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Exports fall
Last weekend
some very unreported news reports stated that
Japan’s exports fell 10 pct. That is an astonishing number. Typically
those numbers would be a big deal to the news if it was even 1 to 2%. As I
said, mostly unreported in the financial news. Commodities have been taking a
bath. We hear reports that China is growing again but I doubt their data.
Asian exports to each other are key to the world
exports to the west and lots of their trade and exports are parts and
supplies in their local supply chain to each other. Japan being down that
much is BAD.
And we had
earnings surprises downward by Google, for example, not unexpected because in
that space the advertising in the tech field is dropping due to the
proliferation of the small pads and internet phones. So there is a sort of
evolution of that space too, but the point is other tech companies are
warning and or laying off several thousand each.
Since Tech leads or has been leading the stock rally of late, it was a bad
sign for leaders to roll over.
Since Friday
and the Google debacle, stocks have dropped about 500 points plus (today
being late Wed. Oil dropped and even with the endless chaos in the Mid-East,
is under pressure. Gold dropped too (we had given subscribers a weeks’
notice when gold rose from $1625 a few months ago and when it neared $1800 to
watch for it to drop, again by a week’s notice).
We issued a
stock crash alert Tuesday at 2 am PST and the market had another roughly 250
point selloff.
Then it comes
out Wednesday that Draghi stated deflation warnings
in the EU, and gold fell as we stated. The point of all this data, and I
think especially the Japan export data is that deflationary forces are
rearing their heads.
Oh and I also
wanted to mention that US oil inventories are growing. (Slowdown? Albeit US
production is rising).
And in this
context comments by Bernanke, but the scuttlebutt is that he is retiring and
that if Romney wins the QE will fall back hard. The Fed states the US growth
is ‘Moderate’ and status quo.
FedEx is laying off a lot of people. Less shipping.
US deflation
forces
Then we can
consider the US fiscal cliff, a huge rise in taxes and cuts in US budgets
items like Defense. So by December, is it not true that there is a very large
amount of selling pressure building, particularly given the fact that the US
stocks are or were nearing their all-time highs again?
And then
there is no doubt that markets are closely watching and waiting for the
outcome of the US election which for example would determine if Obama care
goes into full effect and thus causing employers to cut workers since they
have to provide more health care which is already squeezing them.
So there is
this wait and see mode, but also deflationary numbers are accumulating,
and there have been lots of large multi thousand layoff notices by large US
companies. Tension is building.
One wonders
if the US stock market is finally going to correct since there are many reasons
for it to start now, and the recent market topping, and 500 point Dow
breakdown, could indicate we are on the cusp of the beginning of a large
widespread world stock crash.
The only
thing I am thinking is this whole thing wants to wait till the US election is
over; however, another view I am beginning to take is the markets are already
taking positions that are bearish, regardless of who wins the US presidential
election. Makes some sense.
Not only
this, but macro looks bad
At our
newsletters we use lots of macro for long term trends. Especially PrudentSquirrel. Our macro indicators are really looking
bearish. We look at various major market indicators such as the CRB which I
think is a really important index. Let’s
take a look.
In any case,
we invite you to stop by and have a look at our sites.
www.PrudentSquirrel.com our futuristic macroeconomic newsletter
and
www.CurrenciesandMarkets.com our currency newsletter.
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