Monday, 29 September 2014

The Bear Signals are Aligning.

A very quick look at concerns that are building rapidly.

Background :-

Europe - Who is in charge?
Russia vs RoW - Slow escalation.
UK - Fracturing political structure.
Middle East - Deja Vu
Hong Kong - Riots with many remembering/frightened of a Tianenmen Square
DM Economies - Rolling over.

Price action :-

High Yield prices yukky.
Small stocks leading the main indices lower.
UK London house prices off.
UK stock shocks increasing (Tesco, Balfour Beatty) - Leveraged expectations being caught out.
Usual EM stress points breaking (watching Turkey).
DM and EM both moving lower (haven’t seen that in a while).
Corporate bond market liquidity a real worry.
IPO launches rapidly going negative.
Commodity prices still falling.
NZD melt down - separate issue but pretty sure John Key knows the background carry concerns so is just helping the NZD on its natural way
European markets opening down despite late NY rally

This is beginning to smell like a typical all round September/October risk dump. So this permagoldbear even thinks he'll buy gold and JPY - and that's saying something!


abee crombie said...

I like the JPY call. Overbought and a good risk off proxy.

I too am getting worried, most particularly on my EM call. Looks like a nice bull trap here. Arg not sure what to do, hold or punch out.

Re:Tesco, I know Third Avenue, a bunch of deep value guys like WM Morrison for the land value mostly.
Luckily I dumped my Tesco shares when Buffet did but wow, the decline is nasty, I didnt even see til now

Anonymous said...

C Says
UK retail have been seeing since last year when I sold SBRY at modesty prevents me from saying.
Nothing like feet on the ground to get the real story here. being retired and a walker, I (yes it's sad) literally walk them all quite often. That's why I knew last year that the only winner in the big 4 was Asda. The rest were toast ,because they were far too late waking up to the threat from European supers.
I also have some price targets coming up in that sector ,but they still have more to go before they hit my buy level which is where I believe the long term restructure support money will get serious.

Polemic said...

Abee and C

re the Tesco and Balfour Beatty hots. my concern is that it is assign that every single bit of juice has been squeezed to of balance sheets and legal account manipulation to the point that some have been found to be crossing the line in leveraging expectations of their future performance. All Ok and works as a Ponzi scheme if general economic growth funds it. But if we low a lot of this accounting shit may flow to the surface rather fast.