Well the market is a bit calm as of this writing.. really no movement either up or down..
Calm like spiders nestled in their webs awaiting the dimwitted flies with 'flies' being of course the everyday trader...
Without them to invest their last penny, there'd hardly be any fresh blood to suck and you can't have a growing shark tank i.e. market without some guppies..
Anyways, question of the day-- why is the market calm?
We wonder what others are expecting to hear?
Our insider little birdies have whispered sweetly in our ears to expect something around 6.7% which may sound terrific, especially compared to the barely 2% quarterly growth the US is producing...
But if those little birdies are correct, 6.7% for China is abysmal and would represent a major slowdown in their economy (China in the past had declared double-digit quarterly growth)
** "Black Swan": A metaphor that describes an event that is a surprise (to the observer), has a major effect, and after the fact is often inappropriately rationalized with the benefit of hindsight.
One can hope, right?
But we're skeptical.. been down this road too many times..
They've also been inflating their economic bubble over the last 10 years in ways Bernanke can only wet-dream about, and its popping.. Of course in a closed government like China, getting any honest information on the difficult state of their economy is like the tired expression of one pulling teeth...
But we do know its bad..
We saw one news report on a global news network yesterday alone that due to lack of jobs, poor wages and growing prices of homes and rentals, it is quite common to see upwards of 20 people in China share one tenement.
So here's the two options for Sunday when the GDP report is released:
1) China either gives a credible number (something under 7% growth) and the market tanks for anything industrial commodity related..
2) They make up such a patently false number, and lose all credibility, leading to suspicions that things are so bad that they have to blatantly fix the numbers which don`t even remotely match the economic data.
Throw in some bad earning`s reports, and things could get real nasty...
As one of the little birdies was emphatically explaining while perched on our collective shoulders here at A&G, it does not matter a fig whether the Fed buys $65 or $85 billion a month in Treasuries.
So we shall see...
As we've stated previously and often before, we've been disappointed before..
The bearded bastard at the Fed always finds a way to intervene directly into the market like some supernatural force with the power to alter the laws of gravity...
A lot of it depends on how many Big Boys and Professional Investors expect a slow down and low GDP and if they rationalize low enough that 6.7% is 'good', well.. you know how that G-D game works by now...
And if nothing happens, please don't blame us..
Blame those pesky little birdies