut interest rates, raising concerns about its ability to steer the economy away from a hard landing. This perfect storm of economic uncertainty has ignited a global sell-off, as investors flee to safety. While an outright crisis may be averted, the current situation is highly precarious. The Federal Reserve faces a critical test: it must balance the risks of inflation with the growing threat of recession. Failure to act decisively could have severe consequences for the global economy.

Finance Quicks Reads The " Beauti-fall ". A manic Monday for global markets, with the Japanese Nikkei crashing 12%, the South Korean KOSPI sliding 9% and the Taiwan index collapsing 8% with trading being halted in many regional markets due to the fierce fall. Here are two main reasons that have led to this global meltdown - Fears of a recession in the US - The unemployment rate in the US came in at a near 3 yr high ( 4.3% ) last Friday. Manufacturing data has also been weak and the investors feel that the US Federal Reserve has held rates high for way too long, leading the economy to near recession. Market experts now predict rapid rates cut by the Fed to control the damage. The second reason behind the crash is the Japanese jolt. While the Fed will start cutting interest rates, the Bank Of Japan is actually hiking them as inflation is finally picking up in Japan. This is leading to the unwinding of the so called Yen carry - trade. Basically, it means investors were borrowing cheap in Yen and then investing that money in higher yielding assets around that world. But the Bank Of Japan rate hike has suddenly sent the Yen surging. It's up 10% in the last month, leading to plenty of trading mayhem. The rollercoaster is on and for now, the only thing investors can do is to hold on tight. Do you think if this is the right time to buy? #finance #investing #markets #recession #fall

𝐉𝐚𝐩𝐚𝐧'𝐬 𝐇𝐢𝐬𝐭𝐨𝐫𝐢𝐜 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐑𝐚𝐭𝐞 𝐇𝐢𝐤𝐞: 𝐀 𝐍𝐞𝐰 𝐂𝐡𝐚𝐩𝐭𝐞𝐫 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐆𝐥𝐨𝐛𝐚𝐥 𝐄𝐜𝐨𝐧𝐨𝐦𝐲 After three decades of ultra-loose monetary policy, Japan has finally taken a significant step towards normalization. The Bank of Japan's decision to raise interest rates is a monumental shift that reverberates across global financial markets. This bold move comes amidst growing inflationary pressures and a weakening yen. While the immediate impact on the Japanese economy remains to be seen, it undoubtedly marks a turning point in the country's economic strategy. 𝐇𝐨𝐰 𝐝𝐨 𝐲𝐨𝐮 𝐬𝐞𝐞 𝐭𝐡𝐢𝐬 𝐢𝐦𝐩𝐚𝐜𝐭𝐢𝐧𝐠 𝐠𝐥𝐨𝐛𝐚𝐥 𝐦𝐚𝐫𝐤𝐞𝐭𝐬 𝐚𝐧𝐝 𝐞𝐜𝐨𝐧𝐨𝐦𝐢𝐞𝐬? Potential Impacts: 𝐒𝐭𝐫𝐞𝐧𝐠𝐭𝐡𝐞𝐧𝐢𝐧𝐠 𝐘𝐞𝐧: A higher interest rate typically attracts foreign investment, leading to a stronger yen. This can impact Japanese exports, making them more expensive, which could negatively affect their competitiveness. 𝐆𝐥𝐨𝐛𝐚𝐥 𝐁𝐨𝐧𝐝 𝐘𝐢𝐞𝐥𝐝𝐬: Japan has been a major buyer of global bonds. Reducing its appetite for these assets could push up global bond yields, impacting the cost of borrowing for governments and corporations worldwide. 𝐒𝐡𝐢𝐟𝐭 𝐢𝐧 𝐆𝐥𝐨𝐛𝐚𝐥 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐅𝐥𝐨𝐰𝐬: Investors might reallocate their portfolios to seek higher returns in other markets, potentially affecting asset prices globally. Inflationary Pressures: A stronger yen can help to curb inflation by reducing the cost of imports. However, the overall impact on global inflation will depend on various factors. 𝐌𝐚𝐫𝐤𝐞𝐭 𝐕𝐨𝐥𝐚𝐭𝐢𝐥𝐢𝐭𝐲: The initial reaction to the interest rate hike is likely to be market volatility as investors adjust to the new environment. It's important to note that the actual impact will depend on the pace of interest rate hikes, the overall global economic conditions, and the response of other central banks. #Japan #interest rates #economy #globalmarkets #BOJ #monetarypolicy

What happened in the markets today? The question many investors are having after a turbulent day of selling in the stock market, both in the USA and abroad, particularly in Europe/Japan. The Japanese yen has seen 30 year inflationary highs the past several months which has dramatically shifted the past 4 weeks after the central bank of Japan raised interest rates. The yen gaining on the USD in combination with negative unemployment data last week has triggered selling coming from Japan. This has spilled over into the US markets. Many investors in the US are using this as a call for recession, and that an emergency rate cut by the federal reserve is in order. Who do you look toward first when markets are down? #markets #investing #financialplanning

Japan, US, and China Perspectives https://lnkd.in/e6fNjRPh In this week's edition of 'The Long and Short of the Week Ahead' recorded by Eurizon SLJ Capital for professional investors, Matt Jones and Neil Staines dive into a relatively calm week on the global macroeconomic front, highlighting a key shift in focus from the US to Japan. Japan's CPI for January: A pivotal watch, as discussions around the potential easing of negative interest rate policies unfold. This development could signal a strategic pivot for global markets. Spotlight on APAC: With Australia's CPI on the radar and the RBNZ poised to hold rates steady, the Asia-Pacific region remains a critical piece in the global economic puzzle. Equity Markets and China's Reopening: As we observe high-profile equity movements in the US, the market is also tuning into the economic implications of China's reopening post-New Year festivities. 🇺🇸 US Economic Indicators: The forthcoming PCE inflation data and ISM manufacturing numbers are expected to be key indicators of the US economic landscape. #globaleconomy #macroeconomics #investing #podcast #japan #china #inflation #growth