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EmailSunday, November 1, 2009
Executive Summary
- A break in past relationships between the stock market, the dollar, and gold, along with a breakout in the VIX, could be signaling the beginning of an important turning point
- Capmark declares bankruptcy (CIT is next).
- A commercial real estate emergency is upon us.
- Is gold signaling a continuation of the financial crisis, or something more?
As you know, I spend a great deal of time combing the available market information for clues about what is happening in the economy and where it may be leading us. This past week (October 24 - October 31, 2009) showed some amazing developments indicating that a major turning point is once again upon us.
This assessment is based on several key events, including the bankruptcy of Capmark Financial, which kicked off the week, the return of volatility to the stock market (reminiscent of past tops), and the bizarre strength in the price of gold on Friday, even as the Dow peeled off nearly 250 points.
Let's take a look at these events one at a time...
Your faithful information scout,
Chris Martenson
Copyright 2009, Chris Martenson. All rights reserved.
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Comments
Great read: I caught the gold/DXD change and wondered if it was an anomaly OR a shift. I also saw a change in the banks books on CRE that is, by definition a total farce.
Be interesting to see how much longer things hold up. Take care
Thanks Chris, a timely and excellent update. I wonder if I would be way off line suggesting that other countries might be getting paid quite well to look the other way with regard to our creditworthiness.
By the way, your writeup here has quite a string going on over on LATOC.
Thank you Chris. I have been wondering about Citibank since they recently closed my business account without even calling me because I kept the running balance low. They just transferred my monies to my personal account and shut it down. I did not do anything wrong...
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Very helpful. I have wondered about the gyrations in the precious metals markets for weeks now.
But, mainstream news has been oddly uninformative lately. Does anyone else hunger for something more useful than "turmoil in the middle east" , celebrity profile and wall street comeback headlines? I used to work for NPR , one of the better news organizations, and even they seem clueless...
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Chris -
This was a crazy week in the markets. Great read, but unless I am not catching your point, I think this sentance is backwards?
"When the VIX is very low, there's a good chance of a market selloff, and when the VIX is high, there's a good chance for a market rally"
The VIX spiked 18% or so on Friday...
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I've understood that high volatility is a sign of a change in direction of the markets. Since the S&P and DOW have been going up since March, isn't it reasonable to expect a drop in those markets given the VIX, and, given what may be a decoupling with gold, possibly rising gold prices? Am I missing something?
Doug
memorrison wrote:
Chris -
This was a crazy week in the markets. Great read, but unless I am not catching your point, I think this sentance is backwards?
"When the VIX is very low, there's a good chance of a market selloff, and when the VIX is high, there's a good chance for a market rally"
The VIX spiked 18% or so on Friday...
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The VIX analysis confused me as well.
On Capmark: It seems me that the way to see ahead on these things is to figure out what the government would to do to best benefit GS. So, as you point out, GS is a partial owner of Capmark, then maybe another bailout is in the works...
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I believe Chris made the point that the spike in the VIX was what signalled the change in trend. It is a sign of transition in the markets. I really appreciate this post by Chris because I had largely ignored the Capmark bankruptcy and if that has a large tie to the deriviatives market it may be time to buckle up...
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