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Report: JPMorgan's quant warns of possible financial crisis


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Report: JPMorgan's quant warns of possible financial crisis

Marko Kolanovic, JPMorgan Chase & Co.'s global head of quantitative and derivatives research, has predicted a financial crisis that he calls the "Great Liquidity Crisis," CNBC reported, citing Kolanovic's report that was sent to JPMorgan clients.

According to the report, the forces that have changed markets in the past 10 years, specifically the rise of computerized trading and passive investing, are setting conditions for possibly violent moves once the current bull market ends.

Kolanovic in his report also explained how the major market trends that took place after the financial crisis of 2008 worsen selling during moments of panic. He also said that the enormous move of about $2 trillion to passively managed investments from actively managed investments has removed a pool of purchasers who can dive in if valuations slump, according to the news outlet.

The exact timing of the next crisis according to Kolanovic cannot be ascertained, and the markets seem to be safe through the first half of 2019.