With many people wondering what’s next for the markets, today a famed short seller warned that countries may no longer be able to bail out their banks.
By Bill Fleckenstein President Of Fleckenstein Capital
March 24 (King World News) –Overnight markets were all 1% to 1.5% lower, and the SPOOs declined in sympathy, although once trading began in New York they rallied off those lows such that by midday the market was just modestly weaker, led by the S&P, which lost about 0.4% as it was led lower by the financials, which were once again quite weak, especially European banks.
Imbalance Sheets Is More Like It
For those who don’t know, many of those institutions — e.g., Credit Suisse, Deutsche Bank, or UBS — have balance sheets that are so big it would be difficult for their home countries to bail them out. However, that weakness had little bearing on the Nasdaq, which just barely declined.
In the afternoon, the indices managed to trade back to essentially unchanged. Away from stocks, green paper was slightly stronger, fixed income was slightly weaker, oil was flat, and the metals saw small losses.
Included below are two questions and answers from the Q&A’s with Bill Fleckenstein.
Bonus Q&A
Question: Hi Bill, is the Fed reserve being saved by the strong dollar? i.e. Maybe the emperor has at least a loincloth.
Answer from Fleck: “No. The dollar rose on the fantasy story that the Fed had delivered a self-sustaining recovery and would be hiking rates fairly aggressively. It has since slid as that fantasy slowly fades away.”
Question: Any observations re the PM smackdowns (Wednesday)? Pretty dramatic. Looks to me like the banks/Fed have not lost control of anything and are back to the same old crap. Stocks are back up, too. It’s getting very old, now five years running. How can investors believe anything the Fed says, and yet they still do!!!!????
Answer from Fleck: “SOS? Have you looked at the price appreciation of miners in 2016?”
To hear about the coming massive financial destruction from the man who advises the largest global sovereign wealth funds, hedge funds, investment banks, and institutional money managers in the world, Michael Belkin, you can listen his amazing audio interview by CLICKING HERE OR ON THE IMAGE BELOW.
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