From no greater laureate than UBS' NYSE Floor director Art Cashin... the year behind us (and the one ahead) in rhythmic narrative.
Despite the authorities' best efforts to keep everything orderly, we know how this global Game of Geopolitical Tetris ends: "Players lose a typical game of Tetris when they can no longer keep up with the increasing speed, and the Tetriminos stack up to the top of the playing field. This is commonly referred to as topping out."
"I’m tired of being outraged!"
On this day in 1876, a group of influential, yet irate, Americans met in Indianapolis. Their primary purpose was to send a message to Washington on how to get the economy moving again.... So this group decided that what was needed was re-inflation (put more money in everyone's hands, you see). The method they proposed was to issue more and more money. Cynics called them "The Greenback Party". And on this day, the Greenbacks challenged Washington by running an independent for President of the United States. His name was Peter Cooper. He lost but several associate whackos were elected to Congress.
BMO Capital Markets economist Sal Guatieri notes that the BMO Economics team has lowered its U.S. fourth quarter gross domestic product (GDP) growth estimate to 2.5% from 2.8% due to weaker housing starts and a view that November’s activity could get chilled by polar vortex 2. While October was relatively warm, November has been anything but. However, he does not expect the sort of massive hit that GDP suffered in the first quarter of 2014 due to cold weather.
It "all depends on Draghi," warned UBS' Art Cashin early this morning... and Draghi disappointed. Historically October 2nd, Cashin notes, usually sees a rebound but payrolls may complicate that pattern (and rumors that ISIS is consolidating west of Baghdad). Stick with the drill, he advises – "stay wary, alert and very, very nimble," as the 120-day moving average (1945 on Cash S&P) is critical...
The U.S. economy has had six full years to bounce back since the financial collapse of 2008, and it simply has not happened. Median household income has declined substantially since then, total household wealth for middle class families is way down, the percentage of the population that is employed is still about where it was at the end of the last recession, and the number of Americans that are dependent on the government has absolutely exploded. Even those that claim that the economy is "recovering" admit that we are not even close to where we used to be economically. Many hope that someday we will eventually get back to that level, but the truth is that this is about as good as things are ever going to get for the middle class.
Having cautioned investors this morning of the historical tendency for market reversals on September 22nd after hitting all-time highs, UBS' Art Cashin's warning has been echoed by BofAML's Macneil Curry who notes risk assets are set to correct as negative seasonals dominate the S&P500 this week. This is bullish for Treasuries, Curry adds. "Crazy? Maybe, but forewarned is forearmed," as Cashin concludes.
Q. What are traders talking about at the present time here at the New York Stock Exchange?
Cashin: We are concerned about two questions. First, how will the Fed do in keeping money reasonably easy without causing inflation? Second, where do we stand with the current geopolitical challenges? For now, these challenges seem to be short term concerns. But should we begin to see a financial contagion and pressure building on banks in Europe, perhaps out of the Ukraine situation, things could theoretically turn into what I call a «Lehman moment». That is when markets come under pressure but seem to be under control, and then things change suddenly.
Today, the 13th Anniversary of 9/11 will see many people recall how things were. To remember that day and the heroes it spawned who better than UBS' Art Cashin - who thought it simplest to repeat what he wrote back then.
This won't last... here's 3 reasons to consider why...
Yesterday, the venerable Art Cashin had 12 simple words of wisdom for 'traders'. Today he has a more direct warning for those watching the levitation and counting their 'wealth effect' gains...
The avuncular Art Cashin, UBS' venerable man on the floor of the NYSE has seen it all... and is not impressed by the lack of volume. On what he notes is historically a very light trading week with a mild upward bias - note, the 1929 high was made the day after Labor Day - Cashin has 12 simple words for the exuberant trader this week...
For the 5th month in a row, US treasury bonds started with a 2-day sell-off as yields rose arond 6bps today (back to unch from FOMC). Gold, silver, and copper all gained notably (despite a knee-jerk lower on the ADP data). The US Dollar jumped instantly on the ADP print then flatlined for the rest of the day but USDJPY pushed higher. However, stocks chose to ignore their ubiquitous drivers - VIX was slammed lower (stocks ignored it) and USDJPY surged (stocks ignored it) as early weakness in Trannies was overtaken by Russell 2000 losses as the S&P and Dow flatlined in a very narrow range. Shortly after the US markets opened, credit markets diverged notably from equity markets (but caught up into the close). VIX closed lower. The Dow had its narrowest range since Dec - funny what happens when there's no $190 billion repo injection, eh? The S&P and Dow closed marginally green at new record highs. (and Camera-on-a-stick tumbles 17% from its highs)
Have you been paying attention to what has been happening in Argentina, Venezuela, Brazil, Ukraine, Turkey and China? If you are like most Americans, you have not been. Most Americans don't seem to really care too much about what is happening in the rest of the world, but they should. In major cities all over the globe right now, there is looting, violence, shortages of basic supplies, and runs on the banks. We are not at a "global crisis" stage yet, but things are getting worse with each passing day. Many have felt that 2014 could turn out to be a major "turning point" for the global economy, and so far that is exactly what it is turning out to be. The following are 20 early warning signs that we are rapidly approaching a global economic meltdown...