Thursday, August 22, 2013

Are We On The Brink of Another Economic Disaster?

Stocks are in a ‘dead zone’
Stocks are drifting lower with few catalysts to move the market. Chuck Carlson, CEO of Horizon Investment Services, says we’ll get a “fresher idea of where investors’ and traders’ heads are” after Labor Day.
http://www.marketwatch.com/story/stocks-are-in-a-dead-zone-2013-08-21
Home-refinancing applications plunge 62% since May, mortgage bankers say
http://blogs.marketwatch.com/capitolreport/2013/08/21/home-refinancing-applications-plunge-62-since-may-mortgage-bankers-say/?mod=MW_home_latest_news
2.89%
http://www.marketwatch.com/investing/bond/TMUBMUSD10Y?countrycode=BX
http://finance.yahoo.com/q?s=^tnx
GALLUP: Unemployment Spikes to 8.9%… 18 month high
UNEMPLOYMENT RATE JUMPS FROM 7.7% TO 8.9% IN 30 DAYS
http://www.breitbart.com/Big-Government/2013/08/21/Gallup-Unemployment-jumped-from-77-to-89
5 signs consumers are crumbling
The retail sector saw a lift in the last few days thanks to encouraging earnings from J.C. Penney and Best Buy. Both merchants put up big numbers on Tuesday, and saw shares gapped up as result.
However, those looking for signs of trouble in retail stocks also have plenty of fodder in recent earnings. Wal-Mart Stores Inc. WMT +0.89% , the world’s largest retailer, reported ugly numbers and saw same-store sales decline for the second consecutive quarter. Elsewhere, department store Macy’s M -1.02%  suffered its first earnings miss in six years and Kohl’s KSS -0.65%  also disappointed.
http://www.marketwatch.com/story/5-signs-consumers-are-crumbling-2013-08-21
The last bullish argument
Many on Twitter have been saying that I have been too negative on stocks over the past several days, as our ATAC models used for managing our mutual fund and separate accounts rotated fully out of emerging markets into defense mode. Strength was undeniably there given strong alpha in the weeks we were exposed, but admittedly momentum has aggressively turned, particularly as India craters.


I have hammered the idea that spiking yields may serve as a deflationary shock to the economy, and made parallels to 1987 in terms of the speed of the bond market’s move relative to equities, which the Crash resolved in a single day.
A panic in long-duration bonds has all kinds of ripple effects, which in turn means the fat pitch is in for a rain delay as everything takes a back seat to the heart, soul, and life of the free enterprise system.
http://www.marketwatch.com/story/the-last-bullish-argument-2013-08-21
A 2008-Type Of Event Will Plunge The World Into A Panic
The system would implode again, and this time it would be much more serious than in 2008 because the sovereigns no longer have the firepower to bail everybody out. That’s what is different now.
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/8/21_A_2008-Type_Of_Event_Will_Plunge_The_World_Into_A_Panic.html
ALERT!! WAKE UP PEOPLE!!! We Are Now On The Verge Of A Historic Meltdown & Collapse
On the heels of a tremendous rally in gold and silver, today a man who has been involved in the financial markets for 50 years shocked King World News when he said that we are on the verge of a historic and catastrophic global financial “meltdown.” He also spoke about events that are unfolding behind the scenes at the White House right now. This is without question one of John Embry’s most powerful interviews ever.
Financial Crisis-Era Derivatives Are Making A Comeback
Collateralized debt obligations, the complex financial instruments that cratered disastrously in the financial crisis, are back.

The market for the instruments, which were based on subprime mortgages, shrank from $520 billion in 2006 to just $4.3 billion in 2009 after the housing bust. Warren Buffett once called CDOs “financial weapons of mass destruction” because of their riskiness.
This time around, the investment has shifted from a mortgage-based CDO into a “collateralized loan obligation,” a cash-generating asset structured similarly to CDOs, but consisting of loans to businesses.
Read more: http://www.businessinsider.com/financial-crisis-era-derivatives-are-making-a-comeback-2013-8#ixzz2cdLYcpfb

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