Except the Euro.
The Euro was drifting down $1.50+ to $1.35 - and then screamed down to $1.18. It would appear that U.S. exports to Europe DIED... and with it rail traffic. Then....
WTF??!!
If the data is correct, these indexes are pointing to an AIG style cluster f**k sometime this summer. Maybe bigger. No "maybe"... probably much bigger. One cannot compare a default by AIG with a default by, say.... Italy - a country with the 3rd largest public debt (behind the U.S. and Japan) where said debt is at least 115% of GDP.
I am not making a prediction about Italy per se, only that these indexes are discounting something very, very, very big... and something like an Italy default would fit the bill...
Given the Baltic Dy Index, Rail Traffic, the DECLINE in interest rates for Treasuries AND the recent record in Gold and near record for Silver in U.S.$ at a time where the US$ is RALLYING almost vertically??!!...
Something's up.
Stay tuned.
10 comments:
Something was supposed to be up for the last 18 months, and nothing has happened. The only thing that did happen was what Mish predicted would happen during a deflationary depression: an abundance of everything for sale (energy, food, real estate, etc.) and everyone scrambling to get cash in any way they can (I've got painters knocking on my front door now :( )
What has not changed is the lack of credit for small businesses, the ongoing overall contraction of credit/money supply, housing prices continue to fall, pathetic interest rates implying very little inflation or anything else, U.S. debt to GDP still near 350%, and dropping approval numbers for Obama. If nothing has happened by now ...
bur,
Hope you are right, just got this sinking feeling though. Maybe I am just a doomer. :)
Sometimes we get so caught up in the day-to-day detail we don't take a balanced view of the Big Picture. There's so much really depressing stuff around, especially the Gulf, recession, etc.
But Bur, falling off a cliff is ok if you don't look down, at least until you hit the bottom!
The evidence is all one way. Can you give me one good reason why things will get better? The Gulf is already polluted and Southern economies trashed, no-one will bail out the Gov't/municipal debt except the taxpayers (for the next 30 years) and most companies are unlikely to do any better than they're doing right now.
I'm thinking of moving; China? Brazil?? Even Vietnam is doing OK!
I'm old enough to know things aren't supposed to get better. ;) All we need is a little love, food, and open gas stations, and the world will turn.
P.S. almost all the oil ever produced by the world evaporated a long time ago. The planet handled it, and the planet will handle this stupid, wasteful little leak in the Gulf .. someday.
Bur:
I am not dooming. I am sharing my trading research with you. Don't use it if you don't like it. Go long. Maybe you'll be right.
I think these indexes are discounting (predicting) something very negative, but they are not perfect indicators.
This has been at the front of my mind for a few weeks now. I know it's not the most traditional approach but it seems to fit with the pattern you're calling attention to. If it all turns out to be nothing, then Bur can gloat his 'normalcy bias' all he wants.
Didn't accuse the mighty log owner :) of dooming. I've sure INVESTED like a doomer. I got six 20-lb. bags of white rice (no expiration date essentially) sitting in my basement!
I've been sitting here for two years waiting for SOME shoe to drop, and there just hasn't been very much. Other than several younger friends having difficulty finding jobs, everyone else is fat, dumb, happy .... and driving. :)
I will be prepared to gloat in the fall :) when I get my last pay step increase of my career, and start the slow dive into retirement ... funded by U.S. Treasuries ....... AAAAAAAHHHHHHHHHHHH!!
Was reading an article about Italy before stopping at your site. I lived there for 4 years so knew how bad pay was for locals, but check this out:
After the steep recession in 2008-2009, nearly 60 percent of 18-34-year-olds now live with their parents, up from 49 percent in 1983, national statistics agency Istat says.
Nearly a third of people in their early 30s are still living with their parents -- a figure that has tripled since 1983.
"This is the generation which is bearing the brunt of an aging society, of a society which is investing very little in the young while putting the costs of the economic crisis and labor market changes on their shoulders," said Saraceno, adding that young Italians risk becoming a "lost generation."
While retirees -- who form a majority of members of Italy's largest union -- and public sector workers lead the outcry over a 25-billion-euro ($33.5 billion) government austerity package, young people quietly endure the sharpest hit from the crisis.
In 2009, Italians between the age of 18 and 29 accounted for 79 percent of overall job losses, Istat says. The employment rate in that age bracket shrank to 44 percent.
http://www.reuters.com/article/idUSTRE65M1XU20100623
Might add it is still a beautiful place despite the shite economy.
On the other hand Italians can't easily get mortgages or loans or credit cards (cards automatically are cleared from their bank account at the end of each month) so they're not in much personal debt or exposed to house price falls.
better to have always lived with your parents than to move back after bankruptcy, wouldn't you say?
Not so shite!
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