The Most Worrisome Charts
Business Insider has compiled a solid list of worrisome charts from many good Wall Street thinkers. I happened to be included although they titled the post “Wall Street’s Brightest Minds Reveal The Charts That Worry Them Most” so I am not sure why I was invited to contribute.
Anyhow, I found the commentary kind of interesting and probably a sign of the times. BI’s Matthew Boesler says a number of people turned down the offer because they just couldn’t find anything to be bearish about. That explains not only why I was invited to contribute (they were desperate for contributors), but also shows just how wildly bullish the street is right now:
“With optimism resurfacing over the global economy and the perception that major tail risks in the United States, the euro zone, and China have been mostly squared away, what’s left to worry about?
We posed the question to our favorite analysts, economists, and traders across Wall Street – and we were surprised at the number of people who declined to give an answer, telling us that they just couldn’t really think of anything too worrying right now.”
My chart? I still think Europe poses the biggest threat to the global economy. I provided a brief explanation:
(Via Orcam Financial Group)
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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4 Comments
Well as we often day the economy and the market are not the same thing.It don’t take two to make an opinion on the economy.you want to buy and sell something that’s something different.Which is why it really matters on who and how many have already bought into a market. If that position is in sentiment terms very optimistic already chance is you’ll struggle to find buyers at higher prices so you are already exposed to any so called unforseen shock. Which of course brings us to unforseen shocks and reasons to be bearish. The more bearish people are the more likely they have already prepared for unforseen shocks so you’re not really going to get unbalanced buying and selling spreads. It is indeed the very fact that people surmise they can’t see the risks that opens them up to unexpected. LOL…by implication the negative market moving risks are hardly ever expected. If they were they wouldn’t actually happen the way they do.
Beppe Grillo, the former comedian who holds the balance of power in Italy, has suggested the country may have to abandon the euro and return to the lire.
http://www.telegraph.co.uk/news/worldnews/europe/italy/9904270/Beppe-Grillo-says-Italy-may-soon-have-to-pull-out-of-euro.html
That fact that “Beppe Grillo” is a “former comedian who holds the balance of power in Italy” is worrisome enough!
Cullen, you are too modest! I’m very happy, every time you get a bit more exposure.
Cullen, thanks for this post. I agree that Europe seems to be the biggest risk out there with Italian and Spanish bond yields two of the key indicators. But there is another big risk area that is affecting today’s market. That is the risk of an imploding property bubble in China. China’s growth model has been overly dependent on an extremely high level of fixed asset investment which is unsustainable. That could prove to be as much of a risk to US equities markets as Europe is.