I was listening on radio in the car that Tokyo Nikkei opened down 4%. No surprise after what had happened overnight in the US. I turned on my Desktop and I am seeing a 3.3% in the red. Even gold is being sold off. Everyone is running to cash, a clear sign of fear.
No surprise, only as usual cannot tell when something like this happen. Like more than a few, I have reminded myself it is time for cash in, "Be wisely stupid, keep cash"
I don't believe we are seeing the beginning of the end of the world, so there will be bargains to pick up later. Meanwhile presidential candidate is trying to frighten us into voting for him. A perfect storm story is believable but by no means a foregone conclusion. Have you seen Benoit Mandelbrot earlier response? He wasn't as pessimistic as Nassim Taleb back during the first leg down in 2009. Taleb considers Mandelbrot his mentor and rightly so.
What we can be sure of is that the good times are over for a while. We can also be sure of volatility and much skittishness; leaders lacking courage and adding to policy unpredictability.
Vicious cycles are here for a while. The faster they are the quicker this thing resolves itself but leaders' instinct is to slow it down because people can't bear it. Lacking courage, they will of course kick the can down the road. Europe is becoming iconic for that.
Be bullish when there is widespread fear.
ReplyDeleteBe greedy when you see blood on the financial streets.