Trouble's Coming

And its not going to be long. Brasil lowered interest rates by 50bps unexpectedly last night due to unexpected deterioration of data. As Gomer Pyle used to say… Suuprize suuprize suuprize….

Then of course our fudged jobless numbers will come out this morning…Market Consensus Before Announcement

Initial jobless claims in the August 20 week 5,000 to a seasonally adjusted 417,000 but were skewed higher by a labor strike at telecom provider Verizon that has since ended. The Labor Department says there were at least 8,500 claims related to the strike in the week and at least 12,500 in the prior week (these levels are before adjustment). The four-week average ended its seven-week run of declines, rising 4,000 to a 407,500 level that shows a 7,000 improvement from the month-ago comparison.

Here is the anticipated response…….so what? Reality is….its done for and WE KNOW IT! SO……WGARF (you fill it in)

We’re in a bad spot with a ramped market elevated to a sugar high from the candyman Dr. Bernanke….thats triggered riots and political upheaval globally due to his exported inflation and now he’s entered the danger period. What’s the danger period? He knows very well that the “extend and pretend” to “work out” the excesses so that a deflationary washout can be avoided is hanging by a thread. He knows that realistically he gets one more shot at immortality. He misses this next “bazooka move” and the “danger” will erupt.

This is the part that doomers get giddy about. War, pestilence, global starvation….end-o-days stuff. The kind of scenario that Celente drones on about.

Nearer term we get a choke and puke with a readjustment of the markets so that we can at the very least retest the lows or whatever it takes to bring in some cash sitting on the sidelines to give us our next market move. Maybe we get the announcement at the next Fed meeting in a couple of weeks….but I’m not convinced that we’ll get the low then. Without a real market beatdown before the meeting then the meeting may turn out to be a sell the news event. It doesn’t really matter now…the market is going to tell you. Keep a heavy cash position until the market cracks. Trade around your core and remain CAUTIOUS.

Read more at Great Depression 2