Mornings like this call for words from market veterans.
Here’s Art Cashin on the wild night, and what’s happening in the market right now.
Beware The Ides Of March – Yet Again – Overnight, the world’s markets could strongly empathise with Caesar’s March 15th some 2055 years ago. Tokyo got pummelled in record volume. The selling was intense and spread across Asian markets, into Europe and, at dawn they were weighing heavily on U.S. futures. And, it was not just stocks that got decimated. Selling was heavy in almost all asset classes with the possible exception of the U.S. dollar and U.S. treasuries.
At around 6:00 a.m. EDT, I sent the following email to some media friends:
The selling is so broad and across so many asset classes it smacks of a massive scramble for liquidity. When you can’t sell what you want, you sell whatever you can – even your grandmother’s necklace.
If this were late 2008/early 2009, there would be rumours of one, or several hedge funds being liquidated. Rather, I think the absolute vagueness of data trickling out of Japan (e.g. casualties – 1M or 15M) and Bahrain have a scramble for cash accelerating. If oil were to spike on Mid-East crisis, the PIIGS could collapse on higher costs. The whole game seems to be on the table suddenly. A lot more than just nuclear.
To me, the key problem is the absolute vagueness and uncertainty in the information coming out of Japan. Even the Prime Minister’s comments seemed to disrupt rather than calm the markets. Markets hate uncertainty but never more so than in an apparent crisis.
The image of the world’s third largest economy grappling with rolling blackouts (closing factories) and the above-noted shortages is disrupting all markets. We need details – even if they are drastic.
Finally, while I certainly am no nuclear expert, the Japanese nuclear events are not Chernobyl. Let’s got some facts. Does Rudy Giuliani speak Japanese?
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