AND, with the Dollar continuing it’s ascent, the Euro looks poised to get trashed in a big way. As big of a mess the US is, Europe is arguably an even bigger basket case. The Euro could easily revisit parity with the dollar at the end of this move.
Bearish Venture Capitalists
On Thursday night I attended a technology startup discussion, featuring three Bay Area venture capitalists on the panel. It was a very good lineup, with one guy in particular that I enjoyed and seemed to identify with (perhaps it was his “get out of our way, government” mantra).
He brought up an interesting point that many stimulus funds will dry up by the end of Q1, at which point the next shoe could drop. I thought that’d be a perfect fundamental backdrop against the technical warnings we’re seeing right now.
You know the math – the markets turn down, and then the fundamentals reflect the technicals. Pundits will say that the market is a “forward looking mechanism”, hence it discounts improving or deteriorating fundamentals 3-6 months ahead of time.
Personally I find that to be bogus business school logic, as I prefer to think that rising asset prices eventually are reflected in rising fundamentals, which is a more logical sequence of cause and effect than the crystal ball theory.
In any case, with markets starting to circle the bowl, the evaporation of stimulus money in 3-6 months would be the perfect fundamental “reason” for another downturn, that appears to be starting right now.
Not Good When Stocks Drop After Good “News”
Good friend Brian Hunt has been on the Intel beat for the past 16 months – he’s been using INTC’s stock price (quite successfully) as a leading indicator of where we’re heading.
On Tuesday he pointed out in his Market Notes that the “short term circle is now complete.” Last April, Intel reported bad news, and the stock shot upwards. Last week, Intel reported great news, and the stock was subsequently hammered.
Interestingly the business fundamentals look great at Intel – perhaps another justification that the fundamentals are often the last ones to go.
Anyway the INTC worm appears to have turned, which is another foreboding short-term sign.
China Starts to Slam on the Breaks
We’ve wondered before how the global economy would fair if China, the posterchild of world economic activity, faltered.
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