"When logic and proportion have fallen sloppy dead"

"When logic and proportion have fallen sloppy dead"
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the black bird has landed  

Posted by howard in nyc

we now have our black swan.

massive earthquake, tsunami, nuclear power station disaster with radiation release. the third largest economy in the world is officially paralyzed. and it will take at least weeks to get moving back towards normal, if not months.

i think that qualifies as a taleb-esque black swan.

this will not cause nearly so much damage to the economies of china, the usa, and the oil producing states (japan is the 3rd largest importer of oil), as it will reveal the true condition of things.

this is less the straw that broke the back, than it is the revelation that the emperor indeed is nekkid. as is his entire entourage.

in any event, equities gonna get hammered next week, despite fed printing another $35 billion. commodities too. except oil (i have no fucking clue) and gold (up with flight to safety, i think, but i'm not betting on that one either). currencies, sovereign debt, fun and games. corporate debt, down. muni debt, down. insurance companies--are you fucking kidding me? heard today aflac has 1/4 of the japanese market for whatever they sell. that'll leave a mark.

those are my wild-assed guesses. here is what i fully expect.

japan holds a lot of us treasury debt. at the same time, their bonds have been held at record low interest rates for 20 years; their currency, despite all their efforts to devalue, has stayed real strong. how these factors will play out together, i am not smart enough to know. i'll be lucky if i can watch and understand as things unfold.

lots of turmoil is gonna be unleashed on the markets in a hurry. but like i've been saying, this was expected and inevitable. just needed a trigger. and we got it.


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