The relatively few leaders (aka, “generals”) that had been propping up the indexes are being systematically taken out.
When looking at the current state of the Chinese economy it is important to note what happened leading up the ongoing predicament.
After yesterday's torrid, chaotic moves in the market, where an initial drop in stocks was quickly pared and led to a surge into the close after a weaker dollar on the heels of even more disappointing US data and Bill Dudley's "serious consequences" speech sent oil soaring and put the "Fed Relent" scenario squarely back on the table, overnight we have seen more global equity strength on the back of a weaker dollar, even if said weakness hurt Kuroda's post-NIRP world and the Nikkei erased virtually all losses since last Friday's surprising negative rate announcement. Oil and metals also rose piggybacking on the continued dollar weakness as the word's most crowded trade was suddenly shaken out.
We tend to assume our system for understanding the cause of failure must be sound, because we've experienced Roaring Success for so long. Rip-Roaring Success can destabilize in a number of ways.
What would the world look like the day following a “truth bomb” dropped by Mr. Putin and the Chinese.
The Global Dow followed the old Wall Street adage about bull markets taking the escalator and bear markets, the elevator. In fact, it may have simply jumped down the elevator shaft as, in a span of just 10 days, the index found itself already down at that lower support level. So what now? The risk has been wrung out and back up the escalator we go? Well, not necessarily.
"Repeated airstrikes in villages in Saada kill an ambulance driver from an MSF hospital on his way to help"...
"When the market speaks, as it has done in recent days, it is right that bank executives and shareholders comprehend the need for serious and swift intervention."
The end of America’s oil “miracle” is coming and there’s nothing Wall Street can do to stop it. At this point in the game, no one is going to finance the oil patch's cash flow deficits and the fundamentals in the oil market are laughably bad. As Bloomberg reports, Wall Street is about to have a serious bout of “indigestion” because recent auctions suggest that “some bankrupt oil and gas drillers can’t give their assets away.”
As BofA admits, "this sell-off differs from a typical growth scare in that parts of the recession playbook are failing miserably." So until we have clarity on whether or not this is a garden variety correction or a true bear market, here is BofA's advice on what to own in an "equity death spiral"
Three pressing questions about Bitcoin and blockchain answered
Draghi could go nuts, as sinking oil prices are pushing inflation towards zero in Europe...