The peculiar thing about Crude oil price collapse & bloodbath in equity markets across the world is that, no one saw it coming, no one had expectation/expected OPEC+ & Russia fallout would result in so big mrkt crash - Why would b that ? 1/n #marketcrash #COVD19 #IndianEconomy
Such highly volatile markts r real challenges to traders & risk manager even though risk scenarios r built & MTM @ VAR r calculated, despite of that margin calls going to banks/dealers - This has resulted into domino effect 2/n
Are we into a grand lab of behavioral experiment - How could crude oil collapse lead to such a huge loss, today Indian investors lost 11 trillion rupees & Globally mrkts lost $ 5 trillion in last 2 months -thr were no signs of recession or global contagion like 2008 3/n
Neither IMF, WB's financial stability reports not thr celebrity chief economists were able to see,until Jan-Feb they were giving sound bites on fiscal discipline at @wef - now all of sudden, they want coordinated action, QE, rate cut blah blah 4/n
What triggered due to which OPEC+, Saudi Arabia's dialogues fall out w/h Russia on production cut?? What r we missing? Does d world changing fundamentally for slower, clean growth w/h stable inflation -that would be good for climate, a green economic growth w/h peace all over 5/n
Extending d thoughts further,usually multilateral institutes like IMF, WB, UN,WHO were able to see d risk b it economic,financial,health or otherwise- why wouldn't thy forsaw this time when #CoronaVirus was first reported in China, similarly in energy mkts there were hardly 6/n
any risk flags by any analyst on OPEC+& Russia tango failing to extend d crude oil production cut agreed just 6 months ago in middle of 2019 -WHY ths institutions,flag bearers of multilateralism, globalization failed miserably; seems thy r not part of high table consultations 7/n
If so, are we going to see dismantling & big reforms being pushed once US presidential elections r over,probably in #Trump's 2nd term,assuming he wins one - He has been vocal critic of these bodies,has voiced reforms,has blocked many appointments 8/n
Recently attended a lecture by one of dpt MD of IMF,he was trying hard to sell idea of multilateralism to Indians, thr were very few takers in audience, one of eminent faculty said multilateralism is dead, that shows how unappealing it has become in academics 9/n
