22 replies to this topic

[SemiBizz]

I see, very revealing, you think this is the start of a bear market.

 

I think it's a correction.

[OEXCHAOS]

Commercial Paper would have told you nothing about the May 6th 2010 FLASH CRASH....

 

Why would you or anyone use an indicator of systemic risk to predict a minor correction? In fact, it was telling you, during the decline, that there was nothing to worry about. And, indeed, there wasn't! By the end of the year, the SPX was above the peak.

That's the point. This indicator measures one thing in particular... and it's pretty good at it. Better than any of us here spouting opinions on fundamentals! 

[OEXCHAOS]

I see, very revealing, you think this is the start of a bear market.

 

I think it's a correction.

 

I am confident that this is a correction. You have a strange knack in this thread of reading in notions that are not warranted.

 

[SemiBizz]

Commercial paper ain't what it used to be... especially now that we know that the F'ed will reflate and print in order to create liquidity...

 

If you are looking for the trouble indicators now, it is in the currencies...

 

Biggest market of all.

[SemiBizz]

I'm saying commercial paper was a great indicator back when money was money.

 

Now that the central bankers have corrupted "worth" by all their mechanisms and willingness to print any amount of fiat to create liquidity...

 

You have to look at the underlying currencies in order to diagnose the problems...

 

And that started with the Euro and the Flash Crash back in May 2010...

 

Refer to my posts during that period just ahead of it regarding EUR/CHF for more color.

Edited by SemiBizz, 22 March 2017 - 09:19 AM.

[OEXCHAOS]

See, I think that this indicator does just fine and has. In 2010, at the low, the indicator was telling you that there was nothing to worry about and after the turn, it told you that it was OK to press your longs, if otherwise warranted.

 

This market runs on money and if currencies are to have any major systemic impact on our equity markets, I'm pretty confident, it'll show in perceived risk in the financial sector.

[SemiBizz]

and I think it's worthless now as an indicator, so we don't agree.

[Data]

The trigger for this decline appears to be Brexit.   It won't involve asset-backed commercial paper like the mortgage securities.  I recall that the European banks can hold national debt under the assumption that they're 100% safe.  Losses can quickly escalate with an asset that's fully margined.

Edited by Data, 22 March 2017 - 09:36 AM.

[SemiBizz]

The trigger for the decline was clearly DB...

 

When one of the largest global banks is willing to sell their shares at a 35% discount to raise cash.... that's an indication of a lack of solvency....not just liquidity.

 

Think about this, why didn't other banks jump in there and buy it up?  Because they didn't see the value.

 

I think DB is beyond bankrupt, Trump probably got the bad news from Merkel on Friday....

 

DB goes to zero, or $2, the established price in 2008 for these type of disasters.

[OEXCHAOS]

I predict that if DB's disaster is orderly it will have only minor effect upon the broad market. If it gets out of hand, or APPEARS to be getting out of hand, you'll quickly see a spike up in the commercial paper differential and that will be a major cue to be very careful with longs indeed.

 

M