Solarbird (solarbird) wrote,

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what keeps me awake at night

If you want to know one of the things that keep me awake at night, it's that as of the last data I had, most people still haven't updated or played with or otherwise changed around their IRA/401(k) investments. That's a lot of money, and worse, it's a lot of what investors call stupid money - the last to react in any situation. Eventually, it's going to start to move, because it has to, and I suspect strongly that you can't start talking about bull capitulation until it does.

And normally, that would be pretty okay. In a normal economic cycle, once that last money decides to sell, you're near a cyclical bottom, and their selling is really a good indicator that it's time to watch when to move back in. But in this case the numbers are... rather more substantial.

Dr. Roubini thinks an S&P500 of, aheh, 500, is entirely reasonable, even, I think, without considering this metric. His talk today (linked to in three parts from the story at this link) is reasonably interesting, particularly if you have things to do that keep you from reading. Here's a similar earnings-based analysis. (Note that neither of these are technicals-based, but are instead earnings-based.)

Of course, I also think about the bond market, and debt funding, and so on. So I keep an eye out when Europe says it's not onboard with additional stimulus, because the best way I see to keep the US treasury market from the implosion I worry about is by a de facto global agreement, stated or not, that everyone will go along with the massive new debt issuance.

One of Dr. Roubini's suggestions is a 30% haircut on all mortgage balances - essentially, a cramdown to realistic market levels. That's across all mortgages. You're also seeing efforts to throw out second mortgages and other secondary liens.

Credit markets, which never really recovered, are indicating trouble again. I've been keeping an eye on the ABX valuation numbers and CMBX spreads, and they've both gone back to (or in the lower tranches) far beyond the previous rounds of fail. But so far the TED spread is only creeping a little up from the 1.00 area, and LIBOR rates (while also drifting up a little) are generally behaving, which is important.

Here's a story on the impact of the explort collapse on Nagoya, and here's one where NBC discovers the tent city, this one in California. (Tent cities have been part of the homeless management process up here for a long time.) Both are video and preceded by annoying commercials, sorry.

US Stocks down a bit today, what would've been a huge swing down a couple of years ago (1-2%) but which is no longer headline news. Canadian stocks were off, but much less, the TSX down a third of a percent. US futures are up at the moment, the Nikkei was, but has dropped back down. Baltic Dry Index continues well off its lows, with China continuing to make big forward-buys in various commodities.

Supposedly, my new HD is on the way, and then I will be able to do restoration passes from backup, and then I will have a proper set of bookmarks and such again. Yay!

eta: 91-year-old Clara has a YouTube series on cooking from the Great Depression, and Mish Shedlock has some still-quite-bearish real-estate analysis based on NAR data. When the NAR data looks grim, well.

eta2: One month does not a trend make, but sudden price deflation in China is making people nervous.
Tags: economics
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