Bill Blain: “I’ve Got October 12th As The Day The Big Equity Crash Occurs”
Submitted by Bill Blain of Mint Partners
The big risk? The ECB taper… what follows?
“It will not always be summer; build barns.”
Today’s sermon is about complacency.
Yesterday, I read in a Fixed Income analyst comment something about the: “robust macro backdrop ahead of the ECB meeting on Sept 7th creating a solid base for risk assets and prompting a steady flow of borrowers to get funding programmes underway..” Sure enough, there is a feeding frenzy developing in the new issue bond market…
Meanwhile, my stock picking chartist Steve Previs warns the gauges he follows, like put/call ratios and VIX, reflect an “overly confident” market. He thinks a top is coming.
Personally, I’ve still got October 12th at 10.30 in the morning tagged as the moment the big equity crash occurs and I get out my buying boots ready for the opportunities that will follow. (Why Oct 12th? Why not..? The date has a nice ring about it as day of manic market mayhem – and the following day is a Friday the 13th… meaning it will panic folk even more!” Mwwwhahahaha..! )
n the fixed income markets I think we’re glossing over the likely pain to come courtesy of the ECB.
What happens post the next ECB meeting, (or more likely the ECB meeting after that, or the one after that, based on the ECB’s predilection for kicking the can down the road)? Forget inflation and growth nonsense.. at some stage the ECB has no choice but to ‘fess up how it’s actually been mutualising European debt, and cut its buying programme. We’re all talking about European normalisation, wondering when, but when it actually happens, please explain exactly how that “solid base for risk assets” works.
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