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business newsSo Much For a Sleepy August: These 21 Fears Still Face Investors
By
Lloyd Khaner
Aug 03, 2011 2:30 pm
The European debt crisis takes center stage again, as doubts linger about the US economy.
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Time was professional investors could indulge in some beach reading come August. This year is shaping up to be an entirely different kind of summer.
It's America's turn to deal with austerity measures, while Europe remains locked in a debt crisis death grip. At home consumers are backing away from spending and the job market is dragging. The economic outlook is sparking renewed discussion of a double dip recession.
Following this week's 11th hour debt deal, "Lloyd's Wall of Worry" has dropped from its recent high of 26 blocks, but 21 grave concerns remain on the list. For value investors, market place anxiety is high enough to inspire buying.
For more on how to use this column as an investing tool, see "What is Lloyd's Wall of Worry?" below, or check out the graphic version of this page. For a look at the the specific worries making investors nervous this week, keep reading.
QE III: As Walt Frazier might say if he was calling the play-by-play on the markets: “As the U.S. economic numbers get punkier the idea of more stimulus looks funkier!”
U.S. ECONOMY: GDP, ISM, PMI, NFP and sundry other 3-letter jargoneeze are flagging big time. OMG.
UNEMPLOYMENT: Wall Street shedding 50-100k jobs won’t help, but it sure will make for some populist rabble rousing for Main Street Politicians.
AUSTERITY: First Europe and the UK, and now the US. Hmm... begs the question as to who will be the binge buyers at the global tchotchke bazaar.
INVESTOR SENTIMENT: Elvis has left the building.
HOUSING CRISIS: Best described with a vulgar, four-letter word that strikes horror into the hearts of home sellers nationwide: R-E-N-T.
INFLATION: Some of the cheapest labor rates just got a little less cheap as Vietnam’s inflation rate lurches up over 20%.
BOND VIGILANTES: “We’re baaaaack.” And spending a gloriously torrid summer in Europe.
ARAB SPRING: Civil wars are never civil especially when one side has most of the weapons and the other side has most of the passion. Are you catching my drift Syria?
LIBYA: Still miserable. Still nowhere.
JAPAN: About to jump into the already crowded currency debasing pool.
CHINA: Extending their reach a bit as a fleet of Sino sloops tack their way into the South China Sea. Let’s hope live ammo military exercises aren’t part of this regatta.
U.S. CONSUMER SPENDING: Nothing like a quasi-buyers strike coming into the back-to-school season. “Hey, Ma! Does that mean we don’t have to go back to school this year?”
SOVEREIGN DEBT: Now entering the fray it’s...”Cyprus”. Sitting coyly off the coast in the Mediterranean at 35°00 N latitude and 33°00 E longitude, everyday is a sunny day even those when you’re crying out to the ECB for a bailout.
POLICY MISTAKE: Global political leaders are like kids in a candy store: “So many potential screw-ups to choose from! Can I pick more than one? Please, please, please!”
EUROPEAN CENTRAL BANK: This may be the August of their discontent.
GREECE: Got a $109 billion handshake from The Euro Dad Countries to keep it going for a while. Yeah, that’s gonna last until someone thinks to shout, “Toga Party!”
U.S. DEBT RATING: To downgrade or not to downgrade, that is the question…”whether 'tis nobler in the mind to suffer the slings and arrows of outrageous fortune, or to take arms against a sea of troubles, and by opposing end them? To die: to sleep; No more; and by a sleep to say we end the heart-ache and the thousand natural shocks!” My fancy way of saying they should be cut.
ITALY & SPAIN: Financing back up over 6%. Fear back up over 100%.
ECONOMIC LEADERSHIP: M.I.A.
BIPARTISAN DEBT-REDUCTION COMMITTEE: New deficit cutting deadline du jour takes us to November 24, 2011, a.k.a. Thanksgiving Day. And a Turkey it will be.
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.
Click on the image below to view the graphic Wall of Worry page.
It's America's turn to deal with austerity measures, while Europe remains locked in a debt crisis death grip. At home consumers are backing away from spending and the job market is dragging. The economic outlook is sparking renewed discussion of a double dip recession.
Following this week's 11th hour debt deal, "Lloyd's Wall of Worry" has dropped from its recent high of 26 blocks, but 21 grave concerns remain on the list. For value investors, market place anxiety is high enough to inspire buying.
For more on how to use this column as an investing tool, see "What is Lloyd's Wall of Worry?" below, or check out the graphic version of this page. For a look at the the specific worries making investors nervous this week, keep reading.
QE III: As Walt Frazier might say if he was calling the play-by-play on the markets: “As the U.S. economic numbers get punkier the idea of more stimulus looks funkier!”
U.S. ECONOMY: GDP, ISM, PMI, NFP and sundry other 3-letter jargoneeze are flagging big time. OMG.
UNEMPLOYMENT: Wall Street shedding 50-100k jobs won’t help, but it sure will make for some populist rabble rousing for Main Street Politicians.
AUSTERITY: First Europe and the UK, and now the US. Hmm... begs the question as to who will be the binge buyers at the global tchotchke bazaar.
INVESTOR SENTIMENT: Elvis has left the building.
HOUSING CRISIS: Best described with a vulgar, four-letter word that strikes horror into the hearts of home sellers nationwide: R-E-N-T.
INFLATION: Some of the cheapest labor rates just got a little less cheap as Vietnam’s inflation rate lurches up over 20%.
BOND VIGILANTES: “We’re baaaaack.” And spending a gloriously torrid summer in Europe.
ARAB SPRING: Civil wars are never civil especially when one side has most of the weapons and the other side has most of the passion. Are you catching my drift Syria?
LIBYA: Still miserable. Still nowhere.
JAPAN: About to jump into the already crowded currency debasing pool.
CHINA: Extending their reach a bit as a fleet of Sino sloops tack their way into the South China Sea. Let’s hope live ammo military exercises aren’t part of this regatta.
U.S. CONSUMER SPENDING: Nothing like a quasi-buyers strike coming into the back-to-school season. “Hey, Ma! Does that mean we don’t have to go back to school this year?”
SOVEREIGN DEBT: Now entering the fray it’s...”Cyprus”. Sitting coyly off the coast in the Mediterranean at 35°00 N latitude and 33°00 E longitude, everyday is a sunny day even those when you’re crying out to the ECB for a bailout.
POLICY MISTAKE: Global political leaders are like kids in a candy store: “So many potential screw-ups to choose from! Can I pick more than one? Please, please, please!”
EUROPEAN CENTRAL BANK: This may be the August of their discontent.
GREECE: Got a $109 billion handshake from The Euro Dad Countries to keep it going for a while. Yeah, that’s gonna last until someone thinks to shout, “Toga Party!”
U.S. DEBT RATING: To downgrade or not to downgrade, that is the question…”whether 'tis nobler in the mind to suffer the slings and arrows of outrageous fortune, or to take arms against a sea of troubles, and by opposing end them? To die: to sleep; No more; and by a sleep to say we end the heart-ache and the thousand natural shocks!” My fancy way of saying they should be cut.
ITALY & SPAIN: Financing back up over 6%. Fear back up over 100%.
ECONOMIC LEADERSHIP: M.I.A.
BIPARTISAN DEBT-REDUCTION COMMITTEE: New deficit cutting deadline du jour takes us to November 24, 2011, a.k.a. Thanksgiving Day. And a Turkey it will be.
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.
Click on the image below to view the graphic Wall of Worry page.
No positions in stocks mentioned.
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