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Senior Advisor

Domino watch

EU banking system was already deeply distressed and is likely to tip over here. It is intertwined with the US and other global banks via derivatives, swaps etc.

Might want to be including those un-elected bureaucrats in Brussels in your prayers- for a strong and effective intervention that limits contagion.

Also for US officials- not time to play the poke 'em in the eye game.

6 Replies
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Senior Advisor

Re: Domino watch

What a mess.

Index futures touched limit down following the Presidential address- meaning nobody knows where it will open at 9:30.

Plunge Protection Team needs to step in here to make sure this doesn't become a catastrophic, self reinforcing rout.

As in 2008-9, PPT won't stop the market from ultimately finding its destination but it buys some time.

https://www.investopedia.com/terms/p/plunge-protection-team.asp

0 Kudos
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Senior Advisor

Re: Domino watch

Well, that was a quick trip of the circuit breaker.

Hope there aren't any pennies in the fuse box.

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Senior Advisor

Re: Domino watch

Anybody do the calculation of the numbers on the second circuit breaker?

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Senior Advisor

Re: Domino watch

Something to keep in mind is that in addition to share buybacks and such corporate America has been making very heavy use of accounting tricks in order to produce earnings and keep up with peers, etc.

Shareholder value, you know. Mostly value for management and boards to cash their incentives, but anyway.

So like in '09, when the opportunity comes to come clean, everybody will throw everything in but the kitchen sink because once again, whocouldathunkit?

You're going to see a few quarters with some very, very bad earnings.

The record number of retirements of SP500 CEO's sorta suggested this was coming, regardless of the direction that it came from.

A fish rots from the head.

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Senior Advisor

Re: Domino watch

Imagine,  those  corporate  executive  officers ,  exiting  their  chairs, in  the  last  2  weeks   - coincidental , of  course - - -   

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Senior Advisor

Re: Domino watch

Good 'ol IA farm boy got $60M in golden parachute before getting pushed out the door of America's former greatest manufacturer (Boeing).

Nobody was complaining when the stock was record high while he was burning through cash and loading up debt with $43 B in share buybacks.