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John Authers

The Day the Fed, Putin and Xi Threw in the Towel

The series of real or putative capitulations was breathtaking, and markets got caught up in the drama.

Jerome Powell’s virtual news conference.

Jerome Powell’s virtual news conference.

Photographer: Michael Nagle/Bloomberg

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Capitulation is one of those rare and exciting moments that offer the greatest opportunities for investors. You might also call it “revulsion”; the moment when an exit from a position turns into a flood, when a selloff becomes cathartic and sets a base for a new rally. Beyond the times when markets collapse under their own contradictions, they can also force important players to capitulate — by forcing finance ministers to give up on a currency peg, for example, or compelling central banks to reverse their monetary policy.