Summary
Akhil details the August 2024 market turbulence. The VIX hit 60 (second highest since start of current cycle; March 2020 was highest). US markets fell August 2nd and 5th, but Japan’s Nikkei fell 12.4% on August 5th — largest daily fall in 37 years. August 5 was a seasonal midpoint date between June 21 solstice and September 21 equinox. The cause: yen carry trade unwinding (BOJ raised rates 0% → 0.25%, yen appreciated 10% vs. dollar). Weak US jobs data stoked fears of Fed error. August is a thin month with amplified reactions. This is a lesson about speculative activities in late-cycle phases.
Key Claims
- VIX hit 60 in August 2024 — second highest since current cycle began. — confidence: high
- Japan’s Nikkei fell 12.4% on August 5, 2024 — largest daily fall in 37 years. — confidence: high
- August 5 is a seasonal midpoint date (between June 21 solstice and September 21 equinox). — confidence: high
- Cause: yen carry trade unwinding (BOJ raised rates from 0% to 0.25%). — confidence: high
- August market turbulence is a lesson in how late-cycle speculative trades can unwind violently. — confidence: high
- The falls were arrested; August 5 appears to be the low point. — confidence: high