Stocks | timiacono.com - Part 2

Ray Dalio on Downside Risks

Ray Dalio, head of Bridgewater Associates and their $155+ billion in assets under management, shares a few thoughts in Davos about the state of the global financial system and the Federal Reserve’s next move.

To wit:

…the risks are asymmetric on the downside, because asset prices are comparatively high at the same time there’s not an ability to ease. That asymmetric risk exists all around the world. So every country in the world needs an easier monetary policy … I think the next major move in Fed policy will be toward quantitative easing, not toward a tightening.

Might Now Be a Good Time to Panic?

It looks like it’s going to be another miserable day for the stock market due to – Surprise! – tumbling oil prices, China concerns, and mounting evidence that U.S. earnings season is going to be quite disappointing.

From the Gary Varvel collection at TownHall – alternatively…

Also on the bright side, Blackstone chief Stephen Schwarzman thinks this is just a correction and Ken Rogoff says it’s time to consider negative interest rates here in the U.S.

Why China Matters

After the worst start to a new year on record for stocks, news this morning that China’s exports were not nearly as bad as many feared sent stock markets surging higher for reasons that should be clear in the Voronoi diagram below from HowMuch.net.

The Rise (and Fall?) of the Chinese Economy

Tyler Cowen of Marginal Revolution fame (a blog that has been around a very long time by one of the few TMTGM-approved economists in the world) takes a look at how the current China came to be and what recent troubles in the Middle Kingdom portend for the future.

The period ahead will surely test China’s “command and control” economy and financial system. So far, they seem to have mucked things up a bit by stoking the 2014-2015 stock market bubble and then ham-handedly propping it up, but, they’re learning.

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China Circuit Breakers in Action

It’s been a pretty rough opening week for financial markets in 2016 with China’s stock market circuit breakers functioning something like this:

At the 3:25 mark comes the portion of the video best representing China’s shortest trading session in history that occurred yesterday.

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