> Is there a particular kind of asset, the collapse of which will seal this drop as a proper depression ?
That's a good question. Right now the market is reacting to on-the-ground realities. The follow-on question you are asking gets to: what will be the aftershocks?
The thing that I'm concerned about is the amount of risky business loans[1] that have been handed out in the past decade because rates were so low and mutual funds were looking for high returns. If a lot of businesses go bankrupt and that, in turn, puts the banking system at risk, then things would be ... bad.
[1] including businesses taking "no covenant" loans to—in some cases—pay their earlier investors dividends!
That's a good question. Right now the market is reacting to on-the-ground realities. The follow-on question you are asking gets to: what will be the aftershocks?
The thing that I'm concerned about is the amount of risky business loans[1] that have been handed out in the past decade because rates were so low and mutual funds were looking for high returns. If a lot of businesses go bankrupt and that, in turn, puts the banking system at risk, then things would be ... bad.
[1] including businesses taking "no covenant" loans to—in some cases—pay their earlier investors dividends!