A lot to worry about

Posted by Jack Crooks - Black Swan Capital

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“Do not worry if you have built your castles in the air. They are where they should be. Now put the foundations under them.” – Henry David Thoreau

FX Trading – A lot to worry about

The stock market of late seems to be noticing them.  But commentators seem to be looking right past them—systemic risks.  Why do I say that?  Well, it seems every time I flip on the TV to a financial show, one mutual fund manager after another is trotted out to tell me this is a great buying opportunity. They do it with such confidence. They are dressed so well.  They are usually fairly good looking, trim and fit—not dumpy and ruffled like me.  All part of the sales package is my conclusion.  

Granted, I think a lot of these managers do actually believe what they say.  But they really do lack perspective.  I would prefer if they said something like this: 

“It may be a good buying opportunity if this is a correction, but the reality is that we human beings never really know if a correction is a correction or a major change in trend.  I don’t care how good you say your technical indicators are—you never know until the gift of hindsight is handed to you.” 

So Mr. Fund manager, a little more humility might be in order given what we do know as potential systemic risks lingering out there; they aren’t insignificant:

1. The potential demise of the Europe monetary union
2. China deceleration in growth linked with credit bubble woes
3. War between North and South Korea
4. War between Israel and Iran
5. US job market deterioration
6. Civil war in Thailand
7. Eurozone demand falls off the cliff on austerity measures
8. The US consumer goes back into his shell scared by stock market
9. Global deflation becomes the new norm; corporate pricing power tanks

…..read pages 2-4 HERE