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Investors Worry About Non-Farm Payroll Friday, LIBOR-Gate, and... ?

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While you're getting some rest for the holiday, you can ponder potential future worries like Stockton, CA, declaring bankruptcy and the potential devaluation of the euro.

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MINYANVILLE ORIGINAL "Hello fresh air, goodbye city life." Maybe life and work on a farm wouldn't be so bad?

This could be real food for thought after this Friday's payroll number lights up at 8:30 a.m. But are the markets worried? Not according to last week's market action as the Dow (^DJI), S&P 500 (SPY), DAX (^GDAXI), oil and even gold (GLD) all stared into the abyss on Thursday morning only to pull a phoenix-from-the-ashes rally into the weekend. Get the feeling that the euro leaders look at investors and think, "Pishah, you market people take everything so seriously."? Ah, that would be "Yes, we do."

While you're getting some rest (read: "I'll have another…") during this week's merciful mid-week July 4th holiday, you can ponder potential future worries like Stockton, CA, declaring bankruptcy and the potential impact of a $350 trillion dollar asteroid called "LIBOR Scandal" hitting the markets – this may be the big one, folks.

For now, it's time to relax and enjoy a new game from my buddy "Trader Rick." The rule: Every time a politician, media pundit, or economist says, "Kick the can down the road" you have to take a drink. Likely we'll all be so bleary-eyed by Friday that we won't be able to read the payroll number anyway. Cheers!

This week's Wall of Worry moves down a notch to 28 blocks with earning seasons joining the list of concerns. Scroll down for a text-only version of this column and an explanation of how it works, or click on the graphic below for an interactive version of the Wall.





Lloyd's Wall of Worry

QE:
We're gonna get it, but with a hitch. First we have to experience market hell, global economic breakdown, and near-systemic social collapse. Oh yeah, we're gonna get it.

US ECONOMY: Outside the car dealership dubbed "Tri-State Area" (NY, NJ, CT), things aren't so bad. Guess where I live, sigh...

UNEMPLOYMENT: Good news in the US as manufacturing jobs are coming back to the heartland. Opposite of good news for the rest of the world as they bid these shifts goodbye.

INVESTOR SENTIMENT: Aah, nothing a good night's sleep won't fix.

HOUSING CRISIS: Signs of life emerging in the US --- Frankensteinian, bolt-necked, and stiffed-legged as it may be.

CENTRAL BANKS: Spoiler alert! They are freaked.

EUROPEAN ECONOMY: Clearly taking off July this year in addition to its regularly scheduled August slack-fest.

THE EUROPEAN UNION: Surprise! No explosion. Starting to look more like an implosion. Isn't this how thermonuclear reactions work, too?

SOVEREIGN DEBT: Channeling F.D.R.: "Never before have we had so little time in which to do so much." Striking how much one Depression looks like another.

SPAIN: "For $125 billion today, I will gladly pay you back on miércoles."

10-YEAR TREASURY YIELDS: Still the most popular kid in the class for the third year in a row.

EGYPT: New ruling party? As if we weren't confused enough about this country already.

VOLATILITY: "Ladies and gentlemen, please brace for impact."

HIGH FREQUENCY TRADING:
Lloyd: How much do you make off of trading and how much off of "maker-taker" market rebates?
HAL: Who's asking?
Lloyd: The guy about to kick your power cord out of the wall.
HAL: Let's start with the basic tenet that profits are fungible...
HAL: Now you tell me.

CHINA: Bad economic news as exports are down. Of course, that doesn't include former party big wigs heading overseas and out of Dodge that is.

STOCK MARKET TECHNICALS: As they say, "In a trading range." Or as they say in the vernacular, "In a trading range from hell."

GERMANY: Almost had them tapped out, Angela, but EU's Mario's went tag team on you and for the time being. "You met your match, you met your match…."

GLOBAL ECONOMY: "Iceberg dead ahead!"

INDIA: The rupee is dropping faster than those ski jumpers coming off that long runway jump, like the one at the beginning of "The Wide World of Sports" in the 1970s. "Spanning the globe..."

TOO BIG TO FAIL BANKS (TBTF): Just when it looked like the air was clearing a bit, the biggest, baddest and boldest cloud rolls in – "LIBOR-Gate" --- and however pathetic and overused the "-gate" suffix is, in this case I said it first!

US PRESIDENTIAL ELECTION: ...and time! The US citizenry is officially turned-off, disinterested, disengaged from the election. This has got to be a record.

CREDIT MARKETS: "And the thunder rolls…"

GREECE: Waiting for the bouncer to show them the door out of the Euro Bar.

PMIs: Most of the globe now registering in the 40s. And as someone in his 40s, it's not the best place to be.

EURO CURRENCY: If "Less is More," then devaluation of the euro may be much more.

ECB: Cosmetic or not, the markets wouldn't mind another 25 bps cut. And how about some Botox for the euro economies while you're at it?

EARNINGS SEASON: It's Europe's fault!



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.




SPY, GLD
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