Five charts to start your day

Could a financial tsunami be about to hit?

Things just seem a little bit too calm at the moment, and I've been feeling this ever since the start of this year. It's a bit like going to the beach and finding the water is as still as a swimming pool. Something just doesn't quite feel right about the calmness, and there's a niggly concern that you might just be about to get hit by a tsunami.

Let’s take this first chart as an example. The Bank of America's latest survey reveals a seismic shift in investor concerns: shadow banking has dethroned commercial real estate as the bogeyman du jour.

This $2.1 trillion behemoth, lurking in the regulatory twilight, now keeps more fund managers awake at night than the creaking office towers of post-pandemic America. Jamie Dimon's dire warning of "hell to pay" echoes ominously through the corridors of finance. Yet paradoxically, 68 percent of investors still expect a “soft landing” for the global economy.

Such cognitive dissonance is reminiscent of pre-2008 complacency. As shadow banks gorge on high-yield, high-risk assets, and $1 trillion in commercial real estate debt teeters on the brink, you cannot help but wonder: is this optimism well-founded, or merely whistling past the graveyard of past financial follies? The ghosts of Lehman Brothers might suggest the latter.

Source: Yahoo Finance

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