Six reasons why falling stock markets do not need to be explained

A world in the Red

redworld15116

As the morning progressed, the futures weren’t looking bright….they weren’t even looking Orange: they were blood red across almost all US markets. During the CET morning, they dipped from -1.3% via -2.0% to -2.7% as the markets opened. At the opening (14.30 GMT), NYSE  stocks plunged.

There are various speeds in the bourse narrative space going forward, even when things are going backwards. There is fell, dipped, dropped, plunged and collapsed. ‘Plunged’ is one of the bigger descriptors. Within five minutes of the NYSE bell, the Nasdaq plunged 3% to its lowest level since Autumn 2014. Within ten minutes, the Dow plunged 400 points. As I write, it is 37 points above the dreaded 16,000.

I spent a fair amount of the middle of my day (after levelling the soil over a septic tank) watching talking heads across the world debating WTF was going on, but during that time there was little or no mention of the following facts:

* The Baltic Dry Index is now 50% below Great Recession levels
* The Bloomberg Commodity Index now at its lowest point since 1991
* The US rail cargo idex is halfway round the toilet S-Bend heading for the sewers
* US Credit use is falling because there’s no consumer confidence out there, and plastic cards are maxed out
* US industrial output in December fell by twice the expected number
* As investors dash towards safe Sovereign bonds and those sovereign yields fall, theDollar continues to strengthen. This produces two effects: cheaper imports into the US raising the deficit acceleration further still; and Bric Dollar denominated Sovereign debt becoming even more expensive than it was after the idiotic Fed rates rise.

There’s a long weekend coming up in the US. We’ll see whether it calms people down….or simply gives them time to consider that maybe we need to get this thing over with.
Either way, as I wrote earlier, this is not a dip, it’s a plunge that will be a correction come what may.

14 thoughts on “Six reasons why falling stock markets do not need to be explained

  1. If you feel that this is a masivley manipulated market and the cost of manipulation is growing, now finding it next to impossible to hide all the newly acquired skeletons what do you do?

    2 Options and reckon they are playing a real doozy here…

    Carry on, the manipulated system collapsing do you go against the flow where if you fail and it does look like they could as China implodes.

    Go early like RBS, then you get to say “we told you so”!. A nice ploy to not be hanged as they have done so many time in the past.

    They may have chosen the latter we will know in a couple of weeks.

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  2. my guess is that they will dole out QE… and keep on with it even though it doesn’t work.. it makes it appear they are doing something and the banks and bourses will be happy for a week or two…..

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  3. Ground Control to Major Tim
    Ground Control to Major Tim
    Take your Man up pills
    and put tin helmet on

    Ground Control to Major Tim
    Commencing meltdown,
    algos on
    Check deflation
    and may Goldman Sachs be with you

    This is Ground Control
    to Major Tim
    You’ve really made bad trades
    And the papers want to know whose shirts you’ll wear
    Now it’s time to leave the free-fall
    if you dare

    This is Major Tim to Ground Control
    The markets are through the floor
    And the £’s floating
    in a most peculiar way
    And the stats look very different today

    For here
    Am I with a tin hat on
    Just got out of bed
    All the markets are bright red
    And there’s no easing from the Fed

    Now I’ve lost
    one hundred thousand pounds
    I’m feeling very sick
    But I think my broker knows which way to go
    Tell my bank I owe it very much
    you know

    Ground Control to Major Tim
    Your stop-loss is dead,
    You’re really on a limb
    Can you hear me, Major Tim?
    Can you hear me, Major Tim?
    Can you hear me, Major Tim?
    Can you….

    For here
    Am I with a tin hat on
    Just got out of bed
    All the markets are bright red
    And there’s no easing from the Fed….

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  4. Desmond QE works if it is used to re-balances economies, QE fails when it props up already distorted markets,that’s the real lesson learned from Keynes watching people die on the streets of Vienna,has opposed to Hayek who thought nothing should be done & relied on privilege to survive.only to pay privilege back by claiming flat earth economics could work,well it failed in the 16th,17th,18th,19th 20th & once again in the 21st century it does have a very successful rate of failure.

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  5. In 2045 Britain suffers mass floods and is wrecked. Watching a docu of starving millions is Bob Singh in Bombay and rallies his Bollywood stars together for us:

    https://jeremystocks.wordpress.com/2016/01/12/do-they-know-its-diwali/

    It’s Diwali time; there’s no need to be being afraid
    At Diwali time, we let in light and we banish shade

    And in our world of blenty we can spread a smile of joy
    Throw your arms around the west at Diwali time
    …..

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  6. Bear markets, nowadays, last less than 3 months and are very sharp(at least 20 percent). Then, you have a sideways market, a major corporate going bust, panic, and then it’s time to buy. BHP Billiton is the one to watch.

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  7. If this keeps up that idiot Trump will become Mr. President Trump. The pitchforks are coming out and “the Donald” is the only outsider running. God help us all

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  8. Stephenroi

    I’ll give it five and buy it.

    In other news, Dame Barbara Windsor of Cartland is to exit EastEnders, no I don’t either, for good; clearly, we can’t go on much longer.. and I foolishly lent my tin hat to Major Tim ;(

    Like

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