As you probably heard the Argentine peso fell 11% against the USD causing some big moves in other currency pairs and a big reaction in equity markets.
The nature of past currency crises (1994, 1997 and 1998) is that they have caused fast declines in equity prices. As we have looked at countless times since the start of this blog, the history of fast declines is that they tend to retrace reasonably quickly.
This time could of course be different but there have been currency crises in the past and the market behavior in the past has been similar. This is the type of market event where it makes sense to have a sense of history.
The picture is from the east entrance to Yellowstone National Park. I’ve seen a few park entrances here and there but none anywhere near as neat as this one.