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The market has been selling off pretty sharply lately, and though you never know the real “reasons,” in a note put out last night, JPMorgan’s Adam Crisafulli did a good job of just summing up some of the thinking that’s been making people nervous lately. Just read it as a nice refresher of conventional talking points:In terms of “reasons” for the weakness, it really is a continuation of many of the same themes: 1) US growth worries (although there hasn’t been any data out today to confirm/refute the Fri jobs), 2) a message of “no more” from central banks (Fed’s Kocherlakota was on the tape Tues afternoon talking about how the Fed may have to start hiking rates as early as 2012), 3) Europe debt issues flaring again (Spanish, and to a lesser extent Italian, yields obviously are an ongoing headwind – see below for more), and 4) the US “fiscal cliff” (w/Romney increasingly cementing his status as the front-runner, there has been a lot more focus on the “fiscal cliff” coming up on 1/1/13; things like the “Buffett Tax”, something Obama spoke about Tues afternoon, and the Bush rates, are all now being talked about more than they were just a few weeks ago). In addition on Tues, people were a little disappointed that Ed DeMarco at the FHFA didn’t push harder for principal cuts during a speech this morning (more on this below).
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