Home > Daily Reading on the Financial Markets, Financial Ponzi, investing, Stock Market > Daily Reading on the Financial Markets: 6/1/12

Daily Reading on the Financial Markets: 6/1/12

From Zero Hedge, Bill Gross sees the demise of the “little guy” going hand-in-hand with trouble for our entire monetary system.

Also from Zero Hedge, SocGen’s Albert Edwards makes Bill Gross look like a perma-bull, forecasting an S&P drop well below the intra-day lows of 2009.

And topping them both, Raoul Pal predicts that the debt and fiat ponzi finally ends, beginning in 2012-2013.

Technical analyst Chris Kimble notes that crude oil is joining copper in breaking down from a large pennant pattern.

At Humble Student of the Markets, Cam Hui mentions an off-the-radar (albeit low-probability) risk: capital flight from China.

As suggested by Options Trading Tuturial, Reggie Middleton exposes why pushing Germany to support a broader bailout (even if it could) doesn’t solve the problem anyway.

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  1. June 1, 2012 at 9:49 am

    Ugly pictures all. In the Bill Gross piece the question that comes to mind is, “Why can’t the 1% (and perhaps moreso – the 0.1%) recognize that by so-successfully ‘winning’ the financial game they have in fact lost it?”

    • June 1, 2012 at 12:29 pm

      Options,
      Thanks for the feedback and the article suggestion. As I see it, when you’re winning (as “the 1%” most certainly are – at least in the financial game), it’s tough to bail before you’re absolutely certain that the tables have turned against you. When you’re up 50%, 100%, 200% on a trade, it’s tough to say “well, that was a success” and close it unless you see a strong reason to do so. I think it’s human nature to want to “top tick.” Similarly, I think it’ll be hard for the 1% to start relinquishing ground they’ve gained (be it lower tax rates, politcal favors for their businesses, etc) without more compelling evidence that the tide has turned against them. So far, at least in the U.S., it’s just talk. A greater awareness. But the 99% are still aspiring to become the 1% (levered up with debt, still buying trinkets, still trying to keep up with the Jones’s), not angling to overthrow them. When anger turns to action in the 99%, then the 1% will be faced with a more compelling decision. I think we’ll get to see that play out over the next 20 years.

      The charts in the Raoul Pal presentation are particularly frightening to me. Those are 15 year Head-and-Shoulder patterns! That’s the kind of stuff that can truly “take down” a 100 year bull market, imho. I am re-reading “The Big Short” and it’s just re-assuring to see how long some of those guys had to wait for their idea to pan out, and how much pain they had to endure while the markets ignored what they were seeing. I think this house of cards is coming down one of these years, and I think it’s worth having a couple percent of my portfolio in WAY out of the money SPY puts every year until it happens.

  2. June 1, 2012 at 10:11 am

    You gotta add this one to your list today – The chart Reggie puts up (linking countries to time spent insolvent) is worth the read alone!

    http://www.zerohedge.com/contributed/2012-06-01/sophisticated-ignorance-part-2-pressuring-germany-do-wrong-thing-short-seller

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