What Could Possibly Go Wrong

What If Stocks, Bonds and Housing All Go Down Together?

"In the past, central banks were pleased to inflate one bubble at a time, enabling money both smart and dumb to flee one smoking ruin and get busy inflating the next bubble-ready asset class. But now, thanks to essentially unlimited liquidity and credit, the central banks have inflated three bubbles at the same time: stocks, bonds and housing. That raises an interesting question: what if all these bubbles pop in unison? Will the central banks be able to place a bid under all three markets simultaneously? If so, where will all that freed-up cash go next?" Continue reading →

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Japanese Stocks Plunge 1000 Points; Central Bank Injects 2 Trillion Yen

"Japan’s Topix index fell almost 7 percent, the most since the aftermath of the March 2011 tsunami and nuclear disaster, as financial companies plunged amid rising bond yields. The rout triggered a halt in Nikkei 225 Stock Average futures trading in Osaka." Continue reading →

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The Words That Sent the Stock Market Tumbling

"Stocks closed down nearly 1 percent in a volatile session after the minutes from the last Fed policy setting meeting suggested the Fed is divided on when it may start to pull back on its monetary stimulus. The market had moved higher earlier in the session when Fed Chairman Ben Bernanke reiterated that tapering bond purchases will depend on an improvement in the economic data. But then during the Q & A, Bernanke said that the Fed could decide to scale back the pace of bond purchases at one of the 'next few meetings' if the economic recovery looked set to maintain forward momentum." Continue reading →

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When Terrorism Comes Home

"Several observers have pointed out the similarities between today's savage attack in London, where a British soldier was reportedly beheaded by two men shouting 'Allahu Akbar,' and the gruesome recent attack by US/UK-supported Free Syrian Army Commander Abu Sakkar, who cut out and devoured his Syrian Army soldier victim's heart. That US overt and covert support of the insurgency in Syria, including its radical and al-Qaeda affiliated elements, is a known fact. But we know that eventually these US-supported Islamist radicals with Western passports will come home -- and now we have a better idea of what might be in store for us when they do." Continue reading →

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Sam Zell says sell

"At least one notable investor thinks we may be in bubble trouble again. Sam Zell on Thursday at the SALT hedge fund conference in Las Vegas said stocks are due for a fall. The legendary real estate investor thinks the market is out of touch with what is really going on in the economy. 'Right now you are buying at an all-time high,' says Zell. 'And there are times when stocks hit a high, and then go higher, but that's when you have a good economy.' By contrast, Zell said the companies he runs and looks at are still struggling to increase sales. Zell said he was worried about problems in the Middle East and recent aggressive efforts by the Bank of Japan." Continue reading →

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Where’d All the Fear Go?

"There are periods when a given market pegs so far to one extreme or the other that it becomes hard to ignore. Such is the case with the market that measures fear – known by stock investors the world over as 'VIX.' VIX is telling us that fear – at least as it relates to stock prices – is dirt cheap. With what we know about markets and human nature, we do not expect fear to remain cheap forever. VIX is the symbol for the Chicago Board Options Exchange (CBOE) Volatility Index. It measures the volatility embedded into options traded on the S&P 500 (SPX) and reflects investors' 30-day consensus view of the future." Continue reading →

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‘Campaign to Stop Killer Robots’ calling for ban on ‘fully autonomous weapons’

"The idea of autonomous killer robots may seem like the stuff of science fiction, but human rights groups are already preparing for what appears to be the future of weaponry. The Campaign to Stop Killer Robots, a coalition of international groups, is preparing for a global summit in Geneva Switzerland on Wednesday, May 29 that will review a U.N. report on these types of weapons that was released earlier this week. The Campaign hopes to convince nations to sign on to an international ban on autonomous weapons." Continue reading →

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Bank depositors to suffer losses in new EU law

"A draft European Union law voted on Monday would shield small depositors from losing their savings in bank rescues, but customers with over 100,000 euros in savings when a bank failed could suffer losses. From 2016, large depositors in the European Union might suffer losses if a bank gets into serious trouble, echoing a deal in Cyprus where wealthy depositors were hit hard at two banks to save the country from bankruptcy. Under the EU proposal, a bank would only dip into large deposits of over 100,000 euros once it had exhausted other avenues such as shareholders and bondholders." Continue reading →

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Debt ceiling suspended: US takes on $300bn in new debt after hitting $16.7 trillion

"America’s ticking debt bomb has been reset. Washington has suspended the debt ceiling, setting a date, and not a concrete dollar sum as a deadline, an unprecedented first in US history. Citing ‘extraordinary measures’, the US Treasury has further delayed tackling America’s debt, and will wait until Labor Day, September 2nd, to revisit the burgeoning crisis. The ceiling has been lifted, and the Treasury has promised it will keep cash pumping into government spending programs beyond the debt limit through a series of emergency cash tools." Continue reading →

Continue ReadingDebt ceiling suspended: US takes on $300bn in new debt after hitting $16.7 trillion

How long can this rally last?

"Is today’s rally in stocks something you can count on and invest in with profitable results? Or is it likely to end soon — most likely, just as you put YOUR money on the table? Among the thousands of investors flocking to Las Vegas for the Money Show this week — in workshops, during cocktails and around the hotel’s gambling tables — this is the big question being asked over and over again. It’s the same question debated on Yahoo! Finance, CNBC, and in the halls of big Wall Street firms. Everyone wants to know. Many venture to guess. But we do know that most stocks are going up for all the wrong reasons." Continue reading →

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