Even Managed Markets Can Have Accidents

It's not just another day in -land as bad news rocks around the planet. Monday's featured players were in Europe as banks were clobbered.

The center of the problems was in Germany featuring Deutsche Bank (DB). The strange thing about it today was a problem already known—leverage. But most experts knew all about this stuff for a long time. Only now is a light shown on it. Below is a table that really doesn't need an explanation.

2-8-2016 2-56-06 PM

That displayed, even the proletariat “gets it” that western countries and financial institutions are being run by a bunch of mor*ns. That's why we have political populists dominating the electorate. They understand something is terribly wrong as voters gravitate to them.

So we also move to Asia where in China the opaque economic fantasy is reaching its end-game. 

2-8-2016 2-57-00 PM

This spills over to Japan where experiments continue full speed ahead, and now with negative interest rates. This I might add is without the cooperation of most Japanese housewives who run the family's budgets. That is, don't save, spend which runs against their cultural traditions.

So we have a world now awash in debt fueled by central banks and trickling down through the system to private banks, corporations, mortgages, selective home prices and so forth. A pox on their houses and policies! Nothing's been fixed, just papered over.

But, let's not move too far off where financial markets have descended or the few that rose Monday. Stocks were able to cut a could chunk of their losses before the closing bell aided by that pesky 2:15 PM Sell Program Express. In other words, the machines took over.

Market sectors moving higher included: Treasury Bonds (TLT), Gold (GLD), Gold Stocks (GDX), Silver (SLV), Euro (FXE) and little else.

Market sectors moving lower included: Everything else.

Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red). Dependent on the day (green) may mean leveraged inverse or leveraged short (red).

Print Friendly, PDF & Email
No tags for this post.

Related posts

Leave a Reply

Your email address will not be published. Required fields are marked *