You’ve likely heard the term “black swan” before….and I’m not talking about the bird.
The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.
With all the “bad news” flying about these days, in such dark contrast to the background of eternally higher stock prices, and the never-ending “sunshine” of Central Bank intervention, it may just be time to consider getting out that cammo, shining up those shotguns, and heading out to the fields to do some hunting.
After all…..you can’t honestly expect some kind of “orderly exit” when things finally do start coming down to Earth do you? Do you?
Black swan hunting anyone?
Here’s a couple of things to keep in your sights:
1. The developing story in The Ukraine.
Once again The United States is sticking its nose where it most certainly does not belong, and is again butting up against Russia and our ol friend Putin with respect to this “tug of war” over The Ukraine. The U.S is hell-bent on having the Ukraine “come over” and join the E.U with aims to set up military / larger positions along the Russian border.
You don’t honestly think its humanitarian interests again driving the U.S do you? Do you?
Please. This scenario may not be on your radar “yet” but trust me……it’s should be.
2. China Carry Trade
China is now making some waves in the currency world and appears to be purposely pushing the yuan down in value to give its exports a bit of a lift amid the nation’s decelerating growth.
Sound familiar? So in other words….the Chinese are now doing exactly what the U.S has been doing for a full 5 years, and the media continues to label the Chinese as currency manipulators?? Hilarious.
The effect of a “falling yuan” has the potential to do “sizeable damage” to the CNY carry trade now approaching levels comparable to that of JPY so….a reversal of this trade would have monster global effects, with “unwind” being nothing short of disastrous.
China is “stirring the pot” now in the currency world and in my view is edging closer and closer to having the Yuan recognized as an “international currency”.
Watch for more signs of a “falling yuan” and the impact on global markets.
3. The E.U Zone
As you can get bored out of your mind listening to the day-to-day data out of any number of European countries, there is really only one thing you need to keep in mind.
The E.U Zone is so screwed, so banged up and so “far beyond” any realistic expectation of recovery that it could seriously be “any day of the week” where news has it that well……lets put it this way – Spain’s unemployment rate is around 25% so…..you let me know when you hear that puzzle has been solved. Gimme a break.
So with all these potential “black swans” flopping about don’t get caught snoozing there in your blind. You could wind up having a very, very..VERY bad day.
Oh ya…and the U.S unemployment print added another 348,000 to the line up last week so…….sounds like some real improvement there. Not.