Contagion: Chain Reactions and the CoCo Powder Keg
Many Happy Returns
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The Holy Trinity of Financial Contagion
The holy trinity of financial contagion, they identify three conditions that need to be in place to get this broad contagion. The first one is an abrupt reversal in capital inflows; the second was surprise announcements or unanticipated events. And the third was a leveraged common creditor, which is something we've mentioned already. But look, I think that if you see these red hot flows, people running into an asset class, you can bet that the opposite's going to happen sooner or later.
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