Il Duce's point in the State of the Nation last night was, "Hey, don't worry, be happy." It was a stinker salvaged only a bit by Knock-Out Nikki, the governor of South Carolina, who gave a ridiculous response blaming her own party and leaving mouths so agape that the silliness of Obama's babbling was all but forgotten.
As if on cue, everything in the world today was a stinker (save for the Iranians releasing the U.S. sailors, unmentioned in last night's speech as predicted), almost as if to say, "this is what we are worried about." The DOW closed down 365 and the 10-year closed at 2.07%. The worst part was that every sector was down as the equity markets went into a totally "risk-off" mode and the flight to quality was intense. Overdone? Probably, but people were looking to positive signs somewhere and found none.
Will this continue? Beats me but part of the problem is that people are beginning to realize that this time there is no institution that can turn the tide. The Fed is done; it is out of bullets and there is no one familiar to whom one can turn for relief. We re being rushed into a brave new world and therein lies the nexus of the fear. There is also the growing belief that we have not exactly been told the truth about the true state of things either by our leaders or by the all-compliant press. Trust is waning and that is the greatest fear of all.
Anyway, that's the story for today: tomorrow J.P. Morgan reports and maybe we can get back to the real purpose of this blog. I hate writing about politics but at this point in time it seems to be the the influencer (is that a word?) of all things. An all-around stinker of a day.
Showing posts with label Global Markets. Show all posts
Showing posts with label Global Markets. Show all posts
Wednesday, January 13, 2016
Monday, August 24, 2015
WELL!
I actually got up early to watch this unfold because by the time I went to sleep last night Asia was a catastrophe and the writing was on the wall. It was something. It reminded me of 1987. Shares were being "paused" right and left (we didn't have that in '87) and no one had a handle on where this was going. At one point the DOW was down almost 1100 points but I'm not telling you anything you don't already know.
Nor can I tell you anything about what's going to happen except that I don't think it's over. One of the "optimists" on TV this morning predicted another bad day on Tuesday and then the "snap back" which always occurs. That makes sense in a single over-bought market but I don't think that's what we have here. I'm looking at a crisis of confidence that has become quite global in nature, The release of the Fed minutes started it as it was clear that mob had no agreement on anything and gave the distinct impression that they really didn't understand what was going on anyway. That was bad enough but the Chinese, who everyone thought ruled the nation with an iron fist proved that there was more iron in their brains in the matter in which they have handled their finances over the past few month and in the ineptness over the past week. The Euros haven't exactly covered themselves in glory for a while now and the administration in this country has been playing golf. When people world-wide start asking, "Is anyone in charge," that is never a good sign.
We have always said that in the financial world if one loses credibility one is lost. Today there is no credibility anywhere. There is also a growing sense of fear. In the midst of the morning's carnage I saw a print for GE that scared the hell out of me. 20. GE is a hell of a good company. Somebody (s) was selling the hell out of GE. You don't sell GE into a market like this to that extent unless you have to get liquid in a hurry. Oh no, thought I, we're going to lose somebody right now. Fortunately, we did not but if you think this liquidity issue on which I have been harping for months now is not real, think GE. And think debt markets. A couple of more days like this and there could be some real shocks among the hedgies and if there are shocks there how far behind will be the banks?
Look, I don't know what is going to happen so there is no point in continuing. However, it must once again be said that trying to deal with a global economy this complex with monetary policy alone while witnessing the absolute abdication of the fiscal and political forces is insane. I'm afraid we might find out just how insane this is.
More tomorrow.
Nor can I tell you anything about what's going to happen except that I don't think it's over. One of the "optimists" on TV this morning predicted another bad day on Tuesday and then the "snap back" which always occurs. That makes sense in a single over-bought market but I don't think that's what we have here. I'm looking at a crisis of confidence that has become quite global in nature, The release of the Fed minutes started it as it was clear that mob had no agreement on anything and gave the distinct impression that they really didn't understand what was going on anyway. That was bad enough but the Chinese, who everyone thought ruled the nation with an iron fist proved that there was more iron in their brains in the matter in which they have handled their finances over the past few month and in the ineptness over the past week. The Euros haven't exactly covered themselves in glory for a while now and the administration in this country has been playing golf. When people world-wide start asking, "Is anyone in charge," that is never a good sign.
We have always said that in the financial world if one loses credibility one is lost. Today there is no credibility anywhere. There is also a growing sense of fear. In the midst of the morning's carnage I saw a print for GE that scared the hell out of me. 20. GE is a hell of a good company. Somebody (s) was selling the hell out of GE. You don't sell GE into a market like this to that extent unless you have to get liquid in a hurry. Oh no, thought I, we're going to lose somebody right now. Fortunately, we did not but if you think this liquidity issue on which I have been harping for months now is not real, think GE. And think debt markets. A couple of more days like this and there could be some real shocks among the hedgies and if there are shocks there how far behind will be the banks?
Look, I don't know what is going to happen so there is no point in continuing. However, it must once again be said that trying to deal with a global economy this complex with monetary policy alone while witnessing the absolute abdication of the fiscal and political forces is insane. I'm afraid we might find out just how insane this is.
More tomorrow.
Friday, August 21, 2015
YOU CAN START WORRYING
...BUT BEFORE
Internet service is in awful shape throughout this part of the fly-over zone at least, so that is why I've been experiencing such difficulty. I don't know whether this will make it out tonight so I'll save the good stuff til Monday.
World-wide equities were slaughtered today for all of the same reasons...and none of them. Today, even in the midst of August, the volume on all markets picket up which is an indicator that the gang is beginning to pay attention to what is going on and worst yet, the VIX, the index of volatility, doubled. They tell me this is a bad thing but my reaction is if every body's trying to get out the exit at the same time, what do you expect. An almost 500 point drop in the DOW isn't quite the end of the world but it sure isn't a happy thing at which to look. Nor can it be called a true portrait of the world's over-all economic condition; I don't know what to call it but the smart guys keep telling me that.
What troubles me the most is that I get the distinct impression in speaking with those still at their desks is that what has everyone worried is the Big Unknown. Things in the markets have gone to crap but so far, so far we have not heard of any major corporate losses. A lot of people are asking, "why not" in light of past experience. I am as well and I don't like Fridays because everybody waits for Friday to come out with bad news. If we do have an event this weekend in a perverse way it may be a good thing as it will release the pressure in the kettle. Let's hope not but there is a better than even chance at this stage that we are going to face something...if not now in the near future. We should also look for a gathering of the Wise Men from around the world. These days one doesn't have to hop on a plane to accomplish that (although they love to do that), one can simply do it by the Internet...unless of course you have service like me.
Have a nice weekend.
Internet service is in awful shape throughout this part of the fly-over zone at least, so that is why I've been experiencing such difficulty. I don't know whether this will make it out tonight so I'll save the good stuff til Monday.
World-wide equities were slaughtered today for all of the same reasons...and none of them. Today, even in the midst of August, the volume on all markets picket up which is an indicator that the gang is beginning to pay attention to what is going on and worst yet, the VIX, the index of volatility, doubled. They tell me this is a bad thing but my reaction is if every body's trying to get out the exit at the same time, what do you expect. An almost 500 point drop in the DOW isn't quite the end of the world but it sure isn't a happy thing at which to look. Nor can it be called a true portrait of the world's over-all economic condition; I don't know what to call it but the smart guys keep telling me that.
What troubles me the most is that I get the distinct impression in speaking with those still at their desks is that what has everyone worried is the Big Unknown. Things in the markets have gone to crap but so far, so far we have not heard of any major corporate losses. A lot of people are asking, "why not" in light of past experience. I am as well and I don't like Fridays because everybody waits for Friday to come out with bad news. If we do have an event this weekend in a perverse way it may be a good thing as it will release the pressure in the kettle. Let's hope not but there is a better than even chance at this stage that we are going to face something...if not now in the near future. We should also look for a gathering of the Wise Men from around the world. These days one doesn't have to hop on a plane to accomplish that (although they love to do that), one can simply do it by the Internet...unless of course you have service like me.
Have a nice weekend.
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