The title of this post is from Roubini's seminar today...Like Roubini says, markets are getting way ahead of themselves. There may be a lot of reasons to this but the one I have constantly been observing is the recent forged economic reports released at key market levels triggering short squeezes on quant funds.
I was in a meeting with Peter Schiff at NYU last Thursday. Unlike what you may guess, we talked more about current economic policies and administrative mistakes that will lead to the destruction of this country's assets, its currency, socioeconomic structure and eventually the whole system while creating next financial bubbles in emerging markets, especially in Asia.
It is sad to see that too many smart people who foresaw this mess long ago now predict similar future for the country if the current policies are maintained... because when the ship sinks deep enough, I am afraid the policy makers themselves will be the first to leave the ship without saying goodbye. I will keep this one short because it is the close of Friday May 8 that will be very telling.
Regarding the market action, I expect ESM9 to close below 885 this week to maintain a bearish intermediate term meaning for 850-870 range. It is currently trading about 30 points higher than this area. We will see what will happen by the end of the week.
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