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Saturday, July 21, 2012

Is Chinese GDP the new Libor?

market 1
market 1 (Photo credit: tim caynes)
“I remember when all you had to do was figure out the correct p-e for an industrial. Now you need to be a German Oliver Wendell Holmes
Jim Cramer
1st Half 2012 Review and 2nd Half Outlook
Risk on? Risk off? Where is the market going??
I must say I have not felt this convictionless about the market’s short to medium term direction in a long time. In speaking to clients, I don’t know if it’s the holiday hangover from the 4th or the noticeable, swift drop in the market’s correlation, which has people scratching their heads.
Is Chinese GDP the new Libor?
Picture in your mind two giant oceans meeting one another, imagine the rip and chop. Ultimately, I think the market is trying to digest colossal growth dislocations globally; the US, Europe and China. The data is changing at a very fast clip.
With almost as much influence, since the EU Summit we’ve seen a dramatic decline in tail risk. My 17 Lehman systemic risk indicators have sharply moved lower, best improvement since January. While at the same time we’ve seen a spike in traditional economic risk to the markets.
Investors as a whole are obviously confused, the Weekly Advisor Sentiment, better known as Investors’ Intelligence, Bulls fell to 43.6% from 44.7% last week, while Bears remain unchanged for the 3rd straight week at 24.5%. ... Continue to read.
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