Bull Market Death Roll? Or geopolitics catching up with the investor?

Posted: September 26, 2014 in Uncategorized

Well I am becoming too Australian! The death roll is the kill move of the crocodile!

Anyway, the market seems to catch up with the Geopolitics.

– Russia has practically won the war for what is concerned (never wanted to conquer Ukraine, just not push it in the US arms), it is weaponizing Crimea. And definitely is in a Cold War 2 scenario rebuilding all its weapon systems and trying to undermine gold.

– People are finally realizing that the Middle East campaign will not be a walk in the park. It is more an everybody against everybody. Syrian did not welcome to be bombed also by the US. Islamic State was hit in the revenue making facilities, but quite a few other rebel factions did not realize they were a target and suffered major losses (specifically the Kohrasan group, Al Qaeda and Al Nusra affiliated). Meanwhile Lebanon and Jordan are in high alert as they fear a IS diaspora towards them.

– The biggest risk is still the end of Quantitative Ease and the likely effect on a potential credit event (it did create very weird situation …The US 10 years T Bond yield implies an higher risk then the equivalent Italian 10 bond. The High Yield credit Market in US and specially in Southern Europe (which has boomed) is experiencing a lack of liquidity).

Volatility almost at 16 is just a touch lower than serious danger.

Usually at this point the FED intervenes….but there has been a change of pattern. Practically while the SP500 and Dow Jones all the other markets are crumbling

High Alert is the norm. It can be a “return to normal”, it can be something more serious.


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