Mr. Market Melting Down

Thursday, May 20, 2010, 7:58 AM
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Here we are, about an hour from the market open in the US, and European markets are down hard, while US stock futures point to a miserable open.

I'm opening this thread to follow the day's activities.

As I write this, S&P futures are down -23.50 and Dow futures are down -156.

Gold is down a further -$15 to $1179/oz, and oil is down a full -$2.17 to $67.70.

Sometimes, history rhymes, and sometimes it does more than that.  This is almost exactly a repeat of what happened in Fall 2008, right down to the last detail, including a widening TED spread.  I warned of this recently in the currency swap thread, and I am feeling confirmed that there is a generalized loss of liquidity somewhere, probably in the European banking system.

Something is broken.  We don't yet know what, but it doesn't really matter what it is.  We are in the midst of another credit crisis.  You'd better buckle up.


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