Mish's Global Economic Trend Analysis

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Saxo Bank CIO Jakobsen Predicts Another "Shock Drop" in Markets; Addicted to Cheap Money Posted: 22 Oct 2014 09:52 AM PDT Inquiring minds are tuned into the Saxo Bank's 4th Trading Debate on Volatility and Performance. Another "Shock Drop" in Markets Saxo Bank CIO Steen Jakobsen says Another 'Shock Drop' is Coming and it's Coming Soon Steen takes the view that central bank policy is creating a 'fantasy land' for investors and he points out that the recent 'day dive' in markets was a closer reflection of reality. Steen outlines his suggestions for trading ahead of another dip in mid November with targets for the S&P 500 around 1810 and the Dax at 8000 - 7800. China Replicates West's Mistakes Says Trading Panel Martin O'Rourke, Managing Editor of Saxo's TradingFloor.Com says China 'Replicates' West's Mistakes "China's lesson from the Asia crisis of the 1990s was never to be beholden to the West for debt," Director at Fathom Consulting Danny Gabay said. "Our concern is China will mismanage what increasingly looks like a hard landing." "China has effectively managed to replicate the mistakes of the West since the global financial crisis," said Gabay. "The Chinese will ultimately be defaulted upon." Addicted to Cheap Money Societe Generale macro strategist Kit Juckes also warned of some tough times ahead. "We're getting deeper into a mess. We're addicted to cheap money and the addiction is getting stronger." Martin Wolf Bearish on Markets and China In another Trading Debate panel Martin Wolf Says He's Bearish on Markets. Martin Wolf, chief economics commentator at the Financial Times and one of the main speakers at Saxo Bank's #TradingDebates event in London today. "The world is never out of the woods and people will always get lost in them," he said. "The Chinese growth model is collapsing and they know it," says Wolf. "China will disappoint on the downside and we will see the negative impact of that on commodities," he added. As to how this will affect trading and traders the world over, Wolf is equally blunt: "I would expect more turbulence," he said. "All the problems that existed before the crisis are still with us, with the addition of the problems created by the crisis," he warned. Major Bear Market Coming  My view is that 1810 on the S&P would be only the beginning of the bear market that is to come. 1500 or even 1200 on the S&P would not shock me. Once sentiment reverses for good (and it will), I highly doubt that even more cheap money will help the markets. But I offer no timeframe. In contrast, Steen made a call with a timeframe and a short-term one at that. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

US Airdrops Load of Weapons Into Hands of ISIS Posted: 22 Oct 2014 09:17 AM PDT In yet another embarrassing moment for the Obama administration, Isis Claims it has US Airdrop of Weapons. A US airdrop of arms to besieged Kurds in Kobani appears to have missed its target and ended up in the hands of Islamic State (Isis) militants. Video footage released by Isis shows what appears to be one of its fighters for in desert scrubland with a stack of boxes attached to a parachute. The boxes are opened to show an array of weapons, some rusty, some new. A canister is broken out to reveal a hand grenade. The Pentagon said it was investigating the claim but admitted that one of its airdrops had gone missing. The Pentagon spokesman, Rear Admiral John Kirby, told reporters that analysts at Centcom headquarters in Tampa, Florida, were examining the video. "We're still taking a look at it and assessing the validity of it," he said. "So I honestly don't know if that was one of the one dropped." "I do want to add, though, that we are very confident that the vast majority of the bundles did end up in the right hands. In fact, we're only aware of one bundle that did not." The airdrops were carried out by three C-130 planes. The video shows a man in camouflage clothes and balaclava looking through the boxes of munitions. He says they were dropped by US forces and had been intended for the Kurds. He described them as the spoils of war. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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