The changing economic data make a recession less of a long shot and more of a real possibility. The standard cyclical recession causes a market correction of about eight months and a market drop of about 20 percent.
Last week’s havoc should be looked at as a warning shot across investors’ bows. The disruptions signal a major change in risk appetites — the willingness of large institutional buyers of stocks to continue accumulating equities. Link to Full Post by Barry Ritholtz.
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