Posted on 09/05/2011 4:32:44 PM PDT by TigerLikesRooster
Tuesday's Market Preview Is Not Pretty: El-Erian
Published: Monday, 5 Sep 2011 | 1:51 PM ET
By: Mohamed El-Erian, CEO and Co-CIO, Pimco
To state the obvious, it is shaping up to be a difficult return for U.S. markets after the Labor Day break as European stock plunge and the European Central Bank (ECB) loses some of the control it has been exercising on the Euro-zone's sovereign bond market.
The best way to understand what is going on is through the following simplified sequence: banks-sovereigns-policies.
Specifically:
· Banks stocks led the debacle on European bourses Monday, with drops of some 5-12 percent in a single day.
· With so many European banks holding so much European government debt on their balance sheets, the dramatic sell-off in their shares reflects mounting pressures in the sovereign bond markets.
· Several records have been set today, from a 92 percent annualized yield on very short-dated (6-month) Greek bonds to the risk spreads on Italian and Spanish CDS (credit default swaps).
· But an important element of the story is elsewhere. It has to do with the ECB's ability to influence the yield on the Italian ten-year bond.
· For a while, outright ECB purchases of Italian bonds on the secondary market had succeeded in keeping that yield at or below the 5 percent level for the "old" Italian ten-year benchmark bond. In recent days, however, the yield has migrated upwards and today it touched some 5.5 percent.
(Excerpt) Read more at cnbc.com ...
P!
Last I looked, Dow futures had gone south more than 200 points. I own lots of Pimco. Is this guy preparing me for some real bad news?
Any day when O is in charge is never good.
How do you like that John “no balls” Mcain?
After the shameful display put on today by Barry and his union thugs, I would be surprised if the stock markets didn’t take a plunge also.
DJIA futures down 236, SP500 down 30.
yea, it will be another ‘interesting’ day on the markets.
Wheeeeee.
Volatility from here to infinity. A trader’s delight, an investor’s nightmare.
This is what Obama and the rest of the progressive thugs want. The total destruction of the United States Economic system, so that we are one in the same with Europe..this is their utopia they have longed for
You don’t hold stocks over the weekend with these bastards in charge.
“The jury is still out as to whether the ECB “allowed” the yield to rise, as a way of putting pressure on the Italian authorities (and other European fiscal agencies) to get their act together, or whether the ECB itself is getting “overwhelmed” by market dynamics. But either way, European markets are troubled.”
Nice transparency you got in Europe, must really be helping the situation. They don’t know whether the ECB is in charge or irrelevant. Wonderful.
The first default domino is leaning and will go soon.
Between Europe’s problems and Obama’s jobs speech on Thursday, there should be some great buys on blue chip dividend stocks by Friday.
And oil might go under $80 by Monday.
Maybe President Obama could say something to calm the markets.....on second thought, maybe he’d better remain silent.
Clueless!
Well, that's not good for Putin.
We fools have turned the reigns of the world over to these banksters and financiers who run their own elite club not to capitalize for production, but to profit by making deals, and many of the deals have been at the expense of taxpayers and others.
Central banks have been at the epicenter of banks making money for banksters while destroying economies. Until the influence of bankers is replaced by the influence of producers, I’m not at all confident of the world economy.
“And oil might go under $80 by Monday “
Don’t worry - someone will poot in the Middle East and it will go back up again.
Barry, Biden and the union thugs...
What website gives you information about DOW futures? Thanks.
bad week ahead
ironically I have come to consider a long term investment as anything I leave in the stock market over a weekend
especially a 3 day weekend
luckily I got out of stocks on the last trading day of August
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