How to embrace the chaos clouding markets

The death of the natural order

For generations, investors like myself have lived by a comforting rule of thumb: if asset prices run too hot, a deep correction or bear market will eventually restore the natural order to markets.

But something happened in 2008, and I was too embarrassed to say it out loud - at the risk of sounding like a lunatic - until a lone wolf with far more credibility, Macquarie Capital’s Head of Global Desk Strategy Viktor Shvets, expressed what I’ve been quietly thinking at Livewire Live in 2025.

“The world really ended around the GFC… anything we assumed prior to that is no longer the case,” he said.

And with the end of the world as we knew it came what looks like the extinction of the traditional bear market.

From last to first resort

Most of us were taught to think about markets in cycles. Economies grow, slow, and contract; asset prices swing from bull to bear; businesses fail, governments step in late, and central banks cut rates in a measured way. Expansion, peak, contraction, trough - and then back again.

But think about it for a moment: what happened to the contractions and troughs? When since 2008 have governments and central banks allowed a meaningful bear market to run its course without rushing in with gargantuan money-printing in the form of quantitative easing, tax cuts or bailouts?

Even COVID was a blip. Tech stocks arguably only fell because of their unusual relationship with rising interest rates - and then bounced back harder. The April 2025 selloff had less to do with fundamentals than with political theatrics.

The playbook has completely changed. Whereas governments once gave the economy a gentle nudge to aid a recovery, since 2008 they have almost become lenders of the first resort. As Shvets put it: 

“Thursday something happens, by Monday morning it’s all fixed. Let’s go for lunch - everything is good now.”

And that’s exactly what we saw earlier this year. On Wednesday 2 April, Trump sparked a market crash - and then, within a week, he chose to resurrect confidence. He even told investors he was going to do it.

Even Canada, the developed economy arguably worst hit by Trump’s policies - with falling house prices and surging unemployment - has one of the best-performing stock markets in the developed world (the TSX is up 27.36% in one year). Why? Because the Liberal government is printing enormous sums to prop up industries being ravaged by tariffs and to bankroll ambitious new projects. After all, who really wants a recession anymore?

From crashes to rolling bubbles

That safety net is why Shvets believes another Lehman Brothers or Minsky moment is unlikely. Instead, markets now function in a world of rolling bubbles.

In the past, one speculative frenzy could drag everything down when it burst. Today, a collapse in one corner is offset almost instantly by gains elsewhere. “If Meta loses 30% of its market cap but Palantir triples, there is no impact on the market,” he explained.

This constant rotation means waiting for bargains in a broad market crash is a fool’s errand. The dips don’t arrive the way we remember, and mean reversion has no anchor without cycles to drive it.

"There is no longer any capital market cycles as they are conventionally defined ... you can have a bull market and a bear market coinciding within 24 hours," he says.

The investor’s dilemma

So what does this mean for investors like us? It means we can no longer count on bargains delivered by deep corrections. It means mean reversion is a ghost story. And it means that waiting patiently for “normality” is a waste of time.

Instead, Shvets suggests three paths:

He also stressed that concentration of returns will remain high. “All the winnings will flow to the winners, while losers get nothing,” he warned. His conclusion was blunt: 

“Assume normality will never come back.”

That’s hard to swallow for those of us raised on the old rules of markets. But if he is right - and the evidence since 2008 suggests he is - then investors who keep waiting for the next big reset are only fooling themselves.

Note: This wire captures the essence of Viktor Shvets’ views on how market cycles have changed, but we strongly encourage you to watch the full video above for the complete context - and for the investment ideas suited to this new world order.