US existing home sales cliff diving and other links

This is what is helping drive markets down. But, the price action was ugly even before. The Yen is at a 15-year high versus the USD and a 7-year high versus EUR. Swissy is also crushing. Bunds are at record lows. And now the ten-year is at 2.48%. Clearly, something bad is happening here. What, I don’t know. But risk aversion is extreme. Anyone know what gives? One reader says “its the jobs market and the fact that valuations are too high. Consumers are not spending on back to school either. ” That’s true for the U.S. but that doesn’t explain European and Asian price action. There is serious de-risking right now. And don’t tell me it’s all because everyone’s caught double dip fever.

The Usual Fare

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  1. Tom Hickey says

    At the popular level, it’s probably the growing realization that the people in charge don’t have a clue and are just looking out for themselves and their cronies. As a result everyone else is either hunkering down or heading for the hills, and stockpiling food and ammo. Retail investors are pulling back toward safety

    At the sophisticated the level, it’s probably awareness of Minsky’s financial instability hypothesis and the realization that the world is in the unwinding of Ponzi finance, coupled with awareness of Irving Fisher’s debt deflation theory of depression. The foundation of the house of cards built on the sands of debt is shaking. Sophisticated money seems to be betting that the foundation is set to crack, with the world either experiencing a long bout of disinflation, if not slipping into actual deflation due to some shock, like a massive default (think Creditanstalt) that tips the boat. Batten the hatches.

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