Maybe some of you have been receiving the same email I have been getting; it says the market will crash sometime between Thursday, September 17th and Monday, September 28th. I haven’t delved into the details of the prediction, and probably wouldn’t understand them if I did. But, with today being quadruple witching and all, I thought I’d share that warning.
It’s turning out to be a long September down a one-way street for the buck.
The decisions of investors who’ve jumped in on stocks and risky assets are being validated by three things:
1. Improvement in economic data
2. Affirmation of recession’s end
3. Continuation of risk taking
France’s per capita GDP is roughly 14% lower than per capita GDP in the US. But that’s only a mirage ... and only factors in economic figures, rather than the actual mood of those who make up the economy. The differential between the two economies should actually be much narrower, or so we’re told.
It may at times be a cozy symbiotic relationship that has been beneficial for the US; especially as it relates to the US consumer getting increasingly higher quality and very inexpensive goods from China—that does increase domestic purchasing power. But, our relationship with China is not free trade in the “usual” sense. Based on empirical evidence, i.e. read real world not theory, if we continue down this road the US economy will be completely hallowed out of advanced manufacturing—which is important.
A very astute member of Black Swan services pointed out the latest growing divergence between the bond price action the last couple of days, and the dollar…The question: What does it mean?
The short answer may be that global markets are now normalized and the tight correlations we’ve been witnessing the last several years, during both the boom and the bust, are changing.
