Market Snapshot
Podcasts

SEM Podcasts:  


Best of the Blog, 6/15/13 -- Is the Fed losing control of rates?

Best of the Blog, 6/8/13 -- Employment & the Fed

Best of the Blog, 6/1/13 -- Winning the retirement game

Best of the Blog, 5/25/13 -- Why we should be watching Asia

Best of the Blog, 5/18/13 -- Is the Fed really going to taper off QE?

Best of the Blog, 5/11/13 -- How long can the Fed keep this up?

Best of the Blog, 5/4/13 -- Should we sell in May?

Best of the Blog, 4/27/13 -- Our dysfunctional government

Best of the Blog, 4/20/13 -- Market vs. the Economy

Best of the Blog, 4/13/13 -- Is it sundown in America?

Best of the Blog, 4/6/13 -- Did the sequester cause the slowdown?

Debt, Leverage, & Addiction -- Part 1  Part 2   Part 3  

Best of the Blog, 3/23/13 -- Consequences of Perpetual Bailouts

Best of the Blog, 3/16/13 -- Is the Dow's streak a buy signal?

Best of the Blog, 3/9/13 -- Does Goldilocks have any blemishes?

Best of the Blog, 3/2/13 -- What does Sequestration mean?

Best of the Blog, 2/23/13 -- Recency Bias

Best of the Blog, 2/16/13 -- The REAL State of the Union

Best of the Blog, 2/9/13 -- Is the economy causing the outbreak in violence?

Best of the Blog, 2/2/13 -- What are we getting from all this debt?

Best of the Blog, 1/26/13 -- Are we in another bubble?

Sunshine Week, 1/24/13 -- Stuck in your retirement plan

Sunshine Week, 1/23/13 -- The time to buy & hold

Sunshine Week, 1/22/13 -- Keeping things in perspective

Sunshine Week, 1/21/13 -- The Pending Forest Fire

Best of the Blog, 1/19/13 -- What did we learn from our client seminars?

Best of the Blog, 1/12/13 -- Short-term vs. Long-term investing

Best of the Blog, 1/5/13 -- What does the fiscal cliff deal mean for the economy?

Sunshine Week, 9/20/12 - Is America going Backward?

Sunshine Week, 9/19/12 - Opportunities in a tough economy

Sunshine Week, 9/18/12 - Is your 401k safe?

Sunshine Week, 9/17/12 - The stealth depression

History of the Fed, 6/19/12


SEM Presentations:

4th Quarter Economic Update- December 11, 2012

Can the Fed Save the Economy? - September 27, 2012

3rd Quarter Economic Outlook - July 10, 2012

What can we expect the rest of 2012? - April 19, 2012

What will 2012 look like? - January 9, 2012

Are we headed towards recession? - October 7, 2011

What is happening with the economy? - September 26, 2011


Podcast Archive  

 


Watching & Waiting Print
Written by Jeff Hybiak   
Monday, 24 October 2011 05:47

This weekend marked the 13th "emergency" summit in Europe in the last 22 months.  So far we learned that European leaders are serious about solving the crisis this time with a "bazooka" and for now plan to announce what that bazooka will be by Wednesday.  Two questions will be asked when it is finally announced -- 1) Will it actually work?  2) Did they wait too long?

As far as I can see, about the only thing they are good at in Europe is making promises to solve a problem and then holding summits to come up with plans to solve the problem.  What they aren't good at is either doing enough to fix the problem and/or actually following through.  We've seen it in Greece and Italy where they announce spending cuts to help reign in their ballooning deficits, yet can't seem to actually execute the cuts.

So while we watch and wait for the latest solution, the banking system in Europe continues to struggle.  ZeroHedge provided an updated chart of the liquidity stress going on in their banking system.  Note the quick drop when Germany and France announced this weekend's summit at the beginning of October & how quickly banks have had to resume borrowing from the ECB to meet their funding needs.

Meanwhile the market appears to have broken out of the trading range that started following the U.S. Debt Ceiling "solution" and subsequent downgrade of America.  (By the way, does anybody realize that the "Super Committee" has less than a month to come up with the actual spending cuts?)

The problem of course is that so many people use these "levels" as either their entry or exit points you often get a "false" breakout (or breakdown).  With the volume continuing to decline, our systems remain skeptical that the market is giving an "all-clear" signal.  Just like we saw following the U.S. debt ceiling solution, we could easily see the market sell-off regardless of what is announced on Wednesday.  Once the plan is announced, everyone will begin asking, 1) Will it actually work?  2) Did they wait too long?

We enter the week with EGA 23% invested in equities & EPA with no equity exposure.  If institutional participation picks up this week on a rally we could easily leg back into the market.  As it is with so much uncertainty out there, sitting on the sidelines is a pretty comfortable place to be.


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