The Next Six Days Could Make Or Break Markets

Market Watch (WSJ) ^ | 9-5-2012 | Michael Casey

[blam]

The Next Six Days Could Make Or Break Markets

Sept. 5, 2012, 12:33 p.m. EDT
By Michael Casey

NEW YORK (MarketWatch) — It’s time to put down the margarita, climb out of the hammock, and perk up.

If ever there were a week to end the sleepy calm of an uneventful summer in world markets, it is the one that’s about to hit us. The next six trading days are full of what traders call “event risk,” or what we journalists call “news.” That could break currencies and other markets out of their narrow trading ranges. It will be a week to make money — or to lose it.

Here’s what’s on tap:

* Thursday, Sept. 6: Mario Draghi’s press conference. The president of the European Central Bank will be locked in a room with a hundred or so journalists, each eager to extract details on his plan for the ECB to buy the bonds of troubled European sovereign nations such as Italy and Spain. And in the meeting of the central bank’s governing council that precedes this media event, the ECB’s decision makers might actually vote on the initiative. Over the past month, European bond markets have rallied--along with the euro and various risk-sensitive assets--as Mr. Draghi has dropped hints about the plan. But although on Monday he told European lawmakers that the ECB already has the authority to buy bonds of up to three years duration, the plan doesn’t enjoy unanimous support within or outside the central bank.

(snip)

Stay alert. This could be an interesting week.

[lookout88]

Silvers up about 6 Dollars an oz in the last 2 weeks

[lookout88]

Silvers up about 6 Dollars an oz in the last 2 weeks

[SatinDoll]

“Thursday, Sept. 13: FOMC’s two-day meeting concludes. Will the Fed launch a third round of “quantitative easing” or not?..”

Jim Rogers says it is already happening: printing money to make the problem go away.

Karl Deninger — “we now have the third month confirmation to go with the regional Fed surveys...”

“In contraction were New Orders, Production, supplier deliveries, customer inventories, order backlog, exports and imports. Worse, prices increased (from decreasing sharply) and employment slowed in advancement while inventories advanced (which is bad, not good.)”

“So why isn’t the market down 300+ on what is a clear recession signal? Simple — everyone assumes “The Fed will save us” with more QE.”

Hint: They may QE, but it won’t save anything;...it simply depreciates the currency and credit currently in the system, thus destroying purchasing power which in the end is all that matters to the economy. As your purchasing power is destroyed your ability to drive economic activity is also destroyed.”

Hmmmm....so, this is where we take all our money out of institutions, buy gold/silver, and bury it in the backyard, right?

[gotribe]

I can’t see anything in that report that would be negative for the physical metal.

[Lancey Howard]

It's Coming: One Pro Sees Big Stock Selloff in 10 Days

An equity strategist for Goldman Sachs is predicting a September selloff that happens so rapidly he is telling clients to protect themselves before Sept. 14.

The reason: Market disappointment over key meetings of the European Central Bank and Federal Reserve—all within the next 10 days.

[NVDave]

I think one of the reasons why the Fed is being quiet about whether they are or aren’t pulling a QE3 is that they must have recognized by now (especially with the most recent month’s data) that we’re in a liquidity trap.

And they have no one else to blame but themselves. Oh, sure, they can carp a bit about the money flowing into US T’s as a safe haven from the EU, but that goes only so far here. The Fed are the clown posse who has deliberately depressed yields on US debt... with none of the expected upsides predicted back in 2009.

[Theoria]

For Stocks, Is This 1987 All Over Again?

I still say the whole garbage indicator is something to consider.

[chuckles]

Bernanke has been telling us not to worry about rates for the next couple of years, but if he ever STOPS printing money, the rates will shoot up and we can't pay over 1% or 2% higher rates. We already pay about $500 billion a year for interest on $16 trillion. Try to imagine if rates were allowed to get to 6%. At some point we will run out of ink or paper and all hell will be let loose. If you noticed, the debt clock is still spinning, so in 2 years, we will be at least $19 trillion.

What then?

I'm just afraid it too late even for Romney/Ryan to win. We are in deeper doo doo than anyone is sayin, IMHO. If Obama squeaks one out, I'm done. I will be in gold, beans, and bullets, by Wed. after the election. I'm 61 and in bad health. I don't think I have enough left in my IRA to make it for another 10 years, so it will be a game changer for me. I would rather do things the easy way with an R&R win, but I'm not even sure they can fix this.

[TexasFreeper2009]

I am thinking the same as you. I really think it might be too late for anyone to fix this at this point. But the final nail in the coffin would be Obama’s reelection.

Ironically our only “hope” lies with Romney

[StAnDeliver]

“So why isn’t the market down 300+ on what is a clear recession signal? Simple — everyone assumes “The Fed will save us” with more QE.”

Until someone trusted points out that a QE3 rally is irrational exuberance by a market completely cut off from economic reality by free money.

Then it will get weird.

[AlexW]

“a market completely cut off from economic reality by free money.”

---

i am far from being a market guru, and i do not even play one on FR, but it has been my contention that today’s stock market is nothing like our father’s market.
It is now fat cats like Soros and Buffet, aided by very sophisticated computer programs doing the pump and dump.
It is little more then a high tech game.

[TomasUSMC]

More Qe too

[cherry]

I don’t know if Romney can fix it, but I’ll sleep better knowing we got a real man in charge...

[cherry]

maybe the buy and hold mantra worked for some people, but not for us....anything we’ve “invested” in as far as mutual funds have basically just sat there....we’ve missed the stockmarket boon, and we missed the sexual revolution by a few months....just our luck...

[vanilla swirl]

Why do I keep hearing the same thing about the same time period from many sources. Practical secular sources as well as tin foil hat/prophetic sources.

Of course historically the market almost always goes down this time of year.

[1010RD]

Is there a time or country in history where the Feds strategy has worked? Saying it would have been worse is their only recourse.

[NVDave]

When the Fed broke the back of inflation from ‘79 through ‘83, their strategy worked. They wanted a sound dollar, they got a sound dollar for money.

Since about 1998, the Fed has been nothing more or less than a backstop for stupidity and feckless arrogance in the US banking system. That strategy never works - just ask the Japanese and the BOJ.

[blam]

"I am thinking the same as you. I really think it might be too late for anyone to fix this at this point. But the final nail in the coffin would be Obama’s reelection."

I agree...I think it's to late for anyone to fix...we'll have to go through a collapse before there is a REAL recovery. I'm 69 and figuring that I probably won't make it to 'the other side' of the recovery.

[TexasFreeper2009]

I think the best thing to do at this point is to study the great depression and who made money during it (many made massive fortunes)

and try to do your best to learn from that research