Black Monday

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There is going to be a stampede for the exits today and not everyone is going to get out before the fire and smoke overcome them.

We could see close to 10% down ....baby boomers can only stand so much pain watching there retirement savings vanish in front of them. Many a mutual fund manager will be getting a phone call today ....
 
Quote from Trendytrader:

There is going to be a stampede for the exits today and not everyone is going to get out before the fire and smoke overcome them.

We could see close to 10% down ....baby boomers can only stand so much pain watching there retirement savings vanish in front of them. Many a mutual fund manager will be getting a phone call today ....
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baby boomers should have large part of savings in bonds as of this year - so this equity sell off is not a big deal for them. Few longs but they likely got out already. We could sell a bit more to bring more value for 2Q but I doubt that we talk more than 3-5% from here. Let's wait ;)
My guess is that the pain is more felt in vol - especially hedge funds were selling like crazy when VIX was 10%...
 
Quote from dhpar:

baby boomers should have large part of savings in bonds as of this year - so this equity sell off is not a big deal for them. Few longs but they likely got out already. We could sell a bit more to bring more value for 2Q but I doubt that we talk more than 3-5% from here. Let's wait ;)
My guess is that the pain is more felt in vol - especially hedge funds were selling like crazy when VIX was 10%...
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Disagree. Boomers are more invested in equities than they should be. A significant drop in today's action may prompt fund liquidation over the next few days. Quite serious.
 
Yea, that was discussed a lot this weekend on ET TrendyTrader.
This might all be institutions unwinding trades - but the psychology of the selloffs hasn't even begun to be felt by the retail sector. Babyboomers could panic and go to cash.
 
Quote from Aaron:

I'm more surprised by the Treasury rally than the equity swoon. Short treasuries I can understand, but long treasuries? At 4.5% with inflation just shy of 3% and the dollar in a down trend?? Two years are so much the better investment.

I agree, short bonds offers better odds.

Quote from duard:
BRIC money repatriating the U.S. perhaps?
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From the NYT this am.

But decisions by investors last week to dump risky assets like stocks in China or Brazil and instead buy safer bets like United States Treasury bonds actually makes it easier to finance America’s shortfall.

There you have it.

BRIC sold treasuries bought.

Carrytrade unwinding.

Asian contagion.

Now a new equilibrium in the making. We'll see where we end up.

Good luck to All.
 
This excatly why shorting the EMs in a situation like this is more profitable than shorting US indicies. This is all about risk aversion and the money is going to come out of the EM and come back to the US. Everyone is looking for 10-15% correction in the US but 30-40% in EMs.
 
Quote from Mvic:

This excatly why shorting the EMs in a situation like this is more profitable than shorting US indicies. This is all about risk aversion and the money is going to come out of the EM and come back to the US. Everyone is looking for 10-15% correction in the US but 30-40% in EMs.
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Good Point. I think that the writing is on the wall for the emerging markets. Bloomie's and Reuter's had several articles on China and how the Gov't is changing their fiscal policies to avoid a melt-up meltdown crisis. Repo and fractional reserve rates were altered significantly.
 
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