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business newsSound the Horns! Here Comes the Central Bank Cavalry
By
Lloyd Khaner
Dec 06, 2011 3:50 pm
Enjoy it while it lasts because while we're out of the fire, we're back into the frying pan.
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When in doubt, pump it out.
Central banks of the world step up in unison to offer cheap lines of liquidity to any country with a European-sounding name. And if that wasn’t enough, China has cut bank reserve ratios and Europe has started taking legitimate baby steps toward fiscal austerity and financial unity.
Enjoy it while it lasts because while we're out of the fire, we're back into the frying pan.
"Lloyd's Wall of Worry" has dropped to 26 blocks this week, showing a slight easing of anxiety in the markets. For specific comments about each of the fears facing investors right now, click on the graphic below. You can also scroll down for a text-only version of this column and an explanation of how it can be used as an investing tool.
Lloyd's Wall of Worry
QE: Rumors starting that the Fed may be setting up to target mortgages with QE3. They can start with mine.
U.S. ECONOMY: Fighting the good fight…against politicians worldwide.
UNEMPLOYMENT: New plan! Everyone without a job just stop looking for four weeks and we can drop 0.5% off the unemployment rate every month. I said it was a plan, not a good plan.
INVESTOR SENTIMENT: As Uncle Ira, who refuses to get any news flow, says: At times like this you really get the full meaning of expressions like "ignorance is bliss."
HOUSING CRISIS: Can’t sell them. Can’t buy them. What’s left to do? I guess live in them – I wonder if there is a cable show about how to do that?
INFLATION: Economists worldwide are equally afraid of deflation and inflation. Me, I’m just afraid of the economists.
CRISIS OF CONFIDENCE: I’m confident. I’m confident that we will remain in some stage of crisis ad infinitum.
EUROPEAN ECONOMY: An afterthought within the realm of a potential catastrophic collapse of the EU. You just can’t make this stuff up.
THE EUROPEAN UNION: A question mark…followed by endless lines of wraparound exclamation points.
SOVEREIGN DEBT: Short term, it’s higher-yielding debt. Long term, roadkill.
BOND VIGILANTES: Grabbing the wheel of financial justice and not letting go.
CREDIT RATINGS AGENCIES: Busy, busy, busy!
GREECE: “Nuthin’ from nuthin’ leaves nuh-thin’....”
ITALY: Considering a plan to prevent people from paying their taxes in-person in cash. Huh, what, eh?
ECONOMIC LEADERSHIP: What light through yonder Franco-German window breaks?
POLICY CLIFFS: Precipice countdown watch now on unemployment benefits and U.S. payroll tax cut extensions. And the failure-blaming has already begun.
BANKS: In survival mode until further notice.
VOLATILITY: Getting worse, rattling whatever nerves we all have left and all the sedatives in the world won’t help anymore, so who do we turn to to calm our weary minds…? Hey Mike! “Say ahhhh….”
HIGH FREQUENCY TRADING:
Lloyd: Five percent down one week, seven up the next. What’s your poison of choice?
HAL: ETFs. “Cause it’s once, twice, three times the leverage…”
CHINA: The last driver of global growth and a couple of cylinders just cut out.
CREDIT DEFAULT SWAPS: When you start seeing them in the corner of your business news TV screen you know you can stop being concerned with them. Until then, check them every five minutes 24/7.
FINANCIAL FIRM FAILURES: More to come. When? Who? When we least expect it and anybody’s guess.
IRAN: Not an Arab Spring. A Persian Winter perhaps?
CORRELATION: “I didn’t know we were supposed to check our brains at the door,” said Uncle Miltie.
CREDIT WATCH: “15 European Countries on the wall, 15 European countries, if one of those European countries happens to fall, 14 European countries on the wall….”
MIDDLE EAST: Unsettled, unsettling and currently underestimated.
What Is Lloyd's Wall of Worry?
by Lloyd Khaner
Welcome to my at-a-glance guide to the issues facing investors this week -- a unique tool for traders and money managers.
Typically the term "wall of worry,” refers to the entire body of concerns influencing stock market action. When the wall is high, meaning the market is nervous, stocks tend to get cheaper.
This wall of worry is even more specific. Every week I list the exact concerns in the marketplace and use the list to help me make buying and selling decisions. As I like to say, "Buy fear, sell cheer."
In other words, once the the wall rises above 15 blocks, start looking for deals. If the worry count sinks below 10, consider selling; prices have likely peaked.
Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
Central banks of the world step up in unison to offer cheap lines of liquidity to any country with a European-sounding name. And if that wasn’t enough, China has cut bank reserve ratios and Europe has started taking legitimate baby steps toward fiscal austerity and financial unity.
Enjoy it while it lasts because while we're out of the fire, we're back into the frying pan.
"Lloyd's Wall of Worry" has dropped to 26 blocks this week, showing a slight easing of anxiety in the markets. For specific comments about each of the fears facing investors right now, click on the graphic below. You can also scroll down for a text-only version of this column and an explanation of how it can be used as an investing tool.
Lloyd's Wall of Worry
QE: Rumors starting that the Fed may be setting up to target mortgages with QE3. They can start with mine.
U.S. ECONOMY: Fighting the good fight…against politicians worldwide.
UNEMPLOYMENT: New plan! Everyone without a job just stop looking for four weeks and we can drop 0.5% off the unemployment rate every month. I said it was a plan, not a good plan.
INVESTOR SENTIMENT: As Uncle Ira, who refuses to get any news flow, says: At times like this you really get the full meaning of expressions like "ignorance is bliss."
HOUSING CRISIS: Can’t sell them. Can’t buy them. What’s left to do? I guess live in them – I wonder if there is a cable show about how to do that?
INFLATION: Economists worldwide are equally afraid of deflation and inflation. Me, I’m just afraid of the economists.
CRISIS OF CONFIDENCE: I’m confident. I’m confident that we will remain in some stage of crisis ad infinitum.
EUROPEAN ECONOMY: An afterthought within the realm of a potential catastrophic collapse of the EU. You just can’t make this stuff up.
THE EUROPEAN UNION: A question mark…followed by endless lines of wraparound exclamation points.
SOVEREIGN DEBT: Short term, it’s higher-yielding debt. Long term, roadkill.
BOND VIGILANTES: Grabbing the wheel of financial justice and not letting go.
CREDIT RATINGS AGENCIES: Busy, busy, busy!
GREECE: “Nuthin’ from nuthin’ leaves nuh-thin’....”
ITALY: Considering a plan to prevent people from paying their taxes in-person in cash. Huh, what, eh?
ECONOMIC LEADERSHIP: What light through yonder Franco-German window breaks?
POLICY CLIFFS: Precipice countdown watch now on unemployment benefits and U.S. payroll tax cut extensions. And the failure-blaming has already begun.
BANKS: In survival mode until further notice.
VOLATILITY: Getting worse, rattling whatever nerves we all have left and all the sedatives in the world won’t help anymore, so who do we turn to to calm our weary minds…? Hey Mike! “Say ahhhh….”
HIGH FREQUENCY TRADING:
Lloyd: Five percent down one week, seven up the next. What’s your poison of choice?
HAL: ETFs. “Cause it’s once, twice, three times the leverage…”
CHINA: The last driver of global growth and a couple of cylinders just cut out.
CREDIT DEFAULT SWAPS: When you start seeing them in the corner of your business news TV screen you know you can stop being concerned with them. Until then, check them every five minutes 24/7.
FINANCIAL FIRM FAILURES: More to come. When? Who? When we least expect it and anybody’s guess.
IRAN: Not an Arab Spring. A Persian Winter perhaps?
CORRELATION: “I didn’t know we were supposed to check our brains at the door,” said Uncle Miltie.
CREDIT WATCH: “15 European Countries on the wall, 15 European countries, if one of those European countries happens to fall, 14 European countries on the wall….”
MIDDLE EAST: Unsettled, unsettling and currently underestimated.
What Is Lloyd's Wall of Worry?
by Lloyd Khaner
Welcome to my at-a-glance guide to the issues facing investors this week -- a unique tool for traders and money managers.
Typically the term "wall of worry,” refers to the entire body of concerns influencing stock market action. When the wall is high, meaning the market is nervous, stocks tend to get cheaper.
This wall of worry is even more specific. Every week I list the exact concerns in the marketplace and use the list to help me make buying and selling decisions. As I like to say, "Buy fear, sell cheer."
In other words, once the the wall rises above 15 blocks, start looking for deals. If the worry count sinks below 10, consider selling; prices have likely peaked.
Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
No positions in stocks mentioned.
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