20-02-21 Overstretch

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Markets have paradoxically both been on edge - and in the throes of euphoria - since the repo shock in mid-September, being both alarmed and yet strangely reassured by the Fed's frantic backpedalling and the $400+ billion boost to its balance sheet which this entailed.
However, at a time when an already faltering flow of business revenues across the major nations has now to weather the unquantifiable, but potentially far-reaching, disturbance of the China coronavirus outbreak, the margin for error seems slim.
Extreme levels of overstretch are everywhere apparent.

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