Friday, February 5, 2016

HOTEL CALIFORNIA ? Which straw will break this Camel's back?


DO you have to pick one?  Pretty much it could be anyone.   They take your stock out behind the barn and shoot in the head.  Game over.  OK so its only wounded, say 20% in a day.   Did it put you under water?



Where do we start ? Glencore is one tiny alphabet letter away from going to the lowest form of investment grade rating to JUNK. One letter. Hmmm. Not to dwell on that but is that the only piece of BAD news out there ?
We know with so many Black Swans about, one of them is carrying in its bill, a straw to break this camel's back. Ukraine ? Syria ? Moldovia ? Yes, Moldovia ! Yes, Syria, oh yea. Turkey ? Kurdistan. The Saud's want to send troops to Syria, to fight whom.
Anyway you get the idea, all the Monetary Authorities, and thus us, are in
HOTEL CALIFORNIA. We can check out, but we can never leave.
Either we NIRP or QE endlessly until the markets roll over and bring the masses out chasing them with pitchforks and torches. Or they STOP EVERYTHING !
OH, Guess what ? The music stops, and there are not enuf chairs. Now being good sports, the participants realize they are DONE !, and start breaking the chairs over one and others heads till the riot squad hauls them away in handcuffs. Of course when Joe and Mary 6PAK cant get cigs or beer, there is a fair probability they may storm the lockup, to get at the people they want to lynch. Well, no problem, right?
PROBLEM.
Did the markets remain liquid or did things go without bids and huge gaps open up ? Did you hear the term “Liquidity Fractures” ? Don't matter, that is what I came up with October 2 years ago when the Treas 10 Yr went without bid, and scared the feathers out of the secondary and primary govt security dealers. US Govt Securities WITHOUT A BID ? ? ?
Flash forward to last month, when the London Silver Fix, undercut the Spot price by 84 cents and did the same thing another day. Without recounting them all, this is how the system is showing you its coming apart, because things are stopping working the way they were designed. Continious pricing full time auction markets, i.e. NYSE, will be not continious. You may have to fish for bids. Do you have say GM, or JPM, or other institutionally driven stocks, you may not notice. Having anyting less liquid subjects you to the danger of hunting for bids when you want to sell and maybe not finding them till 10-50% lower when the market are coming apart. Ugly prospect. Maybe the markets well be broken or closed when you want to sell, and everyone may want to be liquidating with or without bids, with serious consequences to your capital health.




Looking at some stocks that exprienced that TODAY we see – air gaps -
GRA-19% 1 day loss; PPP -28% 1 day CS – 13% 1 day loss.
What happens the next trading week is anyone's guess.


Looking at some stocks that exprienced that TODAY we see – air gaps -

GRA-19% 1 day loss; PPP -28% 1 day; CS – 13% 1 day; RL – 22% 1 day loss.
What happens the next trading week is anyone's guess.
It is the kind of thing that ends friendships, when you ask your broker
Why didn't you tell me ?” with a lot of anger cause you just lost a big chunk.

Bottom LINE, SIGN up for the ALERT LIST  in Feburary and you will get the newest copy of The RECAP Report, covering the latest from PEAK PICKS, with a specific Action Plan for your Capital Preservation.  Get ahead of the Curve !!

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