Comments on: Look Out Below! http://www.ritholtz.com/blog/2009/11/look-out-below-8/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Sun, 21 Mar 2010 09:08:51 -0400 http://wordpress.org/?v=2.9.2 hourly 1 By: Kunal http://www.ritholtz.com/blog/2009/11/look-out-below-8/comment-page-1/#comment-237758 Kunal Sat, 28 Nov 2009 06:58:45 +0000 http://www.ritholtz.com/blog/?p=44826#comment-237758 I am not inclined to believe that it is a kneejerk reaction. Rising asset prices due to liquidity flow has masked a lot pain that needed to be played out. Equity prices all over the world has moved up much ahead of economic fundamentals. Just like the pre crisis period, risk has again been seriously under-priced, which was reflected in the CBOE VIX plummeting to as low as 20 before the Dubai crisis emerged. <a href="http://kunalsthoughts.weebly.com/1/post/2009/11/risk-perception-and-short-memory.html" rel="nofollow">Yesterday</a> it jumped to 24 and change. While the Dubai incidence, in itself, is no big deal, it is symptomatic of the larger problem that is waiting to be unfolded. As a large number of financial giants started to report better numbers on the back of write-ups following rally in asset prices, suddenly the world seemed a better place again. Overall, the financial sector fundamentals are still weak and the real sector fundamentals questionable. Brace for more such pains in the coming months. I am not inclined to believe that it is a kneejerk reaction. Rising asset prices due to liquidity flow has masked a lot pain that needed to be played out. Equity prices all over the world has moved up much ahead of economic fundamentals. Just like the pre crisis period, risk has again been seriously under-priced, which was reflected in the CBOE VIX plummeting to as low as 20 before the Dubai crisis emerged. Yesterday it jumped to 24 and change.

While the Dubai incidence, in itself, is no big deal, it is symptomatic of the larger problem that is waiting to be unfolded. As a large number of financial giants started to report better numbers on the back of write-ups following rally in asset prices, suddenly the world seemed a better place again.

Overall, the financial sector fundamentals are still weak and the real sector fundamentals questionable. Brace for more such pains in the coming months.

]]> By: Jessica6 http://www.ritholtz.com/blog/2009/11/look-out-below-8/comment-page-1/#comment-237639 Jessica6 Fri, 27 Nov 2009 17:40:30 +0000 http://www.ritholtz.com/blog/?p=44826#comment-237639 @Mike in Nola I find Mish has excellent analysis whenever he's not on his Libertarian anti-union/stuff the workers in general bender. While I agree when it comes to public sector unions, the steady erosion of workers' rights with the lions' share of the benefits of increases in productivity going to the top is one of the major contributors to this financial crisis. Also, I don't think all gov't spending is bad and that it can't stimulate the economy - but it has to be the RIGHT spending and that's the current problem. But he was certainly correct in his post last month "A Watched Bubble Never Pops" in warning that while everyone was obsessing about possible dollar collapse the most likely blow-up would be elsewhere. Also agree with your 8:12 post... @Mike in Nola

I find Mish has excellent analysis whenever he’s not on his Libertarian anti-union/stuff the workers in general bender. While I agree when it comes to public sector unions, the steady erosion of workers’ rights with the lions’ share of the benefits of increases in productivity going to the top is one of the major contributors to this financial crisis. Also, I don’t think all gov’t spending is bad and that it can’t stimulate the economy – but it has to be the RIGHT spending and that’s the current problem.

But he was certainly correct in his post last month “A Watched Bubble Never Pops” in warning that while everyone was obsessing about possible dollar collapse the most likely blow-up would be elsewhere.

Also agree with your 8:12 post…

]]> By: jlj http://www.ritholtz.com/blog/2009/11/look-out-below-8/comment-page-1/#comment-237629 jlj Fri, 27 Nov 2009 17:14:29 +0000 http://www.ritholtz.com/blog/?p=44826#comment-237629 I wonder if any of the sheiks will go to debtors prison, until they pay back everything? Or do their laws not apply to themselves? I wonder if any of the sheiks will go to debtors prison, until they pay back everything? Or do their laws not apply to themselves?

]]> By: Futures Down 235 as Asian Markets Tumble 5% | The Big Picture http://www.ritholtz.com/blog/2009/11/look-out-below-8/comment-page-1/#comment-237501 Futures Down 235 as Asian Markets Tumble 5% | The Big Picture Fri, 27 Nov 2009 12:22:47 +0000 http://www.ritholtz.com/blog/?p=44826#comment-237501 [...] noted yesterday (Look Out Below!), the sovereign debt default warning by the nation of Dubai has caused some [...] [...] noted yesterday (Look Out Below!), the sovereign debt default warning by the nation of Dubai has caused some [...]

]]> By: M.G. in Progress http://www.ritholtz.com/blog/2009/11/look-out-below-8/comment-page-1/#comment-237499 M.G. in Progress Fri, 27 Nov 2009 11:32:50 +0000 http://www.ritholtz.com/blog/?p=44826#comment-237499 The Dubai crisis is simply reminding us: a) the financial crisis is not over b) any debt needs to be paid back, no matter if it's private or sovereign or a mix of the two... http://mgiannini.blogspot.com/2009/11/rich-countries-bond-defaults-or-debt.html The Dubai crisis is simply reminding us: a) the financial crisis is not over b) any debt needs to be paid back, no matter if it’s private or sovereign or a mix of the two…
http://mgiannini.blogspot.com/2009/11/rich-countries-bond-defaults-or-debt.html

]]> By: Mike in Nola http://www.ritholtz.com/blog/2009/11/look-out-below-8/comment-page-1/#comment-237497 Mike in Nola Fri, 27 Nov 2009 09:44:41 +0000 http://www.ritholtz.com/blog/?p=44826#comment-237497 Mish says it well: "Given the US markets were closed yesterday, I have the same question floating in my mind as a day ago, wondering if this is another one day wonder rally in the dollar (and another one day wonder selloff in equities) or if this is the start of a long awaited correction in both the dollar and equities. Time will tell, but it will not be pretty for dollar bears or equity bulls if it is." Mish says it well:

“Given the US markets were closed yesterday, I have the same question floating in my mind as a day ago, wondering if this is another one day wonder rally in the dollar (and another one day wonder selloff in equities) or if this is the start of a long awaited correction in both the dollar and equities.

Time will tell, but it will not be pretty for dollar bears or equity bulls if it is.”

]]> By: Mike in Nola http://www.ritholtz.com/blog/2009/11/look-out-below-8/comment-page-1/#comment-237496 Mike in Nola Fri, 27 Nov 2009 09:38:44 +0000 http://www.ritholtz.com/blog/?p=44826#comment-237496 CNBC headlines are funny: about the holiday shopping season as if anyone is watching that right now. CNBC headlines are funny: about the holiday shopping season as if anyone is watching that right now.

]]> By: Mike in Nola http://www.ritholtz.com/blog/2009/11/look-out-below-8/comment-page-1/#comment-237495 Mike in Nola Fri, 27 Nov 2009 09:37:02 +0000 http://www.ritholtz.com/blog/?p=44826#comment-237495 Rather amazing. It's like all the carry traders are heading for the exits at once with treasuries and the dollar soaring. Euro/Dollar from 1.51 to 1.485 in one day. US 2yr down to .63% 5 yr to .199% lowest since May 10 yr down to 3.185 lowest since May bypassing what Lefty thought might be resistance. Oil down almost $4/ 5% overnight to $74 Gold down 35 to 1153 DJ futures down over 200 SP over 30 Rather amazing. It’s like all the carry traders are heading for the exits at once with treasuries and the dollar soaring.

Euro/Dollar from 1.51 to 1.485 in one day.

US 2yr down to .63%
5 yr to .199% lowest since May
10 yr down to 3.185 lowest since May bypassing what Lefty thought might be resistance.

Oil down almost $4/ 5% overnight to $74

Gold down 35 to 1153

DJ futures down over 200
SP over 30

]]> By: tradeking13 http://www.ritholtz.com/blog/2009/11/look-out-below-8/comment-page-1/#comment-237493 tradeking13 Fri, 27 Nov 2009 08:02:22 +0000 http://www.ritholtz.com/blog/?p=44826#comment-237493 You need to update your Futures screen-shot...it's gotten a lot worse. DJIA INDEX 10,125.00 -317.00 S&P 500 1,067.70 -41.20 NASDAQ 100 1,724.75 -69.50 OUCH! You need to update your Futures screen-shot…it’s gotten a lot worse.

DJIA INDEX 10,125.00 -317.00
S&P 500 1,067.70 -41.20
NASDAQ 100 1,724.75 -69.50

OUCH!

]]> By: Trainwreck http://www.ritholtz.com/blog/2009/11/look-out-below-8/comment-page-1/#comment-237487 Trainwreck Fri, 27 Nov 2009 06:25:06 +0000 http://www.ritholtz.com/blog/?p=44826#comment-237487 CDS explosive bolts are starting to explode. Time for debt evaporation part 2? CDS explosive bolts are starting to explode. Time for debt evaporation part 2?

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