From my vantage point, the risk of a serious financial disruption has increased exponentially in recent trading days. There are numerous undercurrents within this market that feel eerily similar to trading environments that preceded prior financial dislocations that I have witnessed in years and decades past and survived to tell about. I am sensing that the U.S. Fed is even concerned about making its next move lest it is found to be sterile and impotent. If and when we reach that point in time when the reversal of years and years of speculative credits overwhelm the Fed's ability to maintain a modicum of financial stability, it will be tantamount to the exposing of Oz. That day is nigh.
Speaking of Oz, financial engineering firm, the Blackstone Group (BX) reported its first quarterly report since going public in June. The company said it lost $113.2 million or 44-cents per share in the third-quarter and blamed charges related to its IPO for the shortfall. The magnitude of the loss was a surprise given that the firm is literally in the business of financial engineering and can essentially decide when to realize its losses when it feels fit. The other unveiling of Oz's curtain in recent trading days has been the serious beat-down being put on Jim Cramer's fabled "Four Horsemen". In five days (three trading days) Google (GOOG) has surrendered $115/share, Apple (AAPL) nearly $40/share, Research In Motion (RIMM) $35/share and Amazon (AMZN) has dropped 24-percent since reporting earnings on October 23rd. Additionally, China-related stocks along with a whole host of other quant favorites have been seriously wounded. For future reference, don't delude yourself into believing that the riskiest most overvalued group of stocks on the planet are a safe-haven from the unwinding of an unprecedented, massive credit bubble.
Speaking of Oz, financial engineering firm, the Blackstone Group (BX) reported its first quarterly report since going public in June. The company said it lost $113.2 million or 44-cents per share in the third-quarter and blamed charges related to its IPO for the shortfall. The magnitude of the loss was a surprise given that the firm is literally in the business of financial engineering and can essentially decide when to realize its losses when it feels fit. The other unveiling of Oz's curtain in recent trading days has been the serious beat-down being put on Jim Cramer's fabled "Four Horsemen". In five days (three trading days) Google (GOOG) has surrendered $115/share, Apple (AAPL) nearly $40/share, Research In Motion (RIMM) $35/share and Amazon (AMZN) has dropped 24-percent since reporting earnings on October 23rd. Additionally, China-related stocks along with a whole host of other quant favorites have been seriously wounded. For future reference, don't delude yourself into believing that the riskiest most overvalued group of stocks on the planet are a safe-haven from the unwinding of an unprecedented, massive credit bubble.
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