Q315 GDP, Black Tuesday & The Squeeze

Over at a financial forum...

Q3 GDP and Black Tuesday

We Nattered: 1.5% Q3 GDP estimate, IMHO Atlanta is closer at 0.9%, either way, its really negative, but that means more pump for the market.  SP500 2115 is getting closer by the day. just more "good" news to pump that market.


Black Tuesday 76 years old today? Are we sure that the Gregorian calendar's 0.002% length of year correction to the Julian calendar isn't effecting the date?  This would mean a reduction of 10 minutes 48 seconds per year which over 76 years = 13.27 hours.  Not counting today (Thursday Oct 29th) , with 6.5 trading hours per day, adding back those lost hours would put us, early next, oh dear, next Tuesday morning??? OMG!!! Invoke Gibbs Rule 39A… there are no coincidences.

The Dollar Squeeze

10/14 – 10/28 the dollar made a +4.3% move. Right now, it's taking a breather before it attempts to revisit its 52 week high at 100 and then runs through commodities and foreign dollar debt, including central bank forward dollar swaps, like a raped ape. The dollar squeeze is a three headed self reinforcing monster: 

1. Too many central banks are having to print local currency to pay the forward dollar swap piper they have all been dancing with.  

2. Concomitant economic contraction continues = less petrodollars = less eurodollars =  higher dollar = lower oil, wash, rinse, spin, repeat.  

3. Q4 seasonal slowdown in monetary flows in just starting to kick in, and this year its amplified by extreme contraction over the last six months. 

Like I said, mid December that "event horizon" is going to be humming loud. The trade weighted dollar index will continue to rise;  DXY should break 100 and establish new highs for 2015.  Negative Q415 or Q116 GDP is almost certain; a commodities flash crash is possible; oil prices should resume their downward trajectory; March 2016 could be a bottom for commodities; lowered EPS, increased P/E ratios; lower stock valuations.