Thursday, June 21, 2012

Uh, Oh, Here We Go Again? German Economy Cracking

Just a day after the Federal Reserve's announcement of an extension of operation twist, reports from Europe, especially one showing a drastic slowdown in German manufacturing (Flash PMI), at its lowest level in three years, sent first, European stocks lower, and then, US stocks to even steeper losses by percentages.

Apparently, European investors had already sensed the slowdown, because the losses were not that severe as in the US. However, many of the European nations are already in or on the verge of recession, and their stock indices already in bear market territory.

For US investors, the Dow took its second-worst one-day plunge of the year, as did the NASDAQ and &P 500, exacerbated by a sharp decline in the Philadelhia Fed Index. The June reading came in at -16.2, on expectations of -0.2 (not sure just who was expecting the somewhat rosy, small negative number).

Oil also took another dip, recording the worst two-day decline in nine months.

The key numbers for stocks and commodities are below. There's little more to say except that this one-day event is just another in a long, continuous stream of deflationary, depressing economic data sets that seemingly has no end in sight.

The collapse of the global economy is like watching a slow-moving hurricane heading for a vulnerable coastal city, a la Katrina wiping out New Orleans a number of years ago. Nobody wants to believe it is going to be horrifying and devastating, but it continues apace and the closer it gets, the more people begin running for cover... or their lives.

There is almost no doubt that the world is heading for a major economic event, one which will not only devastate some of the more notorious crooks on the planet, i.e., bankers, but will also change the players and nature of national and global politics.

Just in time for a presidential election. The timing is just so delicious and sickening.

Read 'em and... don't weep. There's no crying in high finance.

Dow 12,573.57, -250.82 (1.96%)
NASDAQ 2,859.09, -71.36 (2.44%)
S&P 500 1,325.51, -30.18 (2.23%)
NYSE Composite 7,562.51, -195.40 (2.52%)
NASDAQ Volume 1,697,187,750
NYSE Volume 3,915,656,000
Combined NYSE & NASDAQ Advance - Decline: 1105-4507
Combined NYSE & NASDAQ New highs - New lows: 104-83
WTI crude oil: 78.20, -3.25
Gold: 1,565.50, -50.40
Silver: 26.84, -1.55

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