Look out below, Asia edition
Posted by Charles II on February 21, 2013
Don’t know what this means. CNBC:
A massive sell-off in Asian stock markets on Thursday erased the previous day’s strong gains after Wall Street fell on minutes from the Federal Reserve’s latest meeting, which sparked concern about the central bank’s bond-buying program.
The drop in commodities like silver’s SLV (down to 27 from its high of 34 last September) and copper’s CU (at 28 and change from its high of 46 in mid-2011) suggests that there’s real economic weakness. On the other hand, the real drop is in Shanghai (3%) while Korea is just 0.5%. US futures are down marginally. So I sort of suspect this is more of a China story at the moment.
Just to add (2/21): my guess is that this will be a 14-20% correction, which would be around 1200-1290 on the SPY and it will be driven primarily by congressional stupidity, Fed paralysis, and Chinese opacity. Possibly the Europeans have exhausted their supply of stupidity, although if they don’t do something to reduce the likelihood of revolution in Greece, they haven’t.
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