3 reasons why this feels like a Market Crash!!!

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3 reasons why this feels like a Market Crash

  1. There is a serious liquidity concern. The episode at Third Avenue http://www.wsj.com/articles/sec-examining-high-yield-fund-holdings-after-third-avenue-tumult-1452725970  is literally unprecedented as investors could not liquidate their mutual fund holdings. Liquidity issues have always been at the forefront of market meltdowns.
  2. A commodity meltdown has occurred. Developing Economies now have to struggle with a severely diminished asset base as well as a strengthening dollar. This will kill their ability to export. They will also have to pay dollar based loans with more expensive local currencies…ouch!!!
  3. Interest Rate Easing is over. The Central Banks are out of room and the average retiree has been overreaching for yield. Once the selloff started panic set in, a fixed income with a declining portfolio value coupled with longer life spans can be a scary thought for most people.
Stay Tuned!!!

Finally remember it is only money:

Matthew 6:21

21 For where your treasure is, there your heart will be also.

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