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business newsInvestors Fear Economic Slowdown, Inflation
By
Lloyd Khaner
May 03, 2011 12:00 pm
Despite a lower unemployment rate, the stock charts show unprecedented confusion -- just one of 18 worries affecting world markets this week.
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QE II: Fed Ben crooning his heart out, “When the road gets dark, and you can no longer see, just let my love throw a spark, An’ have a little faith in me. Have a little faith in me, have a little faith in me…”
U.S. ECONOMY: Advanced Capitalism knows no shame when it comes to economic indicators. Now the rising Divorce Rate is being cited as a clear sign of an improving economy. Heck, we might as well put it to music -- “I’ve got all my life to live, I’ve got all my love to give, And I’ll survive, I will survive, hey, hey...”
UNEMPLOYMENT: The U.S. rate is dropping, yes. But not as quickly as its confidence level, its housing prices or its hopes for the future.
U.S. DEBT CEILING: No need to fear, the “Gang of Six” is here! For those of you keeping score at home these are the six Congressmen (Congresspeople? Congresshumans? Congressincompetents?) on the inside working to settle this debt fight before the U.S. defaults on its debt payments. Can you say, S.O.S.?
INVESTOR SENTIMENT: "Don’t worry, be happy now…”
HOUSING CRISIS: Denial hits Mumbai! Home sales at a two-year low, home inventory at all time high, home prices rocket to record high. Greed knows no boundaries.
INFLATION: When all rational thought is gone, we still have bluesman Louis Jordan to tell it to us straight, “I'm trying to make a living, I can't save a cent. It takes all of my money, Just to eat and pay my rent, I got the blues, Got those inflation blues…”
SAUDI ARABIA: Oil surging past $110+ per barrel and they cut output by 800,000 bpd (barrels per day) due to an “oversupplied market.” Hey S.A., “Don't tell me that you're innocent. Because it insults my intelligence and it makes me very angry.”
STOCK MARKET TECHNICALS: “Agita, my gumba in the banzone…” Picture higher highs, higher lows, lower volumes and no historical precedence for this kind of action.
EGYPT: Starting to blow things up – like the natural gas line in the Sinai. Professionally speaking, this is not a good sign.
OIL PRICES: I’m predicting a 10-20% drop in prices at the gas pump in the U.S. by the end of June 2011. But just in case, I’m also gas fracking in my backyard, growing corn ethanol in my bathtub, covering my kids with solar panels and, well, you don’t want to know what I’m doing with my biomass pile.
JASMINE REVOLUTIONS: Syria front and center. What the people want, what the government wants, what the rest of the world wants -- check back next week because no one seems to know yet.
LIBYA: Not going away. Not going well. And likely not going to end quietly.
JAPAN: Wall Street’s supply chain scapegoat du jour. Touching.
CHINA: Complaining about all things outside their walls causing inflation. Someone shoot them a text reminding them that their buying of a billion of everything in the world plus a few whole countries might be having an impact as well.
RING OF FIRE: For sanity’s sake, can we take the spring and summer off?
CURRENCIES: My kids now want their allowance in gold or silver instead of the Chinese Yuan they made me start paying them two years ago. Geez, kids nowadays.
SOVEREIGN DEBT: “Its all good,” as two key countries in Europe are off the hook for now. China just rode in to buy $13 billion of Spanish bank debt and Italy’s Draghi is about to take the helm at the ECB.
Editor's Note: This is a text version of Lloyd's Wall of Worry. For our graphic page, click here. For more on how to read the Wall of Worry, see below.
What Is Lloyd's Wall of Worry?
By Lloyd Khaner
Since the 1930s, when Benjamin Graham created the concept of "Mr. Market," investors have been trying to figure out what events or fears are influencing the market. Investors call this body of concerns the "Wall of Worry."
Oddly, no one has ever kept a list of the worries, except for me. I've been managing money for the last 20 years and keeping a running tally of all the things that are bothering investors. It's an important part of my value investment discipline, because when Mr. Market gets nervous, stocks tend to get cheaper.
As Warren Buffett says: "Be fearful when others are greedy and be greedy when others are fearful."
Click on the image below to view the interactive Wall of Worry page.
No positions in stocks mentioned.
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